Commission accepts legally binding commitments from Simon & Schuster, Harper Collins, Hachette, Holtzbrinck and Apple for sale of e-books: extracts from the Midday statement by Joaquín ALMUNIA, Vice-President of the EC in charge of Competition
Première transmission: 13/12/2012
Brussels, Belgium - EC/Berlaymont
Fin de production: 13/12/2012
Article 101 of the Treaty on the Functioning of the European Union (TFEU) prohibits cartels and restrictive business practices.
After unannounced inspections in March 2011 (see MEMO/11/126), the Commission opened antitrust proceedings in December 2011 against five international publishers (Simon & Schuster, Harper Collins, Hachette, Holtzbrinck, and Penguin) and Apple (see IP/11/1509). Following discussions on possible commitments between all publishers but Penguin as well as Apple, the Commission informed in August 2012 the four publishers and Apple of its preliminary competition concerns. In September 2012, the Commission consulted stakeholders on draft commitments offered by these four publishers and Apple to remedy the Commission's preliminary concerns (see IP/12/986).
The Commission has worked closely with the US Department of Justice (DOJ) in this case in order to seek a global solution to the identified horizontal concerns. On this basis, the DOJ settled the case with Simon & Schuster, Hachette and Harper Collins. It also sued Apple, Holtzbrinck/Macmillan and Pearson/Penguin. That litigation is on-going.
The Commission's decision is based on Article 9 of the EU's Antitrust Regulation (Regulation 1/2003). It makes the commitments offered by Simon & Schuster, Harper Collins, Hachette, Holtzbrinck and Apple, revised in light of the market test results, legally binding and ends the Commission's proceedings against these companies. It does not conclude on whether EU antitrust rules have been infringed but legally binds the companies concerned to respect the commitments they have offered. If a company were to break commitments made binding on them, the Commission can impose a fine of up to 10% of its annual worldwide turnover, without having to find an infringement of the antitrust rules.
A non-confidential version of the decision will be available on the competition website, in the Commission's public case register under the case number 39847.
Only the original language version is authentic and it prevails in the event of its differing from the translated versions.
||Arrival of Joaquin Almunia, Vice President in charge of Competition to the press conference room
||SOUNDBITE (in English) by Joaquin Almunia, Vice President in charge of Competition: the Commission has just accepted the commitments offered by Apple and four international publishers group in relation of suspected infringement on the market for e-books in the EU. The Commission decision puts and end to the suspected consultancy practices and that raising retail prizes for the E-books into the European Economic area. This market, as it obvious is nascent in Europe and extremely dynamic so that quick and decisive action was call for. The publishers concerns are Simon & Schuster, Harper Collins, Hachette, Holtzbrinck.
||SOUNDBITE (in English) by Joaquin Almunia: Apple and the four publishers shared the goal of limiting retail price competition. To achieve this goal they agree en January 2010 to jointly switch the sale of e-books from a whole sale model where the retailer is free o set the price to an agency model where the prices of the books are chosen by the publishers themselves. This switch was done on the global basis. Our concern focused on this joint switch to the agency model on the same key pricing terms. In particular the agency contracts with Apple included what can be called most favoured customer clause for retail prices.
||SOUNDBITE (in English) by Joaquin Almunia: This commitment means removing immediately the results of the collusion and restoring normal competitive conditions. This route is the quickest way to bring competition back to this market to the benefit of all consumers who buy e-books in Europe