Apple, Publishers Offer Concessions to Retailers to Avoid Antitrust Suit
According to Reuters
, Apple and four publishers have offered concessions to retailers as a way to avoid an antitrust suit from the European Union, allowing them to sell e-books at a discounted rate for two years. The details of the offer were shared by an unnamed source and disclosed to Reuters
today. Apple is said to have made the deal along with Simon & Schuster, HarperCollins, Hachette, and Macmillan.
If the details are true, they signal a change for Apple, which chose not to settle and resolve a similar investigation in the U.S. The U.S. Department of Justice filled an antitrust suit against Apple in April, accusing the iPad maker of price fixing and collusion with publishers such as Hachette, HarperCollins, Macmillan, and Penguin. Simon & Schuster, Hachette and HarperCollins decided to settle their cases with the Department of Justice to avoid the antitrust suit, while Apple did not. This leaves Apple reportedly hoping its concessions, along with the four publishing partners will ward off an antitrust investigation from the European Commission which previously announced its investigation in late 2011. Now, the Commission is said to be “sounding out opinions from the industry” to determine whether or not the concessions offered by Apple and others are sufficient.
For those of you who didn’t already know, Apple and five major book publishers have been accused of colluding to inflate e-book prices through Apple’s iBookstore, a move that allegedly helped take some market share away from the industry leader, Amazon. Book publishers opted to switch to the “agency model” upon the arrival of iBooks for the iPad, allowing publishers to set e-book prices as they see fit, barring distributors from pushing prices lower. Previously, e-books were sold by the market leader Amazon under the “wholesale model,” which allowed the online retailer to set their own prices. Amazon ended up continually selling content at a discounted rate to drum up business, a move which left publishers feeling bitter as the prices were too low and hurt other businesses that also sold books.