Under investigation from the European Commission (EC) over reports that it had worked with major publishers to restrict e-book pricing, Apple and four publishers have offered to settle the case, offering retailers two years of unrestricted pricing on books they sell.
In a filing on the EC’s official website, the commission noted that while Apple and four major publishers do not agree with its original assessement, they were willing to offer commitments that would meet competition concerns and potentially end the investigation.
Apple and the four publishers (Simon & Schuster, HarperCollins, Hachette Livre and Verlagsgruppe Georg von Holtzbrinck) would terminate agency agreements over the sale of e-books, allowing other retailers to do the same. If retailers decided not to terminate their agreements, each of the four publishers would do so on its behalf as part of the deal.
Making e-book pricing much more competitive, Apple and the four publishers state that they would not “restrict, limit or impede e-book retailers’ ability to set, alter or reduce retail prices for e-books and/or to offer discounts or promotions.”
The note in full:
For a period of two years, the Four Publishers will not restrict, limit or impede e-book retailers’ ability to set, alter or reduce retail prices for e-books and/or to offer discounts or promotions.
However, as regards agency agreements, the aggregate value of the price discounts or promotions offered by any retailer should not exceed the aggregate amount equal to the total commissions the publisher pays to that retailer over a 12-month period in connection with the sale of its e-books to consumers.
This means that Amazon and other e-book retailers would be able to set their own prices on e-books without pressure or commitments from the publishers whose books they sell.
If agreed, the four publishers would also not be able to sign agreements with retailers that involved pricing commitments, with Apple unable to do the same. Any publisher Apple has a agreement with, it has to agree not to agree a clause on price, maximum retail price and agents commission.
The EC’s investigation began more than 9 months ago, looking into whether publishers worked with Apple to fix prices for their e-books. The deals ensured that retailers could take a cut of the profits – effectively squeezing smaller retailers and Apple, which operates its own iBookstore, was investigated over the pricing of titles made available to iOS device owners.
Such deals were seen as a way to control the prices set by e-book retailers including Amazon, which would be able to control its own pricing should the EC offer be accepted.
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