EU raids e-book publishers
Thursday, 03 March 2011

European Union antitrust authorities have "raided" several publishers in Europe, seeking evidence that they had acted illegally in pricing e-books.

IProgrammer has consistently argued that e-books should be retailed for less than the price of their paper counterparts but there are plenty of examples where e-books sell for more than the equivalent hardback. let alone the paperback editions.

Now European Regulators want to know why and have "raided" several publishing houses, including Albin Michel and Hachette Livre. The European Commission said its agents had "reason to believe" that publishers "may have violated EU antitrust rules that prohibit cartels and other restrictive business practices".

This EU action echoes ongoing investigations by authorities in the U.K., California and Texas into the arrangements that publishers make to sell digital book and adds new weight in that the EU regulator is widely considered the world's most powerful, and it has the power to levy giant fines against companies that break its rules.

The crux of the issue is whether consumers are disadvantaged by the so-called "agency pricing model" in which publishers maintain control over the prices of e-books throughout the supply chain and simply pay the retailer a commission, typically 30 percent. This differs from the standard bookselling model, in which publishers sell books wholesale to retailers, which then set the prices, and can choose which books to discount.


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The model, which is the one required by Apple for selling via its app store, has been adopted by major publishers including Hachette, HarperCollins, Macmillian and most recently Random House who made their announcement at the beginning of this week the day before the launch of the second-generation iPad.

You might think that simple economic pressures would be enough to set the price of an e-book but this doesn't seem to be the case. Now with Apple getting involved in the whole issue things are even more difficult to see clearly - but it must be obvious to anyone that e-books should be cheaper than their paper equivalents and if they are not then the market is not functioning freely or efficiently.


Related articles:

Pricing ebooks

A book's worth...

 

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