EU Commission Starts Anti-Trust Probe of Apple, 5 Other E-Book Publishers
European Union antitrust regulators are looking into allegations that Apple Inc. and five other e-book publishers have planned to fix the price of e-books in Europe.
The European Commission will investigate deals between tech giant Apple and publishing firms Harper Collins of News Corp., Simon & Schuster of CBS Corp., Pearson's PLC's Penguin, Verlagsgruppe Georg von Holzbrinck, and Harchette Livre owned by Lagardere Publishing.
The commission will see whether the deals between Apple and the publishers restricted competition and fixed the price of e-books at a high level in the European market.
"This is an important issue for consumers, for people like me and you who love to read books, including on an electronic platform," Amelia Torres, the commission's spokeswoman told a news briefing.
Apple and the publishers stuck deals in response to the prices set by Amazon for e-books. Previously booksellers like Amazon could set the prices for e-books after they bought them from publishers at wholesale prices. Amazon, one of the major players in the e-book market, set the prices for its Kindle e-books at $9.99. The low price was a way for Amazon to foster customer loyalty. Apple is particularly invested because Apple and Amazon are competing in a fast growing e-reader market.
Apple and the other publishers didn't want to give the Seattle-based retailer a majority share of the e-book market especially when Amazon was selling e-books at prices that many publishers considered to be too low.
The five publishers decided to enter agreements with each other so that they alone could decide e-book prices. Under the new model booksellers like Amazon and Apple won't be able to set prices for e-books but would instead receive 30% for each sale and returning 70% to the publisher.
Shortly after this new system was initiated, e-book prices began to rise. Amazon began selling e-books for more than $9.99. The European commission is looking into this price increase as an antitrust issue.
Verlagsgruppe Georg von Holtzbrinck, which owns publisher Macmillan, confirmed it is being investigated. A spokeswoman for HarperCollins said that the company is cooperating with the investigation. A Pearson spokesman said that the company is cooperating with the commission but that "does not believe it has breached any laws." The other companies declined to comment.