Apple and publishers facing inquiry

European Commission investigating publishers and Apple

The European Commission is investigating whether five e-book publishers may have colluded with Apple to block rivals via their pricing deals.

US regulators are also looking into pricing deals imposed under an agency model in which publishers set the retail price. Antitrust rules forbid price-fixing agreements designed to shut out competitors. In the traditional "wholesale model", publishers set a recommended retail price, but the seller is free to offer deep discounts.

"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 European Union or in the European Economic Area," the EU's executive Commission said in a statement. "The Commission is also examining the character and terms of the agency agreements entered into by the above named five publishers and retailers for the sale of e-books," it said.

The commission identified the publishers as French media-to-aerospace group Lagardere's Hachette Livre unit, News Corp's Harper Collins, CBS Corp's Simon & Schuster, Pearson's Penguin and Verlagsgruppe Georg von Holzbrinck, which owns Macmillan in Germany.

A Pearson spokesman said the group would work with regulators in the investigation. "Pearson does not believe it has breached any laws, and will continue to fully and openly cooperate with the Commission," the spokesman said.

Apple declined to comment.

E-books are fast gaining popularity in Europe and in Britain, e-books already account for about 10 per cent of book sales by volume and a fifth of revenue.

Britain's Office of Fair Trading said it would coordinate with the EU regulator on the e-book sector and was closing its own investigation into the matter.

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