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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.






by MacNN Staff

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Comments

  1. testudo

    Joined: Dec 1969

    -1

    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.

  1. charlituna

    Joined: Dec 1969

    +2

    important facts

    no one is holding a gun on anyone to make them sign up. they are free to say no to the ibookstore and sell as they wish.
    Apple does give them pricing control. unlike Amazon wish is no record as setting the condition that they pick the price for ebooks. it might be limited to a particular range but again if they don't like the choices, don't sign up.

  1. Zanziboy

    Joined: Dec 1969

    +1

    Apple Give Publishers MORE Money

    First of all, book and magazine prices are not only higher on the iPad.
    Second, publishers see it as a goldmine as they can provide colour content to readers with enhanced functionality (not available on other eBook readers).

    Since a lot of the content available on the iPad is unique, it would be difficult to fault Apple as it is providing unique content not available on other platforms.

  1. testudo

    Joined: Dec 1969

    -1

    Re: Apple Give Publishers MORE Money


    First of all, book and magazine prices are not only higher on the iPad.


    but.... what? Or did you decide not to continue the 'not only...' portion of your 'sentence'.

    Second, publishers see it as a goldmine as they can provide colour content to readers with enhanced functionality (not available on other eBook readers).

    Although I believe Apple's eBook reader does not provide enhanced functionality either at the moment. it's a simple ebook reader at the moment.

    But let's say it does provide all these great expanded capabilities. And then publisher A wants to sell his new fancy book with enhancements for $30, and everyone goes hysterical because the hardcover is $25 list, $18 in the store, and we all know digital should be a whole lot cheaper, and on and on and on.


    Since a lot of the content available on the iPad is unique, it would be difficult to fault Apple as it is providing unique content not available on other platforms.

    Um, it isn't difficult to fault apple, unless you're just ignoring the point of the article, which was "Apple likes to have a single set price on all their items, which may be considered collusion among publishers in the UK".

    In fact, your title that publishers get MORE money is actually part of the point. Since the concern is that the consumer would be harmed, which is what happens in a collusion case. Since it would be Apple forcing the collusion by insisting on the same terms, it would be, in effect, their 'fault'.

  1. Parky

    Joined: Dec 1969

    0

    The story make no sense!

    If this was the case then Apple have breaking the same rules for music sales in the UK.

  1. JulesLt

    Joined: Dec 1969

    +2

    Music != books

    Parky - they're not using the agency model for music sales - they definitely negotiate with each label separately.

    And this is more a legal thing than anything to do with Apple or publishers.

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