EU watchdog launches antitrust probe of Apple, ebook publishers

Computerworld - European Union (EU) antitrust regulators today launched a formal investigation into how Apple and several major publishers priced electronic books.

The European Commission said it was targeting five book publishers -- France's Hachette Livre, German-owned Macmillan, U.K. publisher Penguin, and U.S.-based Harper Collins and Simon & Schuster -- in a price-fixing probe.

Apple, which sells e-books through its iBooks app to owners of its iPhone, iPad and iPod Touch, is also under investigation. The Cupertino, Calif. company sells ebooks via iBooks in the U.S. as well.

In a news conference after the probe was announced, a Commission spokeswoman, reiterated the reason for the investigation.

"We will conduct an investigation in order to determine whether these publishers and Apple have entered into agreements and practices to the set the ebook prices in Europe," she said.

Antitrust officials suspect that the book publishers and Apple violated EU laws by entering into a cartel, the term for a multi-corporation agreement that fixes prices and production levels.

The Commission spokeswoman said the agency has put a high priority on the investigation, "because it is an important issue for consumers."

The EU has not set a timeline for concluding the inquiry into ebook practices by Apple and the publishers, but if history is any indication, the case could linger for years. That's assuming the Commission eventually finds that EU laws were broken, as the defendants would have opportunities to respond and an oral hearing would have to take place.

Apple has given in to EU pressure previously. In 2008, the company reduced prices of iTunes music downloads in the U.K. in a deal that saw the Commission drop its probe into Apple's practices.

In the U.S., Apple faces a potential class-action lawsuit filed in August 2011 that accuses the company and the same five publishers named by the EU of ebook price fixing.

"The lawsuit alleges that the 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," said the firm behind the lawsuit, Seattle-based Hagens Berman, in a statement at the time.

The lawsuit is currently in its opening stages, and a trial date has not yet been set by a California federal court.

Apple did not immediately reply to a request for comment on the Commission's move.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His e-mail address is gkeizer@computerworld.com.

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