EU ends antitrust probe after Apple, publishers agree to let retailers set e-book prices

Posted:
in General Discussion edited January 2014
A European Union antitrust probe into Apple and major publishers was officially ended on Thursday, after regulators accepted a deal from those being investigated.

Apple and four major publishers have agreed to ease pricing restrictions on retailers, such as online e-book seller Amazon.com, for two years. As a result, the EU has ended its antitrust investigation, according to Reuters.

The biggest winner in the settlement is Amazon, which will be able to set prices for e-books as it sees fit. Previously, publishers decided to join with Apple and utilize the "agency model," which allowed the publishers to set their own prices on the iBookstore while Apple took a 30 percent cut of sales.

Publishers then chose to block Amazon and other retailers from selling e-books unless they too chose to adopt the agency model, rather than being able to set their own prices. Publishers felt Amazon's low-margin business model was unfairly forcing lower e-book prices, but regulators in the EU felt the moves violated European antitrust laws.

European Commission HQ


Last month, it was reported that the EU was expected to accept the e-book settlement proposed by Apple and the publishers. The deal allows Apple and others to avoid fines that could have reached as high as 10 percent of their global sales ? which, in Apple's case, would have been $15.6 billion for its 2012 fiscal year.

Apple is joined by Simon & Schuster, HarperCollins, Hachette, and Macmillan in the settlement with the European Commission. Not included in the agreement is Penguin, which remains under investigation, but has offered its own concessions.

The anticipated settlement is similar to the counterpart price-fixing case in the U.S. leveled by the Department of Justice in which HarperCollins, Simon & Schuster and Hachette recently settled for $69 million. Apple, Penguin Group and Macmillan continue to fight the allegations, with both companies asking for a court trial to decide the matter.

Comments

  • Reply 1 of 17
    hill60hill60 Posts: 6,990member


    Goodbye Barnes and Noble, they will probably be the first to fall as a result of this.

  • Reply 2 of 17
    john.bjohn.b Posts: 2,720member


    The publishers will look back on this day as the day they put agreed to put themselves out of business.

  • Reply 3 of 17
    solipsismxsolipsismx Posts: 19,566member
    EU supports the race to the bottom. That's a job [S]well[/S] done.
  • Reply 4 of 17
    dasanman69dasanman69 Posts: 12,980member
    john.b wrote: »
    The publishers will look back on this day as the day they put agreed to put themselves out of business.

    It's only for 2 years. They'll survive just fine. Amazon doesn't sell every ebook at a loss. The vast majority of ebooks cost more or less the same on Amazon, iBooks, Google Play, and B&N.
  • Reply 5 of 17


    Originally Posted by dasanman69 View Post

    It's only for 2 years. They'll survive just fine.


     


    Cue anecdotes about companies whose outlooks were fine but didn't exist two years later.

  • Reply 6 of 17
    john.bjohn.b Posts: 2,720member

    Quote:

    Originally Posted by dasanman69 View Post




    Quote:

    Originally Posted by John.B View Post



    The publishers will look back on this day as the day they put agreed to put themselves out of business.




    It's only for 2 years. They'll survive just fine. Amazon doesn't sell every ebook at a loss. The vast majority of ebooks cost more or less the same on Amazon, iBooks, Google Play, and B&N.


     


    Don't confuse their current strategy with their endgame.  Once they put the other publishers out of business, the vast majority of ebooks will be priced at whateverthehell Amazon decides they should cost.  And they'll pay the authors whateverthehell Amazon decides they should be paid.


     


    There sure are some dumbshits at the FTC as well as their EU counterparts.

  • Reply 7 of 17
    jragostajragosta Posts: 10,473member
    john.b wrote: »
    Don't confuse their current strategy with their endgame.  Once they put the other publishers out of business, the vast majority of ebooks will be priced at whateverthehell Amazon decides they should cost.  And they'll pay the authors whateverthehell Amazon decides they should be paid.

    There sure are some dumbshits at the FTC as well as their EU counterparts.

    That's the key point that always gets lost in this discussion.
  • Reply 8 of 17
    dasanman69 wrote: »
    It's only for 2 years. They'll survive just fine. Amazon doesn't sell every ebook at a loss. The vast majority of ebooks cost more or less the same on Amazon, iBooks, Google Play, and B&N.
    Only because of the agency model, before that I really wondered how these companies would stay in business.
  • Reply 9 of 17
    dasanman69dasanman69 Posts: 12,980member
    genovelle wrote: »
    Only because of the agency model, before that I really wondered how these companies would stay in business.

    No, that's with the wholesale model. Yes some books are sold at a loss but not very many. They do need to make some money. Most ebooks are priced comparatively across multiple vendors. Look up a Song of Fire and Ice and you'll find that's it's $29.99 in every estore
  • Reply 10 of 17
    dasanman69dasanman69 Posts: 12,980member
    Cue anecdotes about companies whose outlooks were fine but didn't exist two years later.

    It'll be because of their own doing. They agreed to terms with Amazon.
  • Reply 11 of 17
    hill60hill60 Posts: 6,990member

    Quote:

    Originally Posted by dasanman69 View Post





    It'll be because of their own doing. They agreed to terms with Amazon.


     


    No, they were forced to accept Amazon's terms due to Government intervention.

  • Reply 12 of 17


    Originally Posted by hill60 View Post

    No, they were forced to accept Amazon's terms due to Government intervention.


     


    I think they ought to just stop selling through Amazon.


     


    It'd be sort of ironic.

  • Reply 13 of 17
    Nice.

    Nobody seems to care about the authors/small publishers who are creating a lot of the eBooks sold.

    So, all book distributors can now sell my eBooks for whatever they like and I'll get 30% of whatever that is.

    What would be fair would be for us to go back to the model where we sold our books to a distributor (Amazon/Apple/Barnes & Nobel) for the price we set, and THEN they can sell them (or give them away) for whatever they like. Why should I be a forced partner to any book distributor?

    I much prefer Apple's method, than Amazon's...
  • Reply 14 of 17
    dasanman69dasanman69 Posts: 12,980member
    hill60 wrote: »
    No, they were forced to accept Amazon's terms due to Government intervention.

    I'm talking their original agreement with Amazon. No one made them go with the wholesale model. They agreed to that all by themselves.
  • Reply 15 of 17
    dasanman69dasanman69 Posts: 12,980member
    Nice.
    Nobody seems to care about the authors/small publishers who are creating a lot of the eBooks sold.
    So, all book distributors can now sell my eBooks for whatever they like and I'll get 30% of whatever that is.
    What would be fair would be for us to go back to the model where we sold our books to a distributor (Amazon/Apple/Barnes & Nobel) for the price we set, and THEN they can sell them (or give them away) for whatever they like. Why should I be a forced partner to any book distributor?
    I much prefer Apple's method, than Amazon's...

    That's not how it works. There's a wholesale price per ebook you and the retailer agreed upon. Every ebook sold nets you that price regardless of what it actually sold for.
  • Reply 16 of 17
    dasanman69dasanman69 Posts: 12,980member
    genovelle wrote: »
    Only because of the agency model, before that I really wondered how these companies would stay in business.

    They're not making any more money with the agency model but they do have more control over pricing.
  • Reply 17 of 17
    dasanman69dasanman69 Posts: 12,980member
    john.b wrote: »
    Don't confuse their current strategy with their endgame.  Once they put the other publishers out of business, the vast majority of ebooks will be priced at whateverthehell Amazon decides they should cost.  And they'll pay the authors whateverthehell Amazon decides they should be paid.

    There sure are some dumbshits at the FTC as well as their EU counterparts.

    Bunch of doomsayers on here. If it didn't happen in the 5 or so year lead Amazon had on the competition what makes you think it's going to happen now. Not one peep was heard from anyone about Amazon's tactics until Apple got involved.
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