In Europe, Publishers Dealt a Setback Over e-Book Pricing

The European Commission settled its antitrust case against Apple and four book publishing groups over e-book price fixing, in what was described as a victory for the leading online seller, Amazon, and a setback for publishers fighting for the ability to set prices for electronic literature in the digital marketplace.

The European Union’s competition commissioner, Joaquín Almunia, said he was ending his office’s investigation after Apple and the publishers — Simon & Schuster, HarperCollins, Hachette, and Holtzbrinck, the owner of Macmillan — agreed to end their attempt to set prices for e-books through a series of preferred selling agreements. Under those agreements, made in 2010, publishers could set their own prices on e-books, with the retailer acting as an agent taking a commission. Apple championed this agency model. For print books, by contrast, publishers act as wholesalers, charging retailers about half the cover price for a book and then allowing retailers to set their own price to consumers. Amazon built a huge business by offering consumers discounts under this wholesale model. Publishers fear that under the wholesale model, Amazon can sell e-books for less than it pays, taking a loss in the short term to drive smaller competitors out of business, thus gaining a monopoly, to the detriment of the publishers. European Union officials, however, see things differently: that collusion by publishers would lead to higher prices for consumers.