Dynamic Technology

Apple, publishers back off in EU e-book antitrust case

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Apple Inc & 4 major publishers have offered to let retailers such as Amazon.Com Inc sell e-books at a discount to settle an EU antitrust investigation into their pricing deals

BRUSSELS: Apple Inc and four major publishers have offered to let retailers such as Amazon.Com Inc sell e-books at a discount to settle an EU antitrust investigation into their pricing deals and avoid possible fines.

The case highlights the battle between retailers and publishers over pricing control as publishers look to e-books to boost revenues, cut costs and reach bigger audiences.

EU regulators have been investigating Apple's e-book pricing deals with Simon & Schuster, News Corp unit HarperCollins, French group Lagardere SCA's Hachette Livre, Verlagsgruppe Georg von Holtzbrinck, which owns Macmillan in Germany, and Pearson Plc's Penguin group.

Apple and the publishers, with the exception of Penguin, have offered to settle with the European Commission, which began its inquiry last December. The EU watchdog detailed the offer on Wednesday, confirming a Reuters report on Aug. 31.

"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," the Commission said in its Official Journal.

It said the publishers and Apple also proposed to suspend "most-favoured nation" contracts for five years. The clauses barred publishers from making deals with rival retailers to sell e-books at prices lower than those set by Apple.

The EU watchdog said third parties have a month to provide feedback on the proposals. If the response is positive, the Commission will end its investigation without an infringement finding.

Amazon, which makes the Kindle e-reader and had long sold e-books for as little as $9.99, declined to comment.

If the offer were to be accepted, it would mean the publishers getting off relatively lightly, said Mario Todino, a partner at Brussels-based law firm Gianni, Origoni, Grippo, Cappelli & Partners.

"The commitments are quite extensive and will more or less address the issues. However, the absence of a fine shows the Commission being quite lenient, as the alleged infringements could be considered hard-core," Todino said.