Apple, Book Publishers Investigated By EU Over eBook Pricing Issue

Apple Inc. (NASDAQ:AAPL) has become the center of an investigation initiated by the European Union, over the excessive pricing of eBooks and magazines in the European continent.

Apple along with five publishers, which include Simon & Schuster, Harper Collins and Penguin are included in the investigation that seeks to find settle concerns over the companies engaging in anti-competitive practices that have affected other competitors in the European Economic zone.

The European business practices watchdog will decide whether these publishing groups along with Apple have broken any laws by agreeing to illegal anti competitive agreements or practices. Investigation will focus on giving fair competition to other players in the ebook space and will closely check If any of the companies have restricted competition in the European union.

The announcement was made on Tuesday by the executive arm of the European Union. The statement also said that the Union will also be examining the terms and character of the agreements between the different agencies and also between retailers over the sale of ebooks.

This case is not the first of such kind against Apple and ebooks. A similar case was filed earlier this year, accusing Apple and other publishers of engaging in illegal pricing or agency model pricing, where publishers set fixed inflated prices that customer had to pay. This is against the age old practice where the publisher seta a retail price and the retailer offers these books at the sales price. According to the plaintiffs, this model hurt other ebook companies such as Amazon, thereby limiting overall competition in the marketplace.

This lawsuit came about an year after an ex-attorney general of Connecticut, Richard Blumenthal launched an investigation into Apple and Amazon over pricing concerns. He alleged that the deals that these two companies agreed with the publishers are against competition ethics and need to be stopped. In a statement, Blumenthal said that the agreements signed by these retailers with publishers have already lead to uniformity in prices, which has lead to diminishing of options for a buyer.

However, this Connecticut investigation was brushed aside after Blumenthal stepped down from the post of attorney general.  It is uncertain what led to the end of the investigation, just a lack of interest from the Connecticut authorities is being termed as the reason.

The European Union has however completed all its prior investigations into the matter. On March the Union carried out unannounced inspections of the ebook businesses of at the sited of publisher sites. The details of these raids were not unveiled by the union.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.