Although the US Department of Justice (DOJ) charges of collusion and price fixing against Apple and five of the world’s biggest publishers have been in the headlines for months, the firms are also under investigation by European Union (EU) antitrust regulators. And this week, Apple and four publishers have offered to settle with the EU, by changing their behavior to stop breaking the law.
The EU investigation of Apple—and the publishers Simon & Schuster, HarperCollins, Hachette Livre, Macmillan (Germany), and Penguin—dates back to December 2011. All of the firms except Penguin have approached the EU to settle.
“For a period of two years, the four publishers will not restrict, limit, or impede e-book retailers' ability to set, alter, or reduce retail prices for e-books and/or to offer discounts or promotions," a European Commission (EC) document explains. HarperCollins confirmed that it was “working with the EU to find a solution” the price-fixing and collusion charges.
Under the terms of the proposed settlement, the four publishers will no longer collude to prevent Apple’s competitors in the ebook space—primarily Amazon, but also others—from setting their own prices. And Apple has proposed to end its existing “agency” agreements with publishers, which established the higher ebook prices that occurred as soon as Apple entered the market. Before Apple colluded with the publishers, new ebooks sold for an average of $9.99. Since then, the price of new ebooks has jumped to $12.99 or $14.99.
The EU’s investigation of Apple and various large publishers closely mirrors the legal action in the United States. In the US case, however, three publishers—Hachette, HarperCollins, and Simon & Schuster—have offered to settle while Apple and two other publishers, Macmillan and Penguin, have thus far declined. That settlement was approved by a federal judge early this month despite protests from Apple, and Amazon has already started lowering ebook prices as a result. US consumers will eventually receive financial restitution for the artificially overpriced ebooks they purchased during the offending period, according to the terms of the settlement.
With Apple attempting to settle the EU case, it’s perhaps likely that a similar offer will now be made to US antitrust regulators. Not that anyone is admitting guilt, of course.