updated 12:13 pm EDT, Thu July 25, 2013
Commitments 'are now legally binding'
The European Commission has accepted a proposal from British publisher Penguin -- and German media conglomerate Bertelsmann -- to toss e-book deals it signed with Apple that are in violation of European competition regulations, according to a press release. "After our decision of December 2012, the commitments are now legally binding on Apple and all five publishers including Penguin, restoring a competitive environment in the market for e-books," states the EC's Competition commissioner, Joaquín Almunia.
Apple and the five publishers are accused of violating antitrust regulations when they signed deals for the iBookstore. With Apple's encouragement, the publishers switched to an agency model, a move that allowed them to dictate prices instead of vendors. More controversially they agreed to "most favored nation" clauses, which ensured that the iBookstore would always have the lowest price on any given e-book. Together the changes appear to have inflated average prices in the e-book industry.
Recently the US government ruled against Apple in the same matter. The company was accused of conspiring with publishers to undermine Amazon, which until the iBookstore's launch was typically selling Kindle titles for $10. The publishers settled before they could be brought to trial, leaving Apple alone at court. Apple has promised to appeal the verdict.