Has Amazon Tamed the Apple Beast?
An antitrust case against Apple (NASDAQ:AAPL) and four book publishers came to an official close in Europe last week after regulators accepted a settlement offer from the companies, effectively giving Amazon (NASDAQ:AMZN) the winner’s bragging rights.
What Does the Settlement Entail?
Apple and the publishers — Simon & Schuster (NYSE:CBS), HarperCollins (NASDAQ:NWSA), Hachette, and Macmillan — have offered to let retailers set prices of all e-books for the next two years. They have also decided to suspend all “most-favored nation” contracts, which Apple often insisted on, for five years.
Our 20-page proprietary analysis of Apple’s stock is ready. Click here to get your Cheat Sheet report now.
The European Commission said that the settlement offer had eased worries of competition getting stifled by aggressive pricing. “The commitments proposed by Apple and the four publishers will restore normal competitive conditions in this new and fast-moving market, to the benefit of the buyers and readers of e-books,” EU Competition Commissioner Joaquin Almunia said in a statement, according to Reuters.
What’s the Impact?
The decision pretty much gives Amazon victory, as the online retailer will now be able to sell cheaper e-books. It had faced a conflict when Apple started entering into favored contracts with publishers once the iPad was first launched in 2010. Another publisher, Penguin (NYSE:PSO), is still in talks with regulators on possible commitments that “would allow an early closure of proceedings,” the Commission said.
The U.S. Department of Justice has initiated a similar probe against Apple and the publishers and announced in August that it had reached a $69 million settlement deal with some of the book companies. Apple is still fighting the U.S. case.
Don’t Miss: Apple Alarm: New Google Maps is Here!