Penguin Ends E-Book Deal with Apple in Hopes of Appeasing to EU Regulators
The roughly year and a half long e-book antitrust investigation, which involves Apple and a group of large publishers, seems to be nearing an end. Pearson’s Penguin unit has offered to end the deals it made with Apple over e-book prices in an effort to appease to the European Commission.
According to Reuters, Penguin has offered to end “most-favored nation,” which kept rival booksellers from selling e-books at a lower price point than Apple for five years. The agreement will also give retailers the option to set prices and discounts for two years, as is the case with other publishers who have settled with the Commission. As of right now, Penguin is the last publisher still negotiating with the Commission, as Apple and other accused publishers reached a settlement last December.
For those of you unfamiliar with the issue, in December of 2011, the Commission began looking into allegations of illegal agreements between Apple, Hachette Livre, Penguin, Harper Collins, Simon & Schuster, and Verlagsgruppe Georg von Holzbrinck. At first, the Cupertino California company was hesitant when it came to selling but the iBook seller eventually changed its mind. The ending of the “agency model” pricing though, which allows publishers to set a price for content and allow companies serving the content to take a cut of the sales, is likely to benefit Amazon the most, which prefers the “wholesale model.” In the wholesale model, publishers suggest a price and booksellers are free to set their own prices and offer their own discounts.
Fortunately none of the involved parties in the investigation have been named guilty of any wrongdoing and the Commission assessed no fines. Interested parties will have roughly one month to comment on Penguin’s proposal before the Commission reaches a decision.