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Thursday, July 25, 2013
 Europe Accepts Commitments From Penguin in e-books Market
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Message Text: The European Commission has adopted a decision that renders legally binding the commitments offered by British media group Pearson's Penguin unit, in the context of the Commission's investigation regarding the sale of e-books in the European Economic Area (EEA).

The Commission had concerns that Penguin, together with four other publishers - Simon & Schuster (CBS Corp., USA), HarperCollins (News Corp., USA), Hachette Livre (Lagardre Publishing, France), Verlagsgruppe Georg von Holtzbrinck (Germany; owner of inter alia Macmillan) - and Apple may have contrived to limit retail price competition for e-books in the EEA, in breach of EU antitrust rules.

To address these concerns, Penguin offered the same commitments as those proposed by the other four publishers and made legally binding on those companies in December 2012. They include, in particular, the termination of on- going agency agreements and the exclusion of certain most-favoured-nation (MFN) clauses in Penguin's agency agreements during the next five years. Penguin also offered to give retailers freedom to discount e-books, subject to certain conditions, during two years.

The European regulators have concluded that, taken together, the commitments offered by Penguin, complementing those made binding by the Commission on the other four publishers and Apple, "will contribute to creating a favourable environment for a reset of the competitive conditions in the e-books market during a sufficient period of time." First, Penguin will terminate its relevant agency agreements with retailers (in addition to the agency agreements with Apple which have to be terminated under the commitments made binding on Apple in December 2012). Second, the two year "cooling-off" period during which retailers will be able to discount e-books will now also apply to all Penguin e-book titles. Third, the price MFN ban will apply to agreements renegotiated between Penguin and any other retailer (not only to agreements renegotiated between Penguin and Apple).
 
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