Apple ebook settlement with EU will allow Amazon to set prices

Apple and four other ebook publishers have settled an antitrust battle with the European Union.

After a year of investigations into allegations of cartel price-fixing, the European Commission has decided to accept commitments to alter ebook pricing practices from Harper Collins, Hachette Livre, Simon & Schuster, Penguin, Macmillan and Apple.

The Commission concluded that an infringement had very possibly taken place when the publishers together with Apple jointly switched to an agency sales model to set ebook prices.

Despite this, the competition watchdog decided not to impose fines, instead opting to accept promises from the companies that they will terminate the current agency agreements and, for a period of two years, will not hamper ebook retailers, such as Amazon, from setting their own prices for ebooks or from offering discounts and promotions.

The Commission made the decision in order to resolve the situation in what is a very fast-moving market. “This route is the quickest way to bring competition back to this market, to the benefit of all consumers who buy ebooks in Europe,” said the Commission statement.

Apple and the four publishers seemingly shared the goal of limiting retail-price competition, particularly with regard to Amazon, which was the uncontested leader in the retail market for ebooks at the time of the change, said the Commission. Under a wholesale model, the retailer is free to set the price, but with an agency model, the retail price of ebooks is determined by the publishers themselves.

A fifth publisher, Penguin is still under investigation, but the Commission said it was engaged in “constructive discussions” with the company.

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