Europe begins antitrust case against Apple, e-book publishers

Summary:European antitrust authorities are to investigate the 'cartel' practices of e-book publishers, and Apple, in the region.

European antitrust authorities will investigate Apple, along with five major publishers, over alleged anti-competitive practices in the e-book marketplace, the European Commission announced this morning.

The five publishers, including News Corp.-owned HarperCollins, CBS-owned Simon & Schuster (ZDNet and Simon & Schusterare both owned by CBS), and UK-based Penguin Books, will be investigated as a "matter of priority", according to the Commission.

(Source: Flickr, CC)

The Commission is investigating whether the publishers were "helped" by Apple, which offers iBooks as part of its offering for its iOS devices -- including the iPod touch, the iPad, and iPhones.

Europe's executive body will investigate specifically -- careful to separate the publishers and the Cupertino-based technology giant as a possible conduit to illegal activity -- any illegal activity that may lead to or include "restricting competition in the EU or the EEA (European Economic Area)".

The Commission likened the practices of the current e-book market to 'cartels'.

In March, the Commission carried out "unannounced inspections" of several companies' premises involved in the e-book publishing sector, indicating that an antitrust investigation was on the way.

European and member state counterparts did not announce at the time which companies were raided, until today.

The initial raids came only a month after the UK's Office of Fair Trading (OFT), the UK consumer and competition regulator, began its own investigation into e-book publishing.

Citing the "arrangements between certain publishers and retailers for the sale of e-books" as the center of its inquiries, the regulator sought answers to determine whether UK law could be broken, or whether the conduct of such business practices could be having a harmful effect on UK competition rules.

The Commission today acknowledged the parallel investigation between its own regulatory authorities and the UK's OFT.

The OFT had to close its investigation before it handed its findings to the Commission, as part of a wider investigation, on "grounds of administrative priority".

If companies are found to break European antitrust laws, they could be fined up to 10 percent of their global turnover.

Google chairman Eric Schmidt is currently at European powerhouse in Brussels in efforts to smooth over relations, after the European Commission began its own antitrust investigation into the company.

Schmidt is expected to speak to European regulators after the Commission accused of 'cooking' up search results, as well as to smooth over any bumps in the road ahead of Google's upcoming Motorola Mobility acquisition.

While Google had its fair share of book-related controversies, it is not thought that the search giant is implicated in this current antitrust investigation.

A Pearson spokesperson said that it "does not believe it has breached any laws, and will continue to fully and openly cooperate with the Commission", speaking to Reuters.

Apple declined to comment.

Related:

Topics: Apple, Enterprise Software, Hardware, Mobility, Security

About

Zack Whittaker writes for ZDNet, CNET, and CBS News. He is based in New York City.

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