Talks are being held to resolve the price row between US and European publishers with respect to the iBooks platform. The matter is gaining heat as three international publishers are interested in settling the issue. Apple, which has become yet another target of investigation along with two other publishers is reluctant to accept the demands proposed by antitrust authorities in the US and Europe. The situation remains tense as the Department of Justice inches closer settling the issue through an antitrust lawsuit. Although most of the settlement terms haven’t been finalized, rumours suggest that the pricing could have unnecessary consequences in the ever growing ebook market. In case a settlement is finalized, Apple may have to discontinue most contracts it signed with publishers back in 2010, when the first generation iPad was introduced.
Consumers can expect the prices of most bestsellers to drop in case these contracts are discontinued. However, the number of companies selling these books will drastically reduce thus making it difficult to purchase a copy. In the scenario that the current pricing arrangements are dropped, Amazon is expected to take advantage of this situation by lowering the price of electronic books, thus increasing pressure on its rival Barnes & Noble. Apple will also try and match this move adopted by Amazon and would end up losing a sizable amount per book. This would in turn trigger the exit of Apple from the ebook market.
Last month, the Wall Street Journal reported that the Department of Justice had warned Apple and five other companies regarding illegally raising the price of ebooks. Thus, an antitrust lawsuit is imminent unless all parties are willing to discontinue their contracts and bring down the prices of ebooks. Even the European Commission raised concerns about the issue and has been working in tandem with the Justice Department, conducting investigations in order to reach an agreement on the issue.
Publishers which are currently under the scanner are CBS Corporation’s Simon & Schuster, HarperCollins Publishers and Lagardere SCA’s Hachette Book group. Apple and two other publishers under the scanner of the investigation; Pearson PLC’s Penguin Group and Macmillan viz. a unit of Verlagsgruppe George von Holtzbrinck GmBH, have all indicated that they are not inclined towards reaching a settlement. The companies with the Department of Justice on the other hand, have refused to comment as the idea of an antitrust lawsuit seems the only way to settle this matter.
