Tech, Autos, & Gear in Layman's Terms Since 2006

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March 6, 2011 • eBooks

GD Quickie: European Union Investigating eBook Pricing

It’s a safe bet that if you aren’t a publisher you’re not happy with the agency model. It did more than just change the nature of publisher/seller relations; it actively changed how booksellers could sell ebooks. Suddenly everyone had to fall in line with the exact same prices, and discounts were banned. Needless to say, this raised some regulatory eyebrows, and according to the Guardian UK, there’s been some old-fashioned office raiding over it!

According to the article:

The European commission has launched morning raids on several publishing houses suspected of fixing the prices of ebooks, as a huge battle for the future of the sector is fought within the publishing and technology industries.

Officials in Brussels have refused to say how many or which publishers were targeted although a spokesman for Hachette, famed for its dictionaries, confirmed that it was among them. The inquiry is understood to be focused on French companies.

In a statement, the commission said that it “has reason to believe that the companies concerned may have violated EU anti-trust rules that prohibit cartels and other restrictive business practices”.

Hachette is one of the “agency five”, also known as the group of publishers who wholeheartedly embraced agency pricing as the solution to all their woes. The other four are Macmillan, Simon & Schuster, HarperCollins and Penguin, though the Guardian doesn’t mention if their European offices were also raided. Even better, though, is the logic behind why the agency model ISN’T problematic:

Novelist Nick Harkaway, author of The Gone-Away World, agreed. “If the agency model is really a problem under EU law, the law is the problem, not the industry,” he said. “Otherwise you fall back into a situation where Amazon controls the market. This is not to demonise Amazon, but they are a massive portion of the physical market and if their wholesale model also dominates the digital book market, it becomes much harder to negotiate with them.”

This makes absolutely no sense. So to prevent Amazon from dominating the market, there should be widespread price-fixing? There’s a universe of difference between “We need better wholesale terms” and “We must keep Amazon/B&N/Kobo/Joe’s eBook Shack from discounting in any way, because offering a discount might make them popular”. One is a way of trying to redefine a business in the midst of a major cultural and technological shift. The other has been illegal since trade laws began.

It remains to be seen if this spurs the FTC into action as well, but given that this policy exists across countries, it’s not unlikely…stay tuned for more as this develops.

Via The Guardian UK

3 Responses to " GD Quickie: European Union Investigating eBook Pricing "

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