EU could force Apple and ebook publishers to slash prices

Cheaper ebooks could be on the horizon as Apple and major publishers appear to be caving in under pressure from the European Commission.

European Commissioner for Competition, Joaquin Almunia, said that in order to avoid a costly anti-trust investigation, Apple and four publishers, "are making proposals to reach an early resolution of the case."

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Although no precise details were confirmed, it is believed it would include a two-year ban on using the agency pricing model. This model pushes up the price of ebooks because retailers such as Amazon can't sell them at a lower price than Apple offers.

Concerns that the price of ebooks were fixed under an agreement between Apple and publishers, Harper Collins, Penguin, Macmillan, Simon & Schuster and Hachette Livre has led to investigations in the US, UK and Europe. The UK Office of Fair Trading (OFT) began looking at the issue at the beginning of 2011.

This was shut down when the European Commission launched its own investigation last December with the OFT handing over its findings. After being fined by the US Department of Justice, Apple, Harper Collins, Simon & Shuster and Macmillan's German owner are now making moves towards addressing the European Commission's concerns.

Mr Alumnia said: "In the context of its antitrust investigation into the distribution of e-books, the European Commission has received proposals of possible commitments from Apple and four international publishers, Simon & Schuster, Harper Collins, Hachette Livre and Verlagsgruppe Georg von Holtzbrinck (the owner of Macmillans).

"In parallel, three of these publishers - Simon & Schuster, Harper Collins and Hachette - have reached a settlement with the US Department of Justice.

"I welcome the fact that these five companies are making proposals to reach an early resolution of the case, so promptly after we opened proceedings in December 2011.

"We are currently engaged in fruitful discussions with them, without prejudice to the outcome of these talks. We will assess any final proposals of commitments and we will test them with third parties in order to check whether they are sufficient to preserve competition for the benefit of consumers in this fast-growing market.

"I am happy that the very close and productive cooperation between the DOJ and the Commission has benefitted the investigations on both sides of the Atlantic."