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It seems that Apple is back in the legal eye as the European Union looks toward the tech giant to see whether they assisted five of the larger publishing houses in illegally raised prices for eBooks at the time of the iPad and iBookstore launch in 2010. This probe comes as the eBook market surges with the popularity of eReaders and tablet devices growing rapidly.
The problem revolves around Agency Agreements, which Apple was the first to adopt. These agreements allow publishers to set their own retail prices. This differs from the old model where publishers set a wholesale price and it was up to the retailer to decide on the selling costs.
In response to these allegations, the European Commission regulator stated that they have “concerns that these practices may breach EU antitrust rules that prohibit cartels and restrictive business practices.” The problem of course is that now retailers cannot choose to sell these publications at a lower cost which restricts competition.
Whether they are in violation of the law or not, I cannot comment. I can say that I actually appreciate the common pricing among retailers because it means I can go with the store that I most like purchasing from with instead of shopping for the lowest cost. I would think this is also of benefit among eReader and tablet manufacturers as they are not competing based on the cost of digital content delivery in addition to hardware investment costs.
USA Today indicates that the investigation “targets publishers Hachette Livre, a unit of France’s Lagardere Publishing; Harper Collins, owned by Rupert Murdoch’s U.S.-based News Corp.; CBS Corp.’s Simon & Schuster; Penguin, which is owned by U.K. publishing house Pearson Group; and Germany’s Verlagsgruppe Georg von Holtzbrinck, which owns Macmillan.”
This is the second legal hit against Apple with the first being a class-action lawsuit filed this summer involving the same 5 publishers. That lawsuit stems from the accusation that Apple was trying to eliminate Kindle as competition –which may be true, but also seems a little silly given the fact that Amazon.com continues to dominate that market and always has.
So far, Apple has not commented on the case.
[via USA Today]