The deals between four publishers, Apple and the European Commission over its e-book price-fixing probe could take “months” to become legally binding.
The EC revealed this week that Simon & Schuster, HarperCollins, Hachette Livre, Holtzbrinck and Apple had agreed to modify or terminate their agency agreements after an EC investigation came to the preliminary conclusion that they had “engaged in a concerted practice” to raise e-book prices or prevent the emergence of lower prices across Europe. The EC also found that the publishers had to pressure other major e-book retailers offering e-books to consumers in Europe to adopt the agency model.
The settlements now face a period of prolonged “market testing”, part of which is a month-long invitation for interested third parties to submit “reasoned” comments. The EC said that after this scrutiny it “may make them legally binding on the companies” unless there were substantial changes to the commitments, in which case a new market test will be launched.
But Vivienne Robinson, a lawyer specialising in competition law, said the EC could take “as long as nine months” to make these deals binding, a view backed by other sources. Robinson also questioned whether the settlements made it any clearer if the agency model was legal. “They appear to have answered one question, whether collusion took place, but not the second issue over the agency model,” she said.
Robinson said the agreements simply “delayed for two years” implementation of full-agency, without clarifying if agency was against competition law, and warned that this could leave the publishers open to further legal challenges from the likes of Amazon.
The four publishers and Apple contested the EC’s findings but agreed to the settlements in order to conclude the investigation quickly and without additional cost. The publishers and Apple have agreed for two years not to “restrict, limit or impede” retailers from reducing the price of e-books or offering discounts.
They have also agreed not to enter into any e-book agreement that contains a most favoured nation (MFN) clause for five years. Apple must also end its agency deal with Penguin, even though Penguin has not agreed to settle and remains under investigation by the EC.
The EC's press office did not respond to requests for comment.