U.K. Trade Regulator Launching Ebook Price Investigation

Posted on February 4, 2011

The Office of Fair Trading, which is the U.K. trade regulator, announced that it is launching a probe of ebook prices in Great Britain. There have been many complaints over the uniform pricing of digital books which may violate antitrust rules. The United States launched a similar investigation six months ago.

It all started when publishers didn't like the model Amazon.com was using to sell ebooks. Publishers like the agency model, in which they set the price. But regulators say that stifles competition and makes consumers pay higher prices. The Wall Street Journal reports:

The investigation comes after months of haggling between book publishers and online retailers over pricing for electronic books, sparked by the rise of devices such as Apple Inc.'s iPad and Amazon.com Inc.'s Kindle. Book publishers, having watched music companies falter as Internet distribution cannibalized in-store sales, have moved quickly to protect their business.
That in part has led to the "agency pricing" model, the same system that has come under antitrust scrutiny by attorneys general in Connecticut and Texas.

Before the change, Amazon.com sold ebooks at a deep discount. Now most ebooks on the site have this notice: "this price was set by the publisher."