Apple, publishers to offer EU antitrust concessions: report

Despite saying it will "fight" the U.S.' claims that Apple conspired to fix e-book prices, the Cupertino-based company may take alternative action in Europe where the fines are far steeper.
Written by Zack Whittaker, Contributor

Apple and four publishers have offered concessions in a bid to end an ongoing EU antitrust investigation and avoid heavy fines, according to a source familiar with matters speaking to Reuters.

EU antitrust authorities opened an investigation into Apple's dealings with other major publishers in December, claiming that the iPhone and iPad maker conspired to fix e-book prices which may hamper competition in the region.

U.S. authorities opened their own investigation in April following the move by the EU. Apple said it would fight the claims it acted in a "cartel" with other publishers, but now may be seeking alternative solutions.

Apple has submitted proposals to sell e-books at a discounted rate for two years in efforts to avoid fines that could tally up to 10 percent of Apple's global annual revenue, or €13.5 billion ($10.8 bn).

CBS-owned Simon & Schuster (ZDNet is also owned by CBS), News Corp.-owned HarperCollins, Lagardere's Hachette Livre, and Macmillan are all offering the same concessions, according to the report. While Penguin is also being investigated on similar claims, it was not one of the publishers who offered a concessions proposal.

The deals are similar to those reached in U.S. price-fixing settlements with HarperCollins, Simon & Schuster, and Hachette.

The source told Reuters: "The Commission is market testing the commitments on an informal basis."

Apple uses the 'agency' model in its iBookstore offerings, where e-book authors and sellers must hand over in this case a 30 percent cut of each sale. It allows publishers to set the prices, rather than the vendors. However, Amazon uses 'wholesale' pricing that gives authors and sellers greater flexibility to price their work. 

The deals inked between Apple and its "cartel" partners specified that they could not sell the books at a lower price on rival online bookstores, such as the Amazon store.

Apple did not respond for comment at the time of writing.

Image credit: David Carnoy/CNET.

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