Apple e-book settlement with EU will allow Amazon to set prices

E-book publishers agree to allow retailers including Amazon to determine their own prices

Apple and four other e-book publishers have settled an antitrust battle with the European Union.

After a year of investigations into allegations of cartel price-fixing, the European Commission has decided to accept commitments to alter e-book pricing practices from Harper Collins, Hachette Livre, Simon & Schuster, Penguin, Macmillan and Apple.

The Commission concluded that an infringement had very possibly taken place when the publishers together with Apple jointly switched to an agency sales model to set e-book prices.

Despite this, the competition watchdog decided not to impose fines, instead opting to accept promises from the companies that they will terminate the current agency agreements and, for a period of two years, will not hamper e-book retailers, such as Amazon, from setting their own prices for e-books or from offering discounts and promotions.

The Commission made the decision in order to resolve the situation in what is a very fast-moving market. "This route is the quickest way to bring competition back to this market, to the benefit of all consumers who buy e-books in Europe," said the Commission statement.

Apple and the four publishers seemingly shared the goal of limiting retail-price competition, particularly with regard to Amazon, which was the uncontested leader in the retail market for e-books at the time of the change, said the Commission. Under a wholesale model, the retailer is free to set the price, but with an agency model, the retail price of e-books is determined by the publishers themselves.

A fifth publisher, Penguin is still under investigation, but the Commission said it was engaged in "constructive discussions" with the company.

Follow Jennifer on Twitter at @BrusselsGeek or email tips and comments to jennifer_baker@idg.com.

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