Four of the publishers in the Europe’s antitrust ebooks price-fixing probe, along with Apple, have offered to scrap their agency model in Europe and allow retailers to set any price they want for ebooks.
The offer, if accepted, would hold good for two years. The parties have also offered to suspend "most favoured nation" clauses for five years.
The publishers - Macmillan, Simon & Schuster, HarperCollins, the Hachette Book Group – made the offer last month, but it’s been disclosed by the European Commission today.
The publishers and Apple continue to dispute the Commission’s finding from August that they acted against the public interest. It stems from Apple’s agreement with publishers to shift from wholesale pricing to an agency model in which the publishers set the retail price, and the retailer takes a percentage cut.
The agency model is not, in itself, illegal, and smaller publishers who were not identified as colluding with Apple are free to continue to use it to price their books.
While the alleged price collusion is bad, monopolies are arguably worse.
Publishing industry supporters argue that encouraging price-cutting comes at a steep cost to consumers – handing Amazon a retail monopoly and destroying a publisher’s ability to negotiate any kind of deals in the future. Amazon is free to give away books at cost and make up margins on other products.
A familiar refrain from Eurocrats is the threat to European culture from rapacious American corporations. It is curious to hear the same Eurocrats ease the pauperisation of European authors. With Amazon's aggressive moves into publishing itself, authors may ultimately have to forgo cash payment, and settle for two of Jeff Bezos’ magic beans.
In the United States, MacMillan Penguin and Apple are fighting back against the antitrust department, and a trial is likely next year.
More details are in this four page document (pdf) interested parties have a month to comment on the proposals. ®