Apple, ebook publishers look to settle EU antitrust dispute

Apple and four major ebook publishers have offered retailers such as Amazon.com the option to set their own prices for ebooks for the next two years in a bid to end an antitrust investigation in the European Union.

The European Commission launched the investigation into allegations of cartel price-fixing by Harper Collins, Hachette Livre, Simon & Schuster, Penguin, Macmillan and Apple last December.

The publishers are accused of colluding with Apple to fix the price of ebooks, forcing up prices for consumers and attempting to squeeze rivals such as Amazon out of the market. The case hinges on so-called “agency pricing”, which allows more control by publishers over retail prices, in particular an unusual “most favored nation” (MFN) clause.

Apple, Harper Collins, Hachette Livre, Simon & Schuster and Macmillan have all offered to terminate existing agency agreements and refrain from adopting price MFN clauses for five years. Penguin has not offered any commitments and an investigation into its conduct is ongoing.

In addition, retailers would be free to set the retail price of ebooks, offering whatever discounts or promotions they wish, for a two-year period, so long as the total value of discounts does not exceed the total annual amount of commission that the retailer receives from the publisher, reported the E.U.’s Official Journal on Wednesday.

This could mean lower prices for consumers thanks to increased competition.

However the Commission is asking competitors, retailers and customers to give their opinion on the proposed remedies. Because the companies offered these solutions themselves, the Commission can then make them legally binding under the E.U.’s Antitrust Regulation, without having to conclude that an infringement of E.U. antitrust rules definitely took place. If a company then breaks its commitments, the Commission can impose a fine of up to 10 percent of its annual worldwide turnover.

Interested parties have a month to provide feedback on the proposals.

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