Apple, 4 publishers reach ebook pricing agreement with European Commission

[Top100EbooksRank]

http://paidcontent.org/2012/09/19/ap...an-commission/

http://www.reuters.com/article/2012/...88I0VA20120919

Apple Inc and four major publishers have offered to let retailers such as Amazon.Com Inc sell e-books at a discount to settle an EU antitrust investigation into their pricing deals and avoid possible fines.

The EU watchdog detailed the offer on Wednesday, confirming a Reuters report on August 31.

"For a period of two years, the four publishers will not restrict, limit or impede e-book retailers' ability to set, alter or reduce retail prices for e-books and/or to offer discounts or promotions," the Commission said in its Official Journal.

It said the publishers and Apple also proposed to suspend "most-favored nation" contracts for five years. The clauses barred publishers from making deals with rival retailers to sell e-books at prices lower than those set by Apple.

The EU watchdog said third parties have a month to provide feedback on the proposals. If the response is positive, the Commission will end its investigation without an infringement finding.

Will there be a fine or restitution for EU consumers? (in the USA, it was a $69 million restitution).

Macmillan and Apple agreed to settle in the EU and the "terms" are very similar to the USA one. Will they settle in the USA also?

Here are the terms of the proposed agreement, which largely mirror those in the ebook settlement in the United States:

Apple, Simon & Schuster, HarperCollins, Hachette and Macmillan will terminate their agency agreements. Penguin, which is not included in the settlement (the EC is “still investigationg [its] conduct”), also has the option to terminate its agency agreement with Apple; if it doesn’t, Apple will “terminate the agreement in line with the conditions laid down therein.”

Other retailers, like Amazon, will also have the option to end their agency agreements with the four publishers; if they don’t, the publishers will end them according to the contract terms.

For two years, the publishers “will not restrict, limit or impede ebook retailers’ ability to set, alter or reduce retail prices for ebooks and/or to offer discounts or promotions.”

There is some protection for ebook prices under agency agreements, however: “The aggregate value of the price discounts or promotions offered by any retailer should not exceed the aggregate amount equal to the total commissions the publisher pays to that retailer over a 12-month period in connection with the sale of its ebooks to consumers.” In the United States, publishers have the right to negotiate such a clause with retailers. In the EU, however, it appears that the clause is a requirement (i.e., a retailer can’t say no).

Apple and the four publishers can’t enter ebook contracts with MFN clauses for five years, and “Apple will inform any publisher with which it has an ebook agency agreement that it will not enforce a retail price MFN clause in any such agreement for a period of five years.”

Since the terms of the EU settlement largely mirror that of the USA settlement, why are Macmillan and Apple fighting the USA settlement and want to go to trial?


The EU has this nice anti-trust law:

"If the investigation were to have found the companies in violation of European antitrust laws, each faced penalties equaling up to 10 percent of revenue from global sales."

A settlement would shield the companies from trial and a potential loss of 10% of global revenue.

[HarryT]

I don't understand this:

Apple Inc and four major publishers have offered to let retailers such as Amazon.Com Inc sell e-books at a discount to settle an EU antitrust investigation into their pricing deals and avoid possible fines.

What does Apple have to do with "letting retailers such as Amazon sell e-books at a discount"? Apple doesn't publish e-books, to the best of my knowledge.

[Graham]

Originally Posted by HarryT

I don't understand this:



What does Apple have to do with "letting retailers such as Amazon sell e-books at a discount"? Apple doesn't publish e-books, to the best of my knowledge.

Apple's contracts with the publishers stipulate a 'most favoured nation' clause, by which the publishers must not allow retailers to offer discounts that bring prices to lower than those on the iOS App Store.

Graham

[tango7]

probable lawyer gooblegook

other thing why any time limits
can they go back to bad business practices after those times?

[Apache]

For two years, the publishers “will not restrict, limit or impede ebook retailers’ ability to set, alter or reduce retail prices for ebooks and/or to offer discounts or promotions.”

I guess after two years they can start screwing consumers again.
Apache

[Graham]

Originally Posted by Apache

I guess after two years they can start screwing consumers again.
Apache

My understanding is that it is the collusion that was illegal, not the terms of the contracts themselves.

In two years time they are free to renegotiate agency agreements provided they do not collude to bring about a fixed pricing agreement as a cartel.

Note though that Apple is banned from pursuing a 'most favoured nation' clause for five years, rather than two.

Graham

[fjtorres]

The terms offered sound similar to what the DOJ settlement covers with one notable exception: No auditing/monitoring.
That tells you why they're *really* fighting in the US: they don't want their business and accounting practices scrutinized.
I wonder why...

(And, of course, they're looking to use the Brusselcrats to enforce *coordinated* limits on discounting that amount to, yes, *another* conspiracy to fix prices and limit discounting. But this one government sanctioned and enforced.)

They'll probably get away with it, too, given that EU antitrust is not about consumer protection at all.

[DrNefario]

I don't see why there should be any restitution, to be honest. If you were willing to pay the price, you were willing to pay the price.

[fjtorres]

Originally Posted by DrNefario

I don't see why there should be any restitution, to be honest. If you were willing to pay the price, you were willing to pay the price.

"The guilty should not profit from their crimes."

There's a whole school of law that flows from that concept.
Try this one:
http://en.wikipedia.org/wiki/Son_of_Sam_law

[murraypaul]

Originally Posted by fjtorres

"The guilty should not profit from their crimes."

But that is satisfied by fining the companies.
It is separate question whether money should be paid back to consumer.
Almost the reverse: "The innocent should not suffer from the crimes of others."

[tango7]

Originally Posted by murraypaul

But that is satisfied by fining the companies.
It is separate question whether money should be paid back to consumer.
Almost the reverse: "The innocent should not suffer from the crimes of others."

I want my money.

[Sil_liS]

Originally Posted by DrNefario

I don't see why there should be any restitution, to be honest. If you were willing to pay the price, you were willing to pay the price.

The market is supposed to work based on feedback. If one company increases the prices, the consumers use another company. When the companies collude, that no longer happens, and the system is broken. The people who break the system, should make a restitution.

[DrNefario]

So, if I chose not to pay the higher prices, I am penalised?

I can pay the new lower price (when are these changes actually going to come into effect, anyway?), but someone who bought at the high price gets the restitution and has had the book for a year.

[HarryT]

Originally Posted by DrNefario

So, if I chose not to pay the higher prices, I am penalised?

I can pay the new lower price (when are these changes actually going to come into effect, anyway?), but someone who bought at the high price gets the restitution and has had the book for a year.

I agree with you. Eg, as mentioned in another thread, I'm happy to pay £7 for Anne McCaffrey's eBooks. If anyone doesn't think they're worth that, nobody's holding a gun to their head and forcing them to buy them. If Amazon subsequently becomes free to discount this book and it falls to, let's say, £5, that's great for future buyers, but I made the free choice to buy the book for £7; I don't think I'm entitled to get £2 refunded merely because the price falls in the future.

[Sil_liS]

Originally Posted by DrNefario

So, if I chose not to pay the higher prices, I am penalised?

I can pay the new lower price (when are these changes actually going to come into effect, anyway?), but someone who bought at the high price gets the restitution and has had the book for a year.

That isn't how it works. The consumers don't get the money.