E-book prices are sometimes mysteriously high-they can cost as much or even more than their print equivalents for popular titles. And now European regulators want to know why. Antitrust authorities at the EU raided several publishers today. Although they didn’t name the companies they went after, the WSJ is reporting that two French publishers-Albin Michel and Hachette Livre-experienced raids. Meanwhile, according to The Telegraph, Penguin and HarperCollins were not raided, but Harry Potter publisher Bloomsbury refused to say whether it had been raided.
In the UK, authorities have already opened a similar investigation.
At issue is whether the “agency” model of pricing hurts consumers. Under that model, publishers maintain control over the prices of e-books throughout the supply chain and simply pay the retailer a commission, typically 30 percent. The agency model essentially eliminates book discounts. That’s different than the more standard bookselling model, in which publishers sell books wholesale to retailers, which then set the prices, and can choose which books to discount.
Amazon (NSDQ: AMZN) has made it clear that it’s opposed to the agency model for e-books. Apple (NSDQ: AAPL), on the other hand, insists upon the model as a condition of entry to its iBookstore. Indeed, Random House just adopted the model for its e-books, thereby gaining entry to Apple’s iBookstore right before the launch of the iPad 2.