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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 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.


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