Apple's iBookstore risks breaking UK competition laws
updated 01:05 pm EDT, Fri May 14, 2010
Publishers may pursue different deals
Apple may have to change how it treats publishers in order to keep the iBookstore legal in the United Kingdom, a report claims. In the US Apple relies on an agency model, but lawyers and industry sources are said to warn that it could violate UK competition laws. "If [Apple] are imposing their own terms and conditions, their own retail prices, effectively you have collusion among publishers because they are all being signed up on the same terms," notes lawyer Serena Hedley-Dent. "Publishers need to make sure if they are signing an agency agreement they are in control of it, and setting their own terms and prices."
Apple is notorious for pushing iTunes Store prices as low as possible, using them lure people to hardware, where the company makes most of its real profit. The company has relented to some demands for higher prices, however, particularly in terms of e-books, which are in some cases several dollars more expensive at the iBookstore than originally expected.
One industry source indicates that publishers are currently finalizing deals for the UK iBookstore, and consulting legal advice on how to work within UK and European Union law. Apple may potentially have to abandon the agency model. "The situation is very different in the UK, where Amazon does not have the same hold over e-book sales and where there are not such worries over e-book prices, so it may not prove to be right," the source says. "We have to make sure that the way we sell e-books is appropriate to each individual territory."
The person warns that it may be an "enormous challenge" to have publisher deals ready before May 28th, although Apple is said to be working hard to attract partners. Several countries should see iBookstores open on that date, the same day the iPad first becomes available outside the US.
Forum Regular
Joined: Aug 2001
pricing
Apple is notorious for pushing iTunes Store prices as low as possible, using them lure people to hardware, where the company makes most of its real profit. The company has relented to some demands for higher prices, however, particularly in terms of e-books, which are in some cases several dollars more expensive at the iBookstore than at rivals like Amazon and Kobo.
They didn't 'relent to demands' to the publishers. They offered higher prices to the publishers as a way to try to woo them farther from Amazon and other ebook sellers. But if the iPad causes the iTMS to become the predominant ebook seller (like it is currently with digital music), for sure you will see Apple then price to lower prices.
And I'm sure those on these boards will proclaim apple is again looking out for the consumer, all the time pretending they never proclaimed how Apple was all about being fair to the authors/publishers when they signed their earlier deals with the higher prices.