ebook price fixing: Apple and five publishers face EU inquiry
Inquiry to find out if publishing houses and iPad makers have conspired to take on Amazon's dominance
The inquiry is to ascertain whether the six companies are conspiring against Amazon's Kindle reader. Photograph: Mark Lennihan/AP
The European commission has launched an investigation into whether Apple and five large publishing houses have conspired to fix the price of ebooks.
The growing popularity of devices such as the iPad and Kindle, which has sold an estimated 20m units around the world, mean that ebook sales are expected to account for 10% of UK publishers' £2.25bn consumer book income this year, and retailers are battling for control of the market.
In a statement, the commission said it would target Hachette Livre, HarperCollins, Simon & Schuster, Pearson's Penguin and the owner of the Macmillan imprint, Verlagsgruppe Georg von Holtzbrinck, investigating whether they have engaged in anti-competitive practices, possibly with the help of Apple.
The announcement follows raids in March on a number of publishing houses, including offices belonging to Hachette.
The commission is concerned about moves by publishing houses to rein in the dominance of Amazon, which accounts for around 70% of ebooks sold in the UK.
While Amazon decides the price of books and has imposed heavy discounts on electronic titles, sometimes selling them for less than the wholesale price, publishers have signed deals with Apple in which they set the retail price themselves, with the US electronics giant taking a 30% cut.
Publishers began using what is called the agency model when Apple released its first iPads in 2010, and have signed them with other retailers including Kobo and Waterstone's. Amazon has campaigned against the deals, saying they result in higher prices for customers.
According to industry publication the Bookseller, Julian Barnes's novel The Sense of an Ending – £19 in hardback – was on sale for £3.50 in digital form on Amazon the day after he won this year's Man Booker prize, while publisher Random House's agency deal set the cost of the work at £5.
Announcing the investigation, Amelia Torres, the commission's competition spokeswoman, said: "This is an important issue for consumers, for people like me and you who love to read books, including on an electronic platform."
The tide of electronic ink will rise this Christmas with wireless readers expected to be popular. Weeks after WH Smith announced a partnership with Canadian company Kobo to offer a touchscreen reader at £89.99, Asda is now selling another model at £67, significantly less than Amazon's £89 Kindle.
Sales in the first half of 2011 were 600% up on the same time last year for consumer books, and the boom will return in January, as new owners rush to stock their readers with material.
Digital expert Benedict Evans at Enders Analysis said the agency model was not anti-competitive but was invented to prevent monopolies by the world's largest bookseller.
"What the publishers have done is stopped Amazon from crushing the entire independent ebook retail sector," he argued.
"The drive to lower prices is not of itself automatically good for consumers if it leads to a situation where there is only one place you can buy ebooks and that place drives half the publishing industry out of business."
The UK's Office of Fair Trading, which had been conducting its own investigation, has now closed the case, citing administrative priorities.
A spokesman for Pearson said the company "does not believe it has breached any laws, and will continue to fully and openly cooperate with the commission".
Juliette Garside
guardian.co.uk, Tuesday 6 December 2011 19.45 GMT
© 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved.
ebook price fixing: Apple and five publishers face EU inquiry | Books | The Guardian
Inquiry to find out if publishing houses and iPad makers have conspired to take on Amazon's dominance
The inquiry is to ascertain whether the six companies are conspiring against Amazon's Kindle reader. Photograph: Mark Lennihan/AP
The European commission has launched an investigation into whether Apple and five large publishing houses have conspired to fix the price of ebooks.
The growing popularity of devices such as the iPad and Kindle, which has sold an estimated 20m units around the world, mean that ebook sales are expected to account for 10% of UK publishers' £2.25bn consumer book income this year, and retailers are battling for control of the market.
In a statement, the commission said it would target Hachette Livre, HarperCollins, Simon & Schuster, Pearson's Penguin and the owner of the Macmillan imprint, Verlagsgruppe Georg von Holtzbrinck, investigating whether they have engaged in anti-competitive practices, possibly with the help of Apple.
The announcement follows raids in March on a number of publishing houses, including offices belonging to Hachette.
The commission is concerned about moves by publishing houses to rein in the dominance of Amazon, which accounts for around 70% of ebooks sold in the UK.
While Amazon decides the price of books and has imposed heavy discounts on electronic titles, sometimes selling them for less than the wholesale price, publishers have signed deals with Apple in which they set the retail price themselves, with the US electronics giant taking a 30% cut.
Publishers began using what is called the agency model when Apple released its first iPads in 2010, and have signed them with other retailers including Kobo and Waterstone's. Amazon has campaigned against the deals, saying they result in higher prices for customers.
According to industry publication the Bookseller, Julian Barnes's novel The Sense of an Ending – £19 in hardback – was on sale for £3.50 in digital form on Amazon the day after he won this year's Man Booker prize, while publisher Random House's agency deal set the cost of the work at £5.
Announcing the investigation, Amelia Torres, the commission's competition spokeswoman, said: "This is an important issue for consumers, for people like me and you who love to read books, including on an electronic platform."
The tide of electronic ink will rise this Christmas with wireless readers expected to be popular. Weeks after WH Smith announced a partnership with Canadian company Kobo to offer a touchscreen reader at £89.99, Asda is now selling another model at £67, significantly less than Amazon's £89 Kindle.
Sales in the first half of 2011 were 600% up on the same time last year for consumer books, and the boom will return in January, as new owners rush to stock their readers with material.
Digital expert Benedict Evans at Enders Analysis said the agency model was not anti-competitive but was invented to prevent monopolies by the world's largest bookseller.
"What the publishers have done is stopped Amazon from crushing the entire independent ebook retail sector," he argued.
"The drive to lower prices is not of itself automatically good for consumers if it leads to a situation where there is only one place you can buy ebooks and that place drives half the publishing industry out of business."
The UK's Office of Fair Trading, which had been conducting its own investigation, has now closed the case, citing administrative priorities.
A spokesman for Pearson said the company "does not believe it has breached any laws, and will continue to fully and openly cooperate with the commission".
Juliette Garside
guardian.co.uk, Tuesday 6 December 2011 19.45 GMT
© 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved.
ebook price fixing: Apple and five publishers face EU inquiry | Books | The Guardian
