Apple, publishers, to settle EU ebooks probe

Regulators in the European Union are reportedly ready to accept the offer made by Apple and four book publishers, bringing an end to an antitrust probe regarding ebook pricing. Apple and these publishers made the offer back in September, and regulators are expected to announce their acceptance of the deal next month. The deal with European regulators addresses aspects of pricing and contracts that prevent lower pricing at rival retailers. Foo Yun Chee of Reuters reports:

The case underscores the battle between retailers and publishers over pricing control of e-books, which publishers hope will boost revenue and increase customers.

Apple and the publishers have offered to let retailers set their own prices or discounts for a period of two years, and also to suspend "most-favored nation" contracts for five years, the sources said.

Previously, publishers have sought to increase their control over ebook prices, trying to prevent retailers, like Amazon, from setting lower prices on ebooks. For a long time, Amazon ebooks usually sold at a maximum of $9.99, until publishers started demanding higher prices to increase profits. Apple’s issue in this is that it had these so-called “most-favored nation” contracts with publishers, preventing publishers from negotiating lower ebook prices with other retailers. The antitrust issue here is not one of monopoly, but of collusion. Specifically, did Apple and the book publishers conspire to break Amazon’s hold on ebook pricing? In Europe at least, the answer seems to be “Yes”. The US Department of Justice settled a similar case with publishers last month, which resulted in publishers agreeing to pay a certain amount of credit per ebook to Amazon customers who payed higher prices for books than they would have without publishers interference.

Source: Reuters