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Penguin offers to settle Apple e-book price-fixing charges

19 Apr 2013
Apple iBooks 2

Book publisher Penguin has proposed scrapping its e-books deal with Apple, in an effort to avoid antitrust action by the European Commission.

According to the EC's competition regulators, Penguin, part of the Pearson media group, has also offered to put a five-year moratorium on entering so-called 'most favoured nation' (MFN) clauses.

Under the MFN clauses, publishers were able to dictate the prices they charged for e-books providing Apple got a 30 percent slice. The Commission said it believed such arrangements enabled publishers to fix prices for e-books, with Apple's collusion.

“The Commission has concerns that this switch may have been the result of collusion between competing publishers, with the help of Apple, and may have aimed at raising retail prices of e-books in the EEA [European Economic Area] or preventing the emergence of lower prices,” EC officials said in a statement.

Last December, Apple and other publishers caught up in the EC investigation, Simon & Schuster, Harper Collins, Hachette and Holtzbrinck made similar pledges, which the Commission agreed to.

Those involved could have been fined up to 10 percent of their global annual revenues for breaching Europe's competition rules.

Online retailer Amazon will emerge the clear winner here, as it already enjoys a significant presence in the European e-books market.

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