The European Commission has formally launched an investigation, reports Bloomberg, to determine whether Apple and e-book publishers are engaging in price-fixing and other anti-competitive practices.
From Bloomberg:
PricewaterhouseCoopers said in a January report that European e-book sales have been sluggish, partly due to the small range of non-English titles and fixed price agreements between publishers and stores in 13 countries. EU Competition Commissioner Joaquin Almunia said last month that he wanted to fight “artificial restrictions imposed by some companies to cross-border trade” and was examining the way e-books are distributed.
Today’s probe “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,” the Brussels-based authority said.
Through the iBookstore, Apple formed agreements with five out of six major publishing houses to adopt a so-called “agency model,” where publishers keep control over sales prices, and retailers receive a fixed percentage-based cut (in this case, 30%).
This is a marked change from the previous model, in which e-Books and hard copy titles alike were sold to retailers at a set price, leaving retailers to determine pricing at the storefront level. Since Apple adopted the model, other online retailers, most notably Amazon.com, have followed suit.
For more information, check out the European Commission’s full press release on the matter at Europa.
