The European Commission is investigating Apple and five publishers, Macmillan, Penguin, Hachette Livre, Harper Collins and Simon & Schuster for possible collusion to keep eBook prices high.
The root of the investigation stems from the deal that Apple offers the publishers on eBook pricing. Before Apple offered an eBook store the publishers mainly sold eBooks through Amazon. The deal in place with Amazon at the time made the publishers sell their content to them at a wholesale price and allowed stores such as Amazon’s to price the books as they saw fit. This was often a greatly reduced price compared to the high street prices for the books.
When Apple entered the market they continued with their usual pricing structure of allowing the publishers to choose their own price for content with Apple taking a 30% cut. Obviously the more a book sells for the more both parties get.
What started the investigation though was the publishers then pushing, and then convincing, retailers such as Amazon to adopt a system such as Apple’s.
While Apple has continued with it’s normal revenue sharing model here, it was obviously much more attractive to the publishers and it was their pursuit of the deal with Amazon and the subsequent increase in eBook prices that has brought the heat on.
More as the story develops.
Let us know what you think below. Did you use Amazon for eBooks in the past and have you noticed the prices increasing now through the iBookstore?