Apple & 4 Publishers Offer a Settlement to Resolve Price-Fixing Investigation in the EU
While 3 of the Price Fix 6 are still fighting the antitrust lawsuit here in the US, it looks like their resolve is wavering in Europe. The rumor reported last month that an anti-trust settlement was in the works is true.
The European Commission announced this morning that they have received a settlement offer from 5 of the conspirators involved in the Price Fix 6. Apple, S&S, Macmillan (von Holtzbrinck), HarperCollins, and Hachette have all signed on with a set of term which would basically mirror the US settlement.
This settlement grew out of a nearly year long investigation by the EU into allegations that Apple and 5 of the major publishing conglomerates conspired to bring about agency pricing in the ebook market back in 2010.
The publishers would agree to cancel existing contracts with ebook retailers allow the retailers to set the retail price for ebooks for at least the next 2 years, and they also would agree to not allow a most-favored-nation clause in contracts with retailers. There’s also a clause in the settlement which would prevent any ebookstore from selling ebooks at a loss. This settlement would also require Apple to renegotiate their contracts with their ebook suppliers.
But there’s a couple details which aren’t clear to me. I don’t see where fines for the publishers are mentioned, nor does the settlement mention Apple’s punishment (did I miss something?). The device maker is still fighting the accusation in the US that they acted as the center of a hub and spoke conspiracy, but this settlement offer makes it pretty damn clear that the accusation is true, not alleged. Since they clearly are guilty of arranging the conspiracy (or at least guilty enough that they’re not going to fight the case in the EU), I have to wonder how much they will be fined.
This settlement doesn’t mention fines at all, and that’s the real story here. I’m told the EU tends to levy steep fines against convicted corporations, and that is likely what this settlement offer is trying to avoid. While in the US the 3 settling publishers will be paying $70 million back to customers, the fines in the EU could start at around $100 million each and go up from there.
While the actual financial impact on the market was small, each of the conspirators is a rather large company and I suspect the EU might decide to slap them with a fine which reflects the corporation’s income, not the benefit gained from the conspiracy.
In any case, the proposed settlement has been posted so 3rd-parties can offer feedback over the next month. If the response is positive, the Commission will end its investigation.