European Union antitrust authorities are investigating Apple along with five international publishing firms for possible price fixing of e-books. The probe launched by the European Commission will attempt to determine dealings between the iPad maker and major US publishers HarperCollins and Simon & Schuster.
Britain’s Penguin and France’s Hachette Livre are also under the spotlight, along with German publishing house Verlagsgruppe Georg von Holtzbrinck.
The EU Competition Commissioner Joaquin Almunia said in a statement that “the Commission will in particular investigate whether these publishing groups and Apple have engaged in illegal agreements or practices that would have the object or the effect of restricting competition in the EU or in the EEA.”
As financial stakes in the e-book rise ever higher, EC competition spokesperson Amelia Torres said it is of utmost vital to guard consumers against anti-competitive practices. "This is an important issue for consumers, for people like me and you who love to read books, including on an electronic platform," said Torres at a news conference.
Raid On E-book Publishers
Apple first came under the scrutiny of EU authorities when they raided offices of several e-book publishers across Europe in March. The documents seized contained information that roused the suspicion of antitrust regulators.
In addition to possible antitrust infringement on the part of Apple and the five publishers, the Commission said its investigation will also closely examine the terms of agreement between the publishing houses and e-book retailers.
"The Commission has concerns that these practices may breach EU antitrust rules that prohibit cartels and restrictive business practices," the EU Competition Commission said in a statement.
In the United Kingdom the Office of Fair Trading had also been conducting its own probe into anticompetitive practices in the e-books industry. But with Brussels now taking the lead, the British government will put its investigation aside.
The Office of Fair Trading will assist the EC and share all findings relating to the matter.
Apple has dominated the tablet market since it pioneered the handheld device in April 2010. The iPad allows users to browse the internet, check emails and download various forms of multimedia, while also providing reading enthusiasts with all its latest e-books titles.
But the contest for e-reader supremacy is not quite so one-sided, with Apple having to take the fight to Amazon. While the online marketplace giant’s recent tablet challenger, the Kindle Fire, is yet to pose a serious threat to the iPad, its Kindle is by far the most popular e-reader and also has the most extensive collection of e-books.
Canadian company Kobo recently embarked on an aggressive e-reader campaign, joining forces with WH Smith to launch its challenge to Amazon. Sony’s PRS-T e-reader has failed to have the same impact as its rivals.
Key Statistics – Global e-book Market (source: The Digital Reader)
- E-book sales account for some 17% of revenue at Simon & Schuster.
- E-books account for around 20% of Hachette’s sales in the US and 8% in the UK – double the amount from the first half of last year.
- HarperCollins e-books sales make up around 12% of total figures.
- E-books represent 5% of net sales for France’s Lagardere Publishing business.
- Penguin’s e-book sales account for 14% of total revenues.