Friday, 09 March 2012 08:42

Apple and book publishers under US legal cloud

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Legal concerns about arrangements between Apple and book publishers have spread across the Atlantic.

Last December, iTWire reported that the European Commission (EC) had begun a formal investigation concerning possible anti-competitive practices relating to ebook sales by five publishers through Apple's iBookstore. According to reports, the US Department of Justice is preparing to take action against the same group.

The publishers under scrutiny in the US are reportedly the same as those investigated in Europe: Hachette Livre, Harper Collins, Simon & Schuster, Penguin and Verlagsgruppe Georg von Holzbrinck,

The basis for the regulatory concern is the replacement of the traditional wholesale model (where retailers purchase products from publishers and then sell them at whatever price they see fit, even if that meant making a loss) with an agency model (where the publishers set the retail price and the retailer - in this case Apple - takes a commission).

This had the effect of pushing up ebook prices, in some cases above that of the print edition at low-price retailers.

There are suggestion that some of the companies are already trying to avoid a court case by reaching a settlement with the Department of Justice. It remains to be seen whether the others will follow suit, or if they are sufficiently confident of their position to risk the expense, negative publicity and potentially worse outcome of a trial.

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Stephen Withers

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Stephen Withers is one of Australia¹s most experienced IT journalists, having begun his career in the days of 8-bit 'microcomputers'. He covers the gamut from gadgets to enterprise systems. In previous lives he has been an academic, a systems programmer, an IT support manager, and an online services manager. Stephen holds an honours degree in Management Sciences and a PhD in Industrial and Business Studies.

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