Apple and Publishers Investigated on e-Book Pricing

Formal antitrust proceedings have been kicked off by the European Commission to investigate the matter of e-book price rigging by several renowned publishers “with the help of Apple.” Apple maintains the iBookstore, a section of the iTunes store where iPad, iPhone and iPod touch owners can download paid and free e-books online. The Cupertino company also has an iBooks app.

The move comes after a number of unannounced inspections at the premises of several companies active in the e-book publishing sector.

The European Commission’s press release reveals that “[it] has opened formal antitrust proceedings to investigate whether international publishers Hachette Livre (Lagardère Publishing, France), Harper Collins (News Corp., USA), Simon & Schuster (CBS Corp., USA), Penguin (Pearson Group, United Kingdom) and Verlagsgruppe Georg von Holzbrinck (owner of inter alia Macmillan, Germany) have, possibly with the help of Apple, engaged in anti-competitive practices affecting the sale of e-books in the European Economic Area (EEA), in breach of EU antitrust rules.”

Specifically, the Commission will investigate whether Apple and the publishers have “engaged in illegal agreements or practices that would have the object or the effect of restricting competition in the EU or in the EEA.”

While they’re at it, the Commission will also be looking at the character and terms of the agency agreements entered into by the publishers and retailers.

The report specifically adds that “the Commission has concerns, that these practices may breach EU antitrust rules that prohibit cartels and restrictive business practices (Article 101 of the Treaty on the Functioning of the European Union – TFEU).”

Several factors are likely to affect the duration of the investigation, such as the complexity of each case, and the extent of the cooperation of every party.

“The Commission has informed the companies and the competition authorities of the Member States that it has opened proceedings in this case,” the report concludes.