July 26, 2013

Penguin settles with EU over ebook pricing

by

Joaquin Almunia

Penguin has settled with the European Union over the ebooks antitrust case that has been going  since December 2011, making it the final publisher to settle this case.

It’s over. Admittedly, the EU case hasn’t had the drama of the smoking gun email from Steve Jobs that turned out to be a draft, or the “feisty” testimony of Carolyn Reidy that made the DoJ case so lively until the end, but it does mark the end of the ebook pricing case in Europe.

In the EU settlement, Penguin is agreeing to end its agency agreements with Apple and other retailers and drop the “most-favored nation” from any new deals struck over the next five years. E-book retailers will now be able to control prices and discounts of Penguin’s catalog for two year. (If a company breaks EU settlement commitments, the commission can impose a fine of as much as 10% of its annual global sales.)

Penguin’s proposal was “substantially the same” as those previously accepted from Simon & Schuster, HarperCollins, Hachette Livre and Holtzbrinck, which we reported last year. Apple’s proposal was accepted in December along with the other publishers.

“The commitments are now legally binding on Apple and all five publishers including Penguin, restoring a competitive environment in the market for e-books,” EU Competition Commissioner Joaquin Almunia said in a statement.

All of the publishers may have settled in Europe, but there may be more to come in the US. Apple plans to appeal the ruling in the DoJ case, according to an article by Francis Robinson in the WSJ.

 

Kirsten Reach was an editor at Melville House.

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