Europn Commission Accepts Proposal by Penguin to End E-Book Pricing Dl

Europn regulators have accepted a promise by the British media group Penguin and German media conglomerate Bertelsmann to scrap dls on electronic books, also known as "e-books", with which were found to be in brch of Europn competition policy.

Penguin was not the only company in the firing line. Back in December 2012, the Commission criticized the practices of four large publishers, Simon & Schuster, Hachette, Holtzbrinck and Harper Collins, of working with via an "acy model" whereby the publishers set the retail price and the distributor takes a fee (30% in 's case).

Under the "wholesale model" in place before entered the market, publishers sell their goods to distributors for fixed prices and allow the distributors decide the final retail prices. The acy model came under fire for causing a rise in retail prices of e-books compared to the wholesale model championed by Amazon and Google. Under 's "most favored nation" contract clauses, it was allowed to match lower pricing by other retailers, and with the support of the major publishers effectively forced the entire industry to switch to the acy model, raising antitrust issues in a of regions.


Joaquín Almunia, the Europn Commissioner for Competition, said in apress relse from this morning:
After our decision of December 2012, the commitments are now legally binding on and all five publishers including Penguin, restoring a competitive environment in the market for e-books.The development comes after a district judge in the United States, Denise Cote, said that played a "central role"in helping to fix the price of e-books.Court documents showthat , along with five other publishers, "conspired to raise, fix, and stabilize the retail price for newly relsed and bestselling trade e-books in violation of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1 ("Sherman Act") and various state laws". has stdfastly claimed that it has done nothing wrong and will appl the decision.

The Europn Commission is well-known for imposing large fines on companies who fail to follow practices designed to protect consumers against anti-competitive behavior. In 2009, was handeda record-brking €1.06 billion ($1.45 billion) fine for the abuse of its dominance in the computer chip market and in 2004, was fined€497 million (around $795 million) for offering Media Player standard with its operating systems as well as providing no information about competing network software to interact with desktops and servers.