Friday, August 31, 2012

Apple, Publishers Make An Offer To Settle Over E-Book Price Fixing In The UK

Apple along with publishers Harper Collins, Simon & Schuster, Hachette Livre, Penguin (Pearson Group, United Kingdom) and Verlagsgruppe Georg von Holzbrinck have faced broad scrutiny over claims of e-Book price fixing and the possibility of collusion. Regulators in both the US and UK have opened investigation into the company's practices, an investigation that has lead several of the publishers to reach a settlement with US authorities. Apple however, has continued the fight with US authorities claiming no wrong doing.! Best quality products at the lowest price, Always!Now after a 10 month investigation by the European Union (EU) it looks like Apple and at least four of the publishers are willing to make some concessions. Apple and the four publishers reportedly have made an offer to avoid further investigation, penalties and potentially keep them out of court.

The offer was to allow Amazon and other retailers to sell e-books at a discount for two years. The Commission is now looking into whether these concessions are enough by taking opinions from the industry.

The four publishers had an exclusivity deal with Apple that let the company sell e-books in iTunes, but stopped other retailers from selling the same books at a lower price. Apple persuaded publishers to adopt an "agency model" in 2010 under which they set the price of e-books and Apple took a 30 percent cut. This differed from Amazon's "wholesale model" in which retailers pay a fixed price for a product and then charge what they like, essentially letting demand dictate the price and allowing the retailers to charge a lower price to make as much or as little profit as they see fit.

This move comes as a bit of a surprise by Apple as the company has refused to settle with authorities the US. Apple said this week in a legal memo regarding the US investigation that "it denies the allegations against it and is actively defending this case."

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