European Commission investigates companies active in the e-book publishing sector

On 6 December 2011 the European Commission opened an investigation into alleged anticompetitive practices by five EU and US publishers, possibly with the help of Apple, in relation to the sale of e-books in the European Economic Area in breach of Article 101 of the Treaty on the Functioning of the European Union, which encompasses the EU antitrust rules prohibiting cartels and restrictive business practices.

Besides possible anticompetitive agreements between the publishers and Apple, the Commission is also investigating agency agreements between the publishers and retailers for the sale of e-books.

In March 2011, the Commission carried out unannounced inspections at the premises of several companies active in the e-book publishing sector. At the same time, the UK Office of Fair Trading (“OFT”) also investigated the same practices in a parallel investigation. The OFT has since closed this investigation, but it will continue to work closely with the Commission. In a press release, the OFT stated that it “may reconsider its decision, in consultation with the European Commission, if it has reasonable grounds to suspect that there is an infringement of competition law, which may have an impact on UK consumers.”

A class action filed in the U.S. in August 2011 alleges that the same publishers and Apple colluded to increase prices for popular e-book titles to boost profits and force e-book rival Amazon to abandon its pro-consumer discount pricing; more specifically, the action alleges that the defendants colluded to force Amazon to abandon its discount pricing and adhere to a new agency model in which publishers set prices. The U.S. Department of Justice appears to have joined the European Commission in investigating the pricing practices of digital books for e-readers, but details of the probe have not been disclosed. [Gabriele Accardo]