14.05.10 | Catherine Neilan and Philip Jones in The Bookseller
Publishers must ensure that they are "in control" of any agreement signed with Apple on an agency basis, if they are not to fall foul of the UK's competition laws.
With the iPad due to launch in the UK on 28th May, the legality of the model in the UK is yet to be established. Industry sources have warned for several weeks that the agency model used to sell e-books through the iBookStore could face legal hurdles.
According to Serena Hedley-Dent, partner at London solicitor Farrer & Co, it is essential that the model is seen to be "genuine" to avoid being seen as collusion. She explained: "Within an agency model, you have to know who is actually driving the deal . . . If [Apple] are imposing their own terms and conditions, their own retail prices, effectively you have collusion among publishers because they are all being signed up on the same terms. Publishers need to make sure if they are signing an agency agreement they are in control of it, and setting their own terms and prices."
However, she added that some markets were so competitive that it was difficult to establish why pricing of a product settled around the same figure. "What this throws up is there may be something the competition authorities want to look into, to make sure it is working as it should be, instead of being a front for something else."
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