EU investigates possible cartel in sale of e-books

READERS may be paying double what an ebook really costs every time they download one online, due to an arrangement between five of the world’s major publishers and Apple.

Following a raid on the offices of several companies in the e-book business in a number of EU countries, the European Commission is investigating whether the five and Apple are operating a cartel to keep prices artificially high.

Despite the fact that a downloaded book costs publishers very little compared to the cost of printing and distributing a paper copy, most of them are sold for the same price and in some instances cost even more.

Readers such as Apple’s iPad and Amazon’s Kindle are expected to do a roaring trade this Christmas as downloaded books increase in popularity, although sales of e-books in Ireland are still lagging behind those of many other countries.

The commission said it was investigating whether agreements between the companies is restricting competition in the EU and agreements between the publishers and retailers on the sale of e-books.

They believe that booksellers have been told they cannot sell an e-book for much less than the printed version and that the deal with Apple means that the publishers insist on similar terms with other companies, such as Amazon, which kills competition.

“The Commission has concerns that these practices may breach EU antitrust rules that prohibit cartels and restrictive business practices,” Amelia Torres, commission spokesperson said.

The companies being investigated are Apple, one of the world’s wealthiest companies; Hachette Livre of French Lagardere Publishing; Harper Collins, owned by Murdock’s News Corp in the US; Simon & Schuster owned by CBS Corp, US; Penguin of the Pearson Group, Britain, and Verlagsgruppe Georg von Holzbrinck, owner of Macmillan, Germany.

The British Office of Fair Trading said that it had received a lot of complaints about the cost of e-books but has handed over their investigation to the commission.

An investigation is also under way in the US on foot of similar complaints about what appears to be an unexplained jump in the cost of e-books but which many suspect is linked to the cartel arrangement.