Blog Post

European Commission reaches ebook deal with Apple and publishers

The European Commission has officially reached a settlement with Apple (s AAPL) and four publishers — Simon & Schuster (s CBS), HarperCollins (s NWS), Hachette and Macmillan’s parent company, Holtzbrinck — on ebook pricing.

The U.S. Department of Justice reached a settlement with HarperCollins, Hachette and Simon & Schuster and it was approved in September. Apple and Holtzbrinck are settling in Europe, but not in the United States. Penguin is not settling in either region, but Joaquin Almunia, VP of the EC’s antitrust unit, said in a statement that the EC is “engaged in constructive discussions” with Penguin’s parent company Pearson “in order to achieve a possible settlement that would allow the Commission to close the proceedings against them.”

In the EU settlement, Apple and the settling publishers are subject to the three same requirements that HarperCollins, Hachette and Simon & Schuster agreed to in the U.S.:

“Apple and the four publishers will terminate the current agency agreements that are the result of the collusive conduct;

For a period of two years, the publishers cannot, subject to certain conditions, hamper ebook retailers from setting their own prices for ebooks or, from offering discounts and promotions;

For a period of five years neither the four publishers nor Apple can conclude agreements for ebooks with retail-price Most Favoured Customer clauses.”

“This route is the quickest way to bring competition back to this market, to the benefit of all consumers who buy ebooks in Europe,” the statement concludes — although, as Publishers Lunch pointed out recently, the provisions of the settlement really only apply to the ebook market in the UK, since other European countries, including Germany and France, have strict fixed price book laws that prevent discounting in the first place.