PublishersLunch
HarperCollins, Hachette, Macmillan and
Simon & Schuster have joined with Apple in offering to settle with the
European Commission over the introduction of agency ebook pricing in Europe,
"with a view to seeking an early resolution of the case." The
Commission is "still investigating Pearson's conduct" and its
"compatibility" with EU regulations.
The proposed settlement closely mirrors
conditions that three of those publishers have already agreed to in the US. As
in the US, Apple's existing agency agreements with the Settlers as well as
Penguin will be terminated and the most favored nations clause will be barred,
and the Settlers' other agency contracts will also be terminated. Agency Lite will
in place for two years, with the same ability to limit a retailer's total
discounts and incentives to customers to no more than their total commissions
earned in a year. And MFNs will be barred for five years.
There is a one-month period for comments--or
what the EC calls a "market test"--before the commission "may
make them legally binding on the companies." The EC notes that "the
four publishers and Apple do not agree with the Commission’s preliminary
assessment. They have nevertheless offered commitments...in order to
meet the Commission’s competition concerns. These commitments are without
prejudice to national laws which allow or oblige publishers to set the
retail price for e-books at their own discretion ('RPM laws')."
In a statement, Hachette Livre emphasized
the company "remains confident that it did not violate the antitrust laws,
and has made no admission of liability. Hachette Livre considers that its
unilateral decision to enter into agency agreements with Apple and other
e-retailers was in the best longer-term interests of the whole book universe
including authors, readers and booksellers of all kinds. However, Hachette
Livre has decided that the costs, length, and distractions of the proceedings
before the European Commission would be too disruptive to its business and to
the development of e-book markets in general.
So far, the EC's finding is less aggressive
than the cases in the US as well. It is a "preliminary assessment" in
which "the Commission took the preliminary view that, by jointly switching
the sale of e-books from a wholesale model to an agency model with the
same key terms on a global basis, the Four Publishers and Apple engaged in
a concerted practice with the object of raising retail prices of e-books
in the EEA or preventing the emergence of lower prices in the EEA for e-books
in breach of" EC provisions. By agreeing to a settlement, the parties
avoid the threat of the larger fine that can be imposed under EU antitrust
rules, without a formal trial: "If a company breaks such commitments, the
Commission can impose a fine of up to 10% of its annual worldwide turnover,
without having to find an infringement of the antitrust rules."
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