Ebook Publishers Facing Antitrust Investigation

The ebook industry is coming under heavy scrutiny from US and European officials investigating antitrust allegations. The justice department, states attorney general and EU officials are seeing whether or not several publishers fixed prices when they inked a deal with Apple before the launch of the iBookstore.

Central to the investigation is the “agency model.” This allows publishers to set ebook prices while giving Apple or Amazon (for example) a percentage of the sale. The agency model prevents ebook retailers from setting prices too low, thus devaluing the ebook (or so publishers say).

According to Reuters, the investigation is casting a pretty wide net:

In Brussels, the European Commission said Tuesday that it had opened an investigation into whether e-book publishers owned by Lagardere, Pearson Plc, News Corp and two other firms fixed prices with Apple Inc, blocking rivals and hurting consumers.

It identified the publishers as French media-to-aerospace group Lagardere’s Hachette Livre unit, News Corp’s Harper Collins, CBS Corp’s Simon & Schuster, Pearson’s Penguin and Verlagsgruppe Georg von Holzbrinck, which owns Macmillan in Germany.

Publishers are still struggling to find an ebook pricing groove. If it’s found that they have been price fixing, the hammer will come down pretty hard on them. Apple might also get caught up in the scandal if they are found to be complicit.

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Read More: Apple, eBooks, Publishing News