Apple, e-book publishers in EU crosshairs over e-book sales

The European Union's executive arm is investigating a host of e-book publishers and Apple for possibly engaging in "anti-competitive practices" related to e-book sales.

Don Reisinger
CNET contributor Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.
Don Reisinger
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Apple is under fire over its iBooks.

Apple is under fire over its iBooks.


Apple has once again found itself in the middle of a major e-book pricing complaint.

The iBooks provider and five publishers, including Harper Collins, Simon & Schuster, and Penguin, have been cited in an investigation by the European Commission over concerns that the companies "engaged in anti-competitive practices affecting the sales of e-books in the European Economic Area." (Disclosure: Both Simon & Schuster and CNET News are owned by CBS.)

The Commission, which is the European Union's executive arm, "will in particular investigate whether these publishing groups and Apple have engaged in illegal agreements or practices that would have the object or the effect of restricting competition in the EU or in the EEA," the organization said today in a statement. "The Commission is also examining the character and terms of the agency agreements entered into by the above named five publishers and retailers for the sale of e-books."

This isn't the first time the companies have caught flak over e-books. In August, a lawsuit was filed against Apple and the e-book publishers, accusing the companies of engaging in an "agency model" pricing system whereby publishers set the prices customers must pay. It stands in contrast to the traditional model, in which publishers set a retail price and retailers offer a sales price. The plaintiffs argued that the move is designed to hurt Amazon, and thus, limit competition in the marketplace.

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"Fortunately for the publishers, they had a co-conspirator as terrified as they were over Amazon's popularity and pricing structure, and that was Apple," Steve Berman, an attorney for the firm representing the plaintiffs, said in a statement at the time. "We intend to prove that Apple needed a way to neutralize Amazon's Kindle before its popularity could challenge the upcoming introduction of the iPad, a device Apple intended to compete as an e-reader."

That lawsuit came nearly a year after Richard Blumenthal, who was Connecticut's attorney general at the time, launched an investigation into both Amazon and Apple, alleging that the deals the companies struck with publishers might be anticompetitive.

"These agreements among publishers, Amazon, and Apple appear to have already resulted in uniform prices for many of the most popular e-books--potentially depriving consumers of competitive prices," Blumenthal said in statement.

Blumenthal is no longer Connecticut attorney general. Since his departure, the investigation into Apple and Amazon has apparently been pushed aside.

For its part, the European Commission has been quite active already in investigating the e-book business. The organization in March "carried out unannounced inspections" at several e-book publisher sites, but did not reveal any details on the information it collected. The Commission has also worked with the U.K. Office of Fair Trading on the matter and will continue to do so in the coming weeks and months.

Apple did not immediately respond to CNET's request for comment on the European Commission's investigation.