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Apple, Publishers in Secret Talks to Settle European Anti-Trust Case?

News is breaking today that apparently European regulators take as dim a view of anti-trust conspiracies as in the US.

Reuters is reporting this morning that Apple and several publishers are in talks with the European Commission. The conspirators are reportedly trying to stave off a criminal prosecution (and the attending fines).There’s no public info on the parties involved but according to sources the publishers are Simon & Schuster, HarperCollins, Hachette Livre and Holtzbrinck.

There aren’t any specific details on the settlement, but it would reportedly involve releasing Amazon and other ebookstores from ebooks price controls for two years. As much as that might dismay some in publishing, I’m sure the conspirators would prefer this option to the fines, which could reach as high as 10% of their global revenue.

Is it just me or does it appear that Apple and a number of publishers broke the law? I didn’t want to jump to conclusions, but it would seem that we wouldn’t have all these settlements without some serious rule breaking involved.

Several publishers have settled a US antitrust lawsuit while Apple and 2 others are going to trial, and that makes me wonder if this Reuters report is true. I tend to think it is; when it comes to corporate governance Europe has harsher laws than the US and the rumored penalties would best be described as painful.

countries in orange have fixed price laws in effect

On the other hand, given the current state of European book pricing laws I’m not sure how much of an effect this settlement will have. Quite a few countries in the EU have fixed price book laws (Germany, France, Spain and more) so even if Amazon is allowed to discount ebooks under a new contract with publishers they would be blocked from doing so in most of the national markets.

This very issue of discounts came up a couple weeks back when Apple tried to sell discounted iTunes gift cards and ended up having to block those cards from being used in the iBookstore.

In fact, given the current laws in Europe I really don’t see the point of an anti-trust conspiracy. Publishers already had laws on the books which gave them what they wanted: a way to stop Amazon from discounting ebooks.

Then again, I thought that the publishers and Apple would never be able to get away with the US conspiracy, and yet they tried it anyway. Perhaps they’re not as smart as I thought.


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Geert August 31, 2012 um 11:38 am

There is a fixed price book law in the Netherlands. But ebooks are not part of this law.

Frank Skornia August 31, 2012 um 12:11 pm

"Is it just me or does it appear that Apple and a number of publishers broke the law? I didn’t want to jump to conclusions, but it would seem that we wouldn’t have all these settlements without some serious rule breaking involved."

I have believed since the first news of the DoJ’s suit that there must really be a serious case against the accused. Especially regarding the specificity of the details in the DoJ’s case, I think that there is likely a treasure trove of leaked documents that we’ll see as evidence during the trial or even a whistleblower.

It is possible that the DoJ made this evidence available to the European Commission, as there is material in there that pertains to the European publishers and Apple.

Syn August 31, 2012 um 1:03 pm

I believed from the time Steve Jobs was asked how they were going to compete against Amazon and he said, oh, they will all be the same price, that they had worked out a fixed pricing deal illegally with all the major publishers. How did he know they would be the same? Amazon hadn’t even went in to sign new contracts yet.

Peter August 31, 2012 um 3:19 pm

I don’t know, but at this point, it kinda sounds like Simon and Schuster, Harper Collins and Hachette are just signing up for anything anybody suggests.

Amazon wants to sell ebooks under the wholesale model? Cool.
Oh, Apple wants us to switch to Agency? We can do that.
Agency’s illegal? We’ll settle.
You want millions of dollars? Why not.
Europe too? Here ya' go.

Thomas August 31, 2012 um 5:36 pm

There’s something worse than being sued for price-fixing. Namely, having your company’s name in the news day after day for over-charging your customers. By now, I’m sure that most publishers will agree to almost any settlement in the hopes that the bad press will fade away.

Puzzled September 3, 2012 um 12:12 am

Actually, how does this sort of bad publicity really hurt a mainstream publisher?

It isn’t like if you want to buy the latest bestseller you have a choice of publishers to buy it from. When you go to buy that John Grisham novel, you buy that John Grisham novel.

I realise that some people will boycott the publishers, but they are a small, small minority. And if they have favourite authors, they will probably break their own boycott for those authors.

Apple & 4 Publishers Offer a Settlement to Resolve Price-Fixing Investigation in the EU – The Digital Reader September 23, 2014 um 5:41 pm

[…] 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 […]

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