The US Department of Justice (DoJ) and the European Commission (the Commission) have opened separate investigations into the sale of e-books in the United States and the European Union respectively.
In the United States, a civil antitrust lawsuit was filed against Apple, Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster on the basis that they worked together to eliminate competition among stores selling e-books in response to a reduction in prices. This ultimately increased prices for consumers. The DoJ alleges that the conspiracy began in the summer of 2009, when CEOs from the publishing companies started to meet privately about once per quarter to discuss ebook retailing practices.
In April, the DoJ announced that it had settled with Hachette, HarperCollins and Simon & Schuster, but would continue to litigate against the three remaining plaintiffs. Apple has vigorously denied the charges, claiming that its digital bookstore (introduced in 2010) “fostered innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry”.
In the European Union, the Commission launched an investigation against the same companies to ascertain whether they engaged in restrictive agreements or practices under the meaning of Article 101 of the Treaty on the Functioning of the European Union. The Commission also stated that it would examine the character and terms of certain agency agreements. In March, Commission officials conducted unannounced inspections of the companies’ premises.
In April, the Commission announced that it had received proposals of possible commitments from Apple and four of the five publishers, and intends to test the proposals with third parties in order to decide whether they would be sufficient to preserve competition.
The DoJ and the Commission have worked together closely throughout the investigations and Competition Commissioner Joaquin Almunia praised the “very close and productive cooperation [that] has benefitted the investigations on both sides of the Atlantic”.
In the UK, the Office of Fair Trading (OFT) had since February 2011 been conducting its own investigation in parallel with that of the Commission. However, the OFT closed its investigation in December 2011 on the grounds of its administrative priorities. Following discussions with the Commission, the OFT considered that the Commission was the best placed to arrive at a comprehensive resolution of the matter, although it continued to co-operate closely with the Commission in order to help secure the best outcome for UK consumers.