EU to market test e-book settlement proposed by publishers, Apple

The European Union's executive arm says that if the solutions are deemed suitable, they will be enacted and the companies will be off the hook.

Apple

The European Union's executive arm confirmed today that Apple and four e-book publishers have offered up a settlement deal on e-book price-setting that could be approved in the coming months.

According to the European Commission, Apple, Harper Collins, Hachette Livre, Macmillan, and Simon & Schuster (which is owned by CBS, the same company that publishes CNET) have agreed to terminate e-book agency pricing contracts and allow retailers to set their own prices on titles for a period of two years.

The proposed deal, which the EC did not offer an opinion on, will now be open to public comment, allowing any competitor or EU citizen to share their opinion. If the issues raised are deemed illegitimate or immaterial, the EC could press forward with adopting the deal and legally bind the companies to follow it.

Apple and major e-book publishers were hit by government lawsuits earlier this year over claims that the companies illegally colluded to inflate the prices of e-books and to hurt Amazon. Under the so-called agency model, the companies established a system whereby the publishers would establish e-book prices. Amazon, which was accustomed to establishing its own retail prices based on the wholesale cost of titles, was forced to raise its prices, according to the government agencies.

In the U.S., e-book publishers have been quick to ink settlements. Just last month, three publishers signed a $69 million settlement with U.S. attorneys general to prevent further litigation. Earlier this month, the publishers completed their settlement with the U.S. Department of Justice . So far, Apple has decided to fight the charges in the U.S.

Penguin, which was also included in the EU e-book price-fixing case, has not agreed to participate in any settlement, saying that it believes it did nothing wrong.

The biggest benefactor in the settlement could be Amazon. As noted, that company was forced to raise prices on e-books. With these latest settlements, prices can come down, making Amazon's offering more competitive in the e-book market.

If the EC decides to take the deal offered by the publishers and Apple, the organization reserves the right to impose a fine of up to 10 percent of their annual worldwide sales in the event of any infringement.

 

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