News

European Commission opens formal investigation into sale of e-books

The European Commission has announced it has opened formal antitrust proceedings to investigate whether publishers Hachette Livre, HarperCollins, Simon & Schuster, Penguin and Holtzbrinck "have, possibly with the help of Apple, engaged in anti-competitive practices affecting the sale of e-books in the European Economic Area, in breach of EU antitrust rules".

The opening of proceedings means that the Commission will treat the case as a matter of priority, it said, adding that this did not prejudge the investigation's outcome.

The Commission said it would investigate whether publishers and Apple had engaged in illegal agreements or practices that would restrict competition,and would also examine "the character and terms of the agency agreements entered into by the above named five publishers and retailers for the sale of e-books", with "concerns that these practices may breach EU antitrust rules that prohibit cartels and restrictive business practices".

The move follows the launch by the Commission of an inquiry into publisher e-book sales last spring.

Meantime the Office of Fair Trading is closing its own investigation into e-book sales, also believed to be focusing on the use of the agency model and launched in January.

The OFT said the decision to close the investigation had been made "because the OFT believes, following discussions with the European Commission, that the European Commission is currently well placed to arrive at a comprehensive resolution of this matter and will do so as a matter of priority."

The OFT said it will "continue to cooperate closely with the European Commission on this matter to help secure the best outcome for UK consumers" and that it may reconsider its decision to close its own investigation if it has "reasonable grounds" in the future to suspect that there is an infringement of competition law.

 "The OFT has not reached any view as to whether or not the parties involved have infringed competition law," it stated.

 

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Maybe at the same time, the EC could have a look into that mysterious 15% VAT on ebooks, eh? I'm not actually convinced that reading counts as any sort of luxury...

15% VAT would be mysterious...

CORRECTED VERSION

Here is the reality.

Publisher's have taken a look at what they make when they sell a hardcover based on standard royalties and what publishers pay an author as a percentage of the sale of the work.

They took that royalty based on the retail selling price and came up with an ebook royalty which is virtually the same. It is simply math and simply business.

Here is what I suggest the EU focus on.

1. Where has all the money loaned out to failing countries gone?

2. Fix a brokan banking system.

3. Start using resources to rebuild faltering economies.

This is a much better use of EU resources and time. Rather than going after a group of publishers who are all very competitive with each other normally.

Robert Gottlieb
Chairman
Trident Media Group, LLC
www.tridentmediagroup.com

Maybe at the same time, the EC could have a look into that mysterious 15% VAT on ebooks, eh? I'm not actually convinced that reading counts as any sort of luxury...

15% VAT would be mysterious...

CORRECTED VERSION

Here is the reality.

Publisher's have taken a look at what they make when they sell a hardcover based on standard royalties and what publishers pay an author as a percentage of the sale of the work.

They took that royalty based on the retail selling price and came up with an ebook royalty which is virtually the same. It is simply math and simply business.

Here is what I suggest the EU focus on.

1. Where has all the money loaned out to failing countries gone?

2. Fix a brokan banking system.

3. Start using resources to rebuild faltering economies.

This is a much better use of EU resources and time. Rather than going after a group of publishers who are all very competitive with each other normally.

Robert Gottlieb
Chairman
Trident Media Group, LLC
www.tridentmediagroup.com