Recently, the European Commission reached an agreement with book publisher Penguin resulting in the end of an antitrust probe against the company.
The EU’s legislative arm approved the conditions which dictate that Penguin won’t make any agreements that would allow it, and not a retailer, to set prices on eBook titles.
Consequently, this agreement brings to an end the purported “most favored nation” pricing agreement that Penguin had with Apple, which allowed the publishers to set content pricing as long as it didn’t sell said content to another retailer for less.
In the past, major book publishers and Apple had agreed to an so-called “agency model” of pricing. This represented a departure from the “wholesale model” where book sellers like Amazon were allowed to resell e-books at or below cost.
Not surprisingly, Apple’s eBooks antics subjected the company to intense pressure and scrutiny in both the U.S. and in Europe.
Apple would go on to fight an antitrust suit from the U.S. Department of Justice only to lose that case. A judge found that Apple had conspired with book publishers to raise the price of e-books.
Although the iDevice maker has appealed the decision, if the present ruling stands, Apple could be compelled to pay nearly $500 million in damages.