EC looking into Apple, major publisher e-book price fixing

Andre Yoskowitz
6 Dec 2011 14:58

The European Commission has launched its investigation into whether ebook publishers Lagardere, Pearson Plc, News Corp, CBS and MacMillan colluded with Apple to price-fix ebooks, making it more expensive for the end consumer.
Says the EC (via Reuters):

The Commission 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 European Union or in the European Economic Area.
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.

News Corp. owns Harper Collins, Lagardere owns Hachette, CBS owns Simon & Schuster and Pearson owns Penguin, meaning all the big boys of the publishing world are part of the investigation.
All the companies have said they are cooperating.
In 2010, with the launch of the iPad, publishers moved to the "agency model," where they are allowed to the set the price of the ebooks, and the revenue is then shared with the retailer. Before that, publishers would sell all their books for 50 percent of retail price on a wholesale basis. Retailers were then allowed to sell at any price they chose, cutting into their own margins if necessary.