In a statement released today, the European Commission has revealed that it is opening formal antitrust proceedings to investigate the possible presence of anti-competitive practices within the ebook industry. The investigation will target a number of international publishers including Harper Collins, Simon & Schuster and Penguin. The Commission will also be investigating whether Apple has helped the publishers engage in anti-competitive practices.
The European Commission has opened formal antitrust proceedings to investigate whether international publishers Hachette Livre, Harper Collins, Simon & Schuster, Penguin and Verlagsgruppe Georg von Holzbrinck have, possibly with the help of Apple, engaged in anti-competitive practices affecting the sale of e-books in the European Economic Area, in breach of EU antitrust rules. [Shortened]
The Commission will examine the ‘agency agreements’ entered into by the publishers — with concerns that they may breach EU antitrust rules that “prohibit cartels and restrictive business practices”. It isn’t yet known for how long the commission will run for.
The Commission will in particular investigate whether these publishing groups and Apple have engaged in illegal agreements or practices that would have the object or the effect of restricting competition in the EU or in the EEA.
[Via The Verge]
Apple’s recently announced subscriptions for content-based iOS apps have caused a stir in the publishing and development community due to the 30% cut the Cupertino company takes off every recurring payment and the impossibility for publishers to insert in their iPhone and iPad applications links to alternative web stores.
The Wall Street Journal reports U.S. and European antitrust enforcers “have begun looking at” Apple’s new subscription policy, and whether it may violate laws that regulate the sell of digital subscriptions in online marketplaces. This renewed interest in Apple’s iTunes payment platform may not evolve into a formal investigation or “action against the company”, the WSJ reports, but it appears that Apple has attracted regulators across the United States and Europe.
A spokeswoman for the European Commission, the European Union’s executive arm, said Thursday that the commission was aware of the new subscription service and was “carefully monitoring the situation.
Apple and representatives of the FTC and Justice Department declined to comment. The new subscription system, officially announced by Apple earlier this week, allows content publishers to set up recurring weekly, monthly or yearly subscriptions in their iOS apps. Users can subscribe with just one tap through their iPhones and iPads and manage subscriptions from their mobile devices and iTunes account, which relies on the same credit card information used to purchase songs, movies, books and apps sold by Apple in its iTunes Store. Several companies have expressed their concerns this week regarding Apple’s 30% commission on every transaction.
Antitrust officials in the U.S. and abroad may be hard-pressed to conclude that Apple’s 30% commission is excessive, antitrust experts said, partly because it will be difficult to determine a benchmark commission rate for digital subscriptions. “The European Commission has been reluctant in the past to second-guess pricing as it is a complex exercise, and the commission does not want to become a price regulator,” said Damien Geradin, a professor of competition law at Tilburg University in the Netherlands.
Last year, the FTC was reportedly looking into Apple’s App Store guidelines that forced developers to create applications for iPhones and iPads using only the provided programming tools, but no formal action was taken afterwards.
Less than a day since Apple unveiled it’s somewhat new subscription rules and unsurprisingly there is already some backlash from publishers and suggestions of possible antitrust investigations. The most prominent content provider that has spoken out so far is Rhapsody, effectively signaling that Apple’s 30% is not economically viable for them after paying music publishers and as a result will not be implementing the new subscription service and policy.
Rhapsody’s president Jon Irwin issued a statement and amongst noting that it would be “economically untenable,” he also noted that they will be “collaborating with our market peers in determining an appropriate legal and business response to this latest development.” This certainly gives the impression of possible legal action if that avenue is open to them and interestingly enough The Wall Street Journal contacted several law professors and reported that Apple’s new policy could potentially “draw antitrust scrutiny”.