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Apple Offering Concessions in European Union E-Book Investigation

Apple Offering Concessions in European Union E-Book Investigation

A report today says Apple and several major publishers have agreed to offer concessions to put a close to the ongoing European Union antitrust investigation over alleged e-book price fixing.

MacRumors:

The concessions would significantly unravel the Apple-backed agency model of book pricing in which publishers set the retail prices for their content with distributors such as Apple and Amazon receiving a fixed percentage of the sales price.

Apple and four publishers have offered to allow retailers such as Amazon to sell e-books at a discount for two years, in an attempt to end the EU investigation and avoid any possible fines, said a source familiar with the matter.

The commission is now reported to be sounding out opinions from the industry as to whether the concessions are sufficient. before a formal market test, which could lead to the investigation being terminated.

The news of Apple’s offer to make concessions in Europe comes two days after a group of publishers agreed to a $69 million settlement in the U.S. over the same issue. The U.S. Department of Justice sued Apple and five publishers back in April. Three of the publishers decided to settle the case, while Apple and two other publishers elected to fight the charges.

Regulators claim that the shift to the agency model amounts to price collusion, sparking antitrust concerns. Apple says that the agency model has had the opposite effect, by weakening Amazon’s previously overwhelming position at the top of the market, which they say, was gained by using books as “loss-leaders”, selling the books at deep discounts to entice customers to visit the site and purchase other products.

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