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EU Opens Antitrust Probe of Apple, E-Book Publishers

 & Chloe Albanesius Executive Editor, News

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The European Commission on Tuesday announced that it has opened a formal antitrust investigation into whether major book publishers colluded—possibly with Apple—on the sale of e-books.

Publishers named in the investigation include Hachette Livre (Lagardère Publishing), Harper Collins, Simon & Schuster, Penguin (Pearson Group) and Verlagsgruppe Georg von Holzbrinck (Macmillan).

The commission said it will 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 Europe. Officials are also looking at the deals these companies signed for the sale of e-books, which might violate EU antitrust rules that prohibit cartels and restrictive business practices.

The EU said it conducted unannounced inspections at several large e-book publishing companies back in March 2011 to gather evidence.

The U.K. Office of Fair Trading (OFT), meanwhile, was also investigating e-book deals, and recently closed its investigation. "OFT has made a substantial contribution to the ebooks investigation and will continue to co-operate closely with the Commission going forward," the commission said.

In a statement, Penguin's Pearson Group said it "welcomes the OFT's decision to close its investigation. As the EU Commission said, the fact that it has initiated proceedings does not prejudge the outcome of its investigation. Pearson does not believe it has breached any laws, and will continue to fully and openly cooperate with the Commission."

Simon & Schuster said it has no comment beyond the fact that it is cooperating with the investigation. A Harper Collins spokeswoman also said the company is cooperating. Hachette said the company had no comment, and Macmillan did not immediately respond to a request for comment.

Apple also did not respond to a request for comment.

The EU announcement comes about four months after a Seattle-based law firm filed a class action lawsuit against Apple and several major publishers, accusing them of colluding to increase e-book pricing and forcing Amazon to ditch e-book discounts.

Last year, meanwhile, Sen. Richard Blumenthal, then attorney general for Connecticut, penned a letter to Amazon and Apple, expressing concern that the companies' e-book deals with publishers might be anti-competitive. Negotiating a price floor for e-books would prevent competitors or new entrants to the market from offering discounts on certain e-books, Blumenthal said at the time.

Amazon temporarily removed books from Macmillan in January 2010 after a battle over e-book pricing. Books from Penguin were also unavailable for almost two months amidst a similar argument; that issue was resolved in May 2010.

Earlier this year, Apple introduced a subscription billing platform for the App Store, under which it takes a 30 percent cut of revenues. That prompted Amazon, and other e-book providers, to pull support for e-book purchases from their iOS apps in order to avoid handing over that 30 percent. Kindle and Nook e-book purchases are now handled via the browser on Apple devices.

About Our Expert

Chloe Albanesius

Chloe Albanesius

Executive Editor, News

My Experience

I started out covering tech policy in DC for The National Journal, where my beat included state-level tech news and all the congressional hearings and FCC meetings I could handle. I later covered Wall Street trading tech before switching gears to consumer tech. I now lead PCMag's news coverage.

My Areas of Expertise

Getting my start in DC means I still have a soft spot for tech policy; Congressional hearings can sometimes be as entertaining as a Bravo reality show, for better or worse. But PCMag is all about the technology we use every day, as well as keeping an eye out for the trends that will shape the industry in the years ahead (or flop on arrival). I've covered the rise of social media, the iOS vs. Android wars, the cord-cutting revolution that's now left us with hefty streaming bills, and the effort to stuff artificial intelligence into every product you could imagine. This job has taken me to CES in Vegas (one too many times), IFA in Berlin, and MWC in Barcelona. I also drove a Tesla 1,000 miles out west as part of our Best Mobile Networks project. Of late, my focus is on our hard-working team of reporters at PCMag, guiding and editing their robust coverage.

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