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  (Source: businessweek.com)
The European Commission is expected to accept an offer from Apple and four major book publishers in the ongoing e-books investigation

This year (and last) has been littered with Apple-related lawsuits with several tech companies, but it looks like Amazon will come out on top in the EU e-book probe.

According to Reuters, the European Commission is expected to accept an offer from Apple and four major book publishers in the ongoing e-books investigation. The offer was to allow Amazon and other e-tailers to sell e-books at a discount for two years, and to temporarily suspend the "most-favored nation" contract for five years. The latter means that the four book publishers involved cannot allow Apple's rival retailers sell the same books at a lower price.

Last December, Apple and book publishers
Penguin, Harper Collins (News Corp., USA), Simon & Schuster (CBS Corp., USA), Hachette Livre (Lagardère Publishing France) and Verlagsgruppe Georg von Holzbrinck (owner of inter alia Macmillan, Germany) were under the microscope when the EU found out about their selling practices. The EU saw this as anti-competitive against the likes of Amazon, and launched an investigation.

Back in August of this year, Apple and four of the publishers (all but Penguin)
submitted the proposal to the EU that the publishers will not restrict or limit an e-book sellers' ability to set, change or reduce e-book prices for two years. They also won't interfere with an e-book retailer's choice to offer discounts, and added the five-year suspension of the "most-favored nation" contract.

While the investigation is technically still ongoing, rumor has it that the EU will accept the offer, which will be a nice win for Amazon. This means Amazon will be able to sell books at more competitive prices than Apple once again.


After the EU launched its investigation in December 2011, the U.S. Department of Justice sued Apple and the same five book publishers involved in the EU case over anticompetitive practices concerning e-book sales in April of this year. More specifically, The book publishers were accused of partaking in an agency sales model with Apple, which meant that publishers were allowed to set the price of a book and Apple would take a 30 percent cut. In addition, the publishers could not let rivals sell the same book at a lower price.

Recently, Harper Collins, Simon & Schuster and Hachette Livre decided to settle the case with the U.S. DOJ. However, Apple, Penguin and Macmillan have decided to fight the antitrust case.

The U.S. bench trial in the Apple e-book case will start June 3, 2012.

Source: Reuters



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RE: What is the point?
By GotThumbs on 12/13/2012 1:30:07 PM , Rating: 0
Exactly!

This is an example of kicking the can down the road. What the EU needs to do is pick up the can and toss it in the trash.

Simply delaying Apple and the publishers time to control prices out to 5 years down the road is not an acceptable solution. Unless the world ends in 5 years, this is just a delay in re-visiting the same ethical problem. Apple needs to be told No now and forever regarding their anti-competitive practices.

Microsoft has been beaten and abused regarding a simple integrated web-browser, but never did MS prevent users from installing and using other web-browsers. Why does Apple still get away with its' current restrictions/practices. I want someone to file a lawsuit against Apple for the required use of ITunes for IProduct content. I'll never own an IProduct, but I think Apple needs to allow owners the option to shop from other markets. Android gives you the power to do this, so why can't Apple. They could, but why would they when they continue to have blind followers giving away their money freely and foolishly.

Best wishes for the coming year,


RE: What is the point?
By Shadowself on 12/13/12, Rating: -1
RE: What is the point?
By sprockkets on 12/13/2012 2:50:45 PM , Rating: 2
quote:
The publishers, not Apple, had 100% control over pricing and availability. How is any of that anti-competitive on Apple's side?


By agreeing to go along with it knowing it would hurt amazon.


RE: What is the point?
By inighthawki on 12/13/2012 4:13:18 PM , Rating: 2
Unfortunately there isno law that says "You must only conduct business practices that benefit all of your competition as well."


RE: What is the point?
By Cheesew1z69 on 12/13/2012 4:30:02 PM , Rating: 2
And yet, MS got hit like a red headed step child for it. For putting a BROWSER in THEIR OS and killing off Netscape.


RE: What is the point?
By Trisped on 12/13/2012 6:51:03 PM , Rating: 4
quote:
Unfortunately there isno law that says "You must only conduct business practices that benefit all of your competition as well."
But there are laws which indicate prevent using market dominance to prevent fair competition. Apple had how many millions of iPhone and iPad users who were all eagerly waiting for Apple's eBook store because it was the only way (besides reading them off websites) to get books for their device?


RE: What is the point?
By maugrimtr on 12/17/2012 10:17:44 AM , Rating: 2
Apple created a system whereby publishers could not charge less for an ebook at any of Apple's competitors thus ensuring Apple always had the lowest possible price per product. This eliminated any price competition between Apple and Amazon. That elimination of competition was, since it was due to a collusion between publishers and Apple, illegal.

It also had the effects that anyone with basic economics could predict - the publishers increased prices relative to paperbacks (to "preserve value", i.e. cover Apple's 30% fee) and the publishers could now dictate terms to Amazon under the guise of having a binding legal contract with Apple that required they control prices.

Frankly, the idea of the EU accepting a deal that makes price collusion okay after five years is obviously false. The EU has stricter anti-competitive rules than most jurisdictions, and since it operates over the markets of so many independent sovereign states, it's very willing to take a harsh approach, impose fines and monitor offenders for years afterward. Who in their right minds actually thinks the EU will go soft? Apple aren't in court anymore - they broke the law, everyone knows it, and the EU will not commit political suicide by playing nice and giving them a free pass to repeat offend in 5 years. They're going to all be fined.


RE: What is the point?
By Trisped on 12/18/2012 5:53:13 PM , Rating: 2
quote:
Apple created a system whereby publishers could not charge less for an ebook at any of Apple's competitors thus ensuring Apple always had the lowest possible price per product. This eliminated any price competition between Apple and Amazon. That elimination of competition was, since it was due to a collusion between publishers and Apple, illegal.
Maybe it is illegal in the EU, but in the USA it is not. Many companies have deals with ALL their re-sellers that there product cannot be sold for anything other then MSRP. This way they protect their product's image and value, but all re-sellers are free to compete on equal grounds (since no one gets preferential treatment). This has been reported on several times.

The problem is not that Apple made a deal with the publishers, Amazon also made deals with the publishers, probably with similar terms. The problem was that Apple would not allow the publishers to set the price lower then a certain point, forcing either the publisher to make much less money, or to raise the price.


RE: What is the point?
By drycrust3 on 12/13/2012 3:16:53 PM , Rating: 2
quote:
Apple was not being anti-competitive. Apple didn't set prices. Apple didn't dictate what the items could be sold, or sold for, at other venues. Apple didn't control any of it.

quote:
Back in August of this year, Apple and four of the publishers (all but Penguin) submitted the proposal to the EU that the publishers will not restrict or limit an e-book sellers' ability to set, change or reduce e-book prices for two years. They also won't interfere with an e-book retailer's choice to offer discounts, and added the five-year suspension of the "most-favored nation" contract.

What this is saying is that Apple and Co will be allowed to price fix from 2014.


RE: What is the point?
By ShieTar on 12/14/2012 5:06:24 AM , Rating: 2
No, it is saying that the EU wants to see what happens in this 2 years before making a final decision on the subject. This is a completely normal approach if any new technology or new market concepts are involved. The judges are merely trying to not arrogantly pretend they fully understand this new market, and thus they only make a limited time ruling for now.


RE: What is the point?
By Trisped on 12/13/2012 6:46:45 PM , Rating: 3
quote:
Apple didn't set prices. Apple didn't dictate what the items could be sold, or sold for, at other venues. Apple didn't control any of it.
Apple made the interface which dictated which prices were available. Noticeably absent from the initial interface were the price points 90% of Amazon's paid (non-free) eBooks sold for: 7.99, 8.99, and $9.99 as well as numerous others.

It would not have been an issue if Apple had let the publishers set any price, including $9.51, $8.72, $11.01 as then the publisher could have match the lowest price at any other re-seller. It would not have been an issue if Apple had not required the publishers to not sell the book for less anywhere else as the publishers could have let the re-seller's sell the book at what ever price they wanted, then increase the cost of the book in Apple's store to the next closest amount Apple allowed.

But Apple did both of these things, and publishers wanted onto the popular iPad and iPhone, which resulted in an increase in the price of eBooks everywhere.

Personally I think the deal still has problems and should be either rejected or have additional constraints/penalties added on.


RE: What is the point?
By drycrust3 on 12/13/2012 3:03:15 PM , Rating: 2
quote:
Simply delaying Apple and the publishers time to control prices out to 5 years down the road is not an acceptable solution.

Totally agree! There is no way the EU would accept this sort of nonsense from any group of airlines or phone companies or any other seemingly unaffiliated group of manufacturers or retailers.
While it is true that Apple and Co can't be expected to know the laws of every country in the world, I don't think this sort of nonsense would be accepted in the USA (I'm not American), and if it isn't, then why would it be acceptable in Europe?


RE: What is the point?
By ShieTar on 12/14/2012 5:16:41 AM , Rating: 4
Actually, Apple and everybody else can very well be expected to know all the relevant laws of each country they do business within. If you are not willing to do this, you have to find somebody to act as a national distributor for you.

The 5 years are clearly expected by the judges to solve the problem all by itself. With 5 years of time, plenty of different methods of reading eBooks should have established even beyond Kindle and iPad, so the publisher could no longer afford to affront distributors other than Apple.


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