November 7, 2012
Terms Of Apple Settlement With Europe In e-Book Probe Reported
Apple and major e-book publishers are set to settle an antitrust investigation by the European Union that parallels the contentious litigation Apple and publishers face in the United States. The allegations before the European Commission is essentially the same: Apple’s “most favored nation” contracts with publishers combined with adoption of the agency model inflated e-book prices for consumers. Amazon played a factor in Europe as much as in the United States as it wants to discount e-books to build market share.
Reports indicate the unannounced terms Europe is ready to accept include Apple dropping its MFN contracts for a period of five years and letting retailers set their own prices for two years. A formal announcement is expected within a month. I wrote about this last September in a post titles Apple And Publishers To Settle e-Book Case in Europe. The Commission at that point had made an initial determination that Apple and publishers had likely breached European trade laws. The more recent announcement offers some specific remedies the parties have agreed upon. That post speculates that the motivation for settling may be in the fact that the e-book market is worth a lot less that in the United States. On that basis, it may not be worth the fight.