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EC confirms Apple settlement over e-books price fixing charge

13 Dec 2012
Apple iBooks screenshot

The European Commission (EC) has accepted a settlement proposed by Apple and four other book publishers, which will see the EC drop the threat of antitrust action over their e-book pricing practices.

Under the settlement, the publishers will abandon the 'most-favoured customer' pact with Apple. Under that agreement, if publishers sold an e-book at a lower price than it was listed on Apple's iBookstore, they had to offer the title to Apple at the lower price.

“This clause may seem benign at first sight. But it effectively made it very costly for publishers to allow other retailers to sell at lower prices than Apple since that low price would then have to be extended to Apple's store,” said Joaquin Almunia, EC vice president.

The publishers concerned are Hachette Livre, Harper Collins, Simon & Schuster and Macmillan. The EC is still in discussions with Pearsons over a possible settlement.

Although the settlement had been expected, it will come as a boost to online retailer Amazon. 

Amazon, thanks to its long history of selling books online and through the introduction of its Kindle e-readers, quickly established itself as the dominant force in e-books.

Under the latest settlement, the publishers will find their ability to set the prices of their e-books all but wiped out. They have also agreed not to enter into any 'most-favoured customer' pacts again for the next five years.

Concerns over e-book price fixing are not restricted to Europe. The US Department of Justice accused Apple and five other publishers of conspiring to fix prices earlier this year, while Australian regulators have also been investigating.

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