EUROPEAN readers should prepare for plunging ebook prices after the European Commission last week accepted commitments from Apple and four major publishers to stop restricting the sale of cheap ebooks.
The commission has been investigating publishers Hachette Livre, HarperCollins, Simon & Schuster and Macmillan, together with Apple, over ‘‘a suspected concerted practice aimed at raising retail prices for ebooks in the European Economic Area’’, in breach of European Union antitrust rules. It found that retailers such as Amazon were faced with ‘‘what we suspect was a concerted and co-ordinated demand’’ by the four publishers to agree to the so-called agency model, which allows publishers rather than retailers to set the prices of ebooks, and said that ‘‘the co-ordination of commercial behaviour between competitors – here, with the help of Apple – is forbidden by our competition rules’’.
‘‘Our strong suspicion is that this was part of a global strategy to restrict competition at retail level and achieve higher prices,’’ said Joaquin Almunia, vice-president of the commission responsible for competition policy. ‘‘Whatever the publishers’ initial concerns about retail prices, dealing with this situation through collusion is not acceptable. Our preliminary conclusion was therefore that this behaviour could possibly constitute an infringement.’’
To settle the case, Apple and the four publishers have committed to terminating agency agreements and, for two years, allowing ebook retailers to set their own prices for ebooks.
The commission is still engaged in ‘‘constructive discussions’’ with a fifth publisher – Penguin owner Pearson – said Mr Almunia.
‘‘The commitments proposed by Apple and the four publishers will restore normal competitive conditions in this market, to the benefit of buyers and readers of ebooks,’’ Mr Almunia said. ‘‘The alternative would probably have been to impose fines at the end of a long procedure. But this is not the best solution in the case of a nascent and fast-moving market.
‘‘Accepting these commitments means removing immediately the results of the collusion and restoring normal competitive conditions. This route is the quickest way to bring competition back to this market, to the benefit of all consumers.’’
HarperCollins said in a statement: ‘‘Our goal has always been to give consumers the widest choice at the fairest price while . . . ensuring that authors receive a fair reward for their endeavour. We will continue to pursue this goal while complying with today’s commission decision.’’
A spokesman for Penguin, which is set to merge with Random House, said: ‘‘Our position [is] that we have done nothing wrong. As a practical matter, we are settling in the interests of clearing the decks before the new company is established.’’