Apple agreement with the European Union would allow lower Amazon e-book prices(Read article summary)
The deal – which would end an antitrust investigation targeted at Apple's e-book pricing in Europe and allow Amazon to sell e-books more cheaply – is good news for Amazon but bad news for publishers.
Apple and four publishers are close to cutting a deal with European Union regulators that will enable Amazon to offer lower e-book prices and end an antitrust investigation into Apple’s e-book pricing in Europe.
The decision effectively hands Amazon a victory in e-book pricing, allowing it to sell e-books more cheaply than its rivals. According to Reuters, a deal was offered to EU regulators in September by Apple and four publishers: News Corp. unit HarperCollins, Simon & Schuster, Lagardere SCA’s Hachette Livre, and Verlagsgruppe Georg von Holtzbrinck, the owner of Germany’s Macmillan. (Pearson’s Penguin group, also part of the investigation, did not take part in the settlement offer.)
The deal, which the EU regulators are poised to accept, allows retailers like Amazon the ability to set their own prices or discounts for a period of two years. It also suspends “most favored nation” contracts for a period of five years. Such contracts bar publishers from making deals with rival retailers to sell e-books more cheaply than Apple.
It was these contracts, which effectively prevented Amazon and other retailers from undercutting Apple’s e-book pricing, which sparked the EU investigation last December.
“The Commission is likely to accept the offer and announce its decision next month,” an EU source said, according to Reuters.