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Apple and four publishers have offered to overhaul pricing models for digital books to allay European Union concerns that they blocked competition, reports "Bloomberg" (http://macte.ch/Bdi8d).
The publishers won’t limit retailers’ discounts for two years under details of proposals by Apple, CBS Corp.’s Simon & Schuster, News Corp. (NWSA)’s HarperCollins, Verlagsgruppe Georg von Holtzbrinck GmbH’s Macmillan unit and Lagardere SCA (MMB)’s Hachette Livre published today in the EU’s Official Journal. The European Commission said they first made an offer to settle its investigation in April, notes "Bloomberg."
Facing EU pressure, Apple has promised to terminate so- called agency agreements with the four companies and Pearson, it said in its proposal. Under Apple’s pricing strategy, the iPad maker takes a fixed percentage of e-book prices set by the publishers.
Apple has been sued in Europe, the U.S. and Canada for collaborating with publishers to "fix" ebook prices. The brouhaha centers on Apple's move to change the way that publishers charged for e-books as it prepared to introduce its first iPad in 2010. Traditionally, publishers sold books to retailers for roughly half of the recommended cover price. Under that "wholesale model," booksellers were then free to offer those books to customers for less than the cover price if they wished.
Apple suggested moving to an "agency model," under which the publishers would set the price of the book and Apple would take a 30% cut. However, Apple also insisted that publishers couldn't let rival retailers sell the same book at a lower price.