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Canadian Regulators Reach Deal With Apple, Publishers on eBook Pricing Controls

There is much gnashing of teeth today in Toronto as the Canadian Competition Bureau defeats Kobo’s years-long effort to avoid competing with Amazon.

Canada’s business competition watchdog said on Friday it had reached an agreement with Apple and three major ebook publishers that will allow retailers to offer discounts to customers.

The Competition Bureau’s investigation found that an arrangement between the publishers and Apple led to higher prices for Canadians.

The watchdog said it had entered into consent agreements with Apple, Hachette, Macmillan and Simon & Schuster that will let other retailers, including Amazon and Kobo, give discounts on ebooks by those publishers.

The Competition Bureau, however, was unable to reach an agreement with a fourth publisher involved, HarperCollins, and filed an application to order it to halt its alleged anti-competitive practices.

The U.S. Supreme Court last year declined to hear Apple’s challenge to a court decision that it conspired with five publishers to increase ebook prices.


Both Kobo and Amazon were queried for comment; the latter has not responded, but Kobo released the following statement.

"We will review the decision that has been made, and will work with publishers as their terms change," said Michael Tamblyn, CEO, Rakuten Kobo. "We will continue to offer our customers the best eReading experience here in Canada as we do around the world. Everything we do is for the reader; as always, we will continue to offer Canadian consumers a great selection of books with regular promotions and discounts, taking advantage of these changes to encourage even more people to read digitally."

You should take Kobo’s statement with a grain of salt; this is the same company that spent two and a half years fighting a 2014 settlement agreement which would have ended agency pricing in Canada.

Kobo appealed that agreement, arguing that they could not compete effectively with Amazon if ebook retailers were allowed to lower prices. They won their appeal in June of last year, forcing the CCB to discard the 2014 agreement.

And now their work has come undone – but you shouldn’t celebrate just yet.

Yes, Apple and three publishers have settled, but what were the terms of the settlement? Are consumers really going to benefit?

Remember, when the DoJ settled with 5 publishers in 2012 and 2013, that agreement allowed for only limited discounting. And then that agreement expired, after which agency pricing returned to the US ebook market.

Will Canada follow a similar path?

The CCB has not released the settlement agreement itself, so that question cannot be answered.

Edit: The settlement agreements are pretty weak tea. All four companies agreed to give up MFN clauses for three years, and the publishers agreed to give up agency pricing for a grand total of nine months.

That’s not nine years or nineteen months; we’re talking three quarters of price competition in Canada before the publishers can reassert control.

Reporting by Leah Schnurr, editing by G Crosse, commentary and background by Nate Hoffelder

image by statschew

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1 January 20, 2017 um 10:44 pm

"All four companies agreed to give up MFN clauses for three years, and the publishers agreed to give up agency pricing for a grand total of nine months."

Well that’s a disappointment.

Thanks for researching the terms of the aggreement.
All the other articles I’ve read didn’t bother to even wonder, let alone find the answer.

Nate Hoffelder January 20, 2017 um 11:21 pm


I will follow up with another post which covers that part specifically. I think it is pretty damn important because it shows that the consent decree is meaningless.

And do you know what is funny about no one else bothering to ask?

It’s that the consent decrees were linked to from the press release. The links were down at the very bottom of the page – the part where no one bothered to look.

Alexander Inglis January 20, 2017 um 11:33 pm

But as a practical matter, ebook prices on Amazon .ca and Kobobooks .ca are in lock step and have been for years. Whether anything changes remains to be seen.

Darryl January 21, 2017 um 5:57 am

Nothing will change. Apple compete on price? That I would like to see. Unfortunately for Consumers the days are over when Amazon was willing to throw its onw money at the problem and fund reasonable prices. Now Amazon are happy let Agency Publishers shoot themselves in the foot. They make money selling agency ebooks. They make money selling Big 5 print books. And they make money selling their own books and self-published books, the latter two at far more reasonable prices than the Agency publishers. Price Competition in Book sales in Canada is dead and going to stay that way for the imte being, except for competition between traditionally published books and Indie/Self Published books. With the latter continually gaining more market share.

Nate Hoffelder January 21, 2017 um 7:57 am


HarperCollins Settles Canadian eBook Price-Fixing Dispute, Gets a Slap on the Wrist | The Digital Reader January 13, 2018 um 7:36 pm

[…] January the Canadian Competition Bureau announced that it had reached a settlement with Apple and three of the major Canadian publishers for their […]

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