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UK Joins US in E-book Pricing Investigation

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Feb 14 – Feb 20, 2011 Edition UK Joins US in E-book Pricing Investigation

AUTHORLINK NEWS/February 14, 2010—The Office of Fair Trading, which regulates trade in the UK earlier this month launched an investigation into anti-trust complaints over digital-book pricing. The move comes about six months after US authorities launched their own probe.

After receiving a number of complaints of possible collusion on retail book prices, The Office of Fair Trading said it is exploring whether pricing arrangements between book publishers and digital retailers are a breach of antitrust rules.

Spurred by competition from e-book devices such as Apple’s iPad and Amazon’s Kindle, Publishers have moved quickly to protect their business, leading to the so-called “agency model” which lets the publishers—not retailers–set the price for their books. Online retailers then earn a set percentage of each sale under the new arrangement.

The Wall Street Journal last August quoted then Connecticut Attorney general Richard Blumenthal as saying “ such agreements result in uniform prices for most of the popular e-books—potentially depriving consumers of competitive prices.’ Texas and Connecticut launched investigations after five publishers adopted the agency model at the urging of Apple.

In the UK, publishers following the agency pricing model include Penguin, Hachette, News Corp’s HarperCollins and CBS Corp’s Simon & Schuster.

The UK regulators said the investigation is in the early stages and that it should not be assumed that the parties involved have breached competition law.