EU Regulators Offer Apple and Publishers a Deal
European regulators have announced their willingness to settle with e-book publishers accused of violating antitrust laws if they offer concessions to resolve competition concerns. Five e-book publishers have been accused of price-fixing in collusion with Apple (NASDAQ:AAPL), blocking rivals like Amazon (NASDAQ:AMZN) and hurting consumers, who have been forced to accept higher prices on electronic books.
Lagardere’s Hachette Livre unit, News Corp.’s (NASDAQ:NWSA) Harper Collins, CBS Corp.’s (NYSE:CBS) Simon & Schuster, Pearson’s (NYSE:PSO) Penguin, and Macmillan, which is owned by Verlagsgruppe Georg von Holzbrinck, have been under investigation by the European Commission since last December. The five publishers, as well as Apple, have also been the center of an investigation by antitrust authorities in the United States.
“This possibility of a settlement is only open in the case the publishers will be ready to remove all our objections,” European Commissioner for Competition Joaquin Almunia told reporters on Monday, adding that European regulators were co-ordinating with their U.S. counterparts.
In the European Union, companies could offer concessions to avert a fine of up to 10 percent of their global sales. The companies would then avoid having to admit to any wrongdoing, and regulators would drop their investigation. U.S. regulators warned Apple and the five publishers that it plans to sue them, Reuters reported last week. Several of the companies are reportedly holding talks to settle the case.
Apple’s agency model, which it encouraged the publishers to adopt in 2010, has them setting the retail prices of books rather than allowing retailers to pay for the product and charge what they like, as was the case under the former wholesale model. The model is considered anti-competitive, as it prevents companies like Amazon from undercutting their competitors on pricing.
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