OFT investigates eBook prices

The Office of Fair Trading (OFT) is launching a probe into eBook prices, amid reports that publishers are setting the prices.

The OFT has refused to confirm exactly what the investigation involves, issuing a statement that merely explains it has “opened an investigation into whether arrangements that certain publishers have put in place with some retailers for the sale of eBooks may breach competition rules”.

However, a report in the Wall Street Journal claims the probe is focused on the so-called “agency pricing model”, where publishers rather than retailers set the price of eBooks.

Apple reportedly urged publishers to adopt the agency model ahead of the launch of the iPad, which includes its own eBook store. Retailers make a set percentage of each sale under the scheme.

However, the 1998 Competition Act “prohibits agreements, practices and conduct that may have a damaging effect on competition in the UK”.

British retailers have been free to set the prices of books since the late 1990s and the collapse of the Net Book Agreement.

The OFT states that its investigation is at an early stage and that “it should not be assumed that the parties involved have breached competition law”.

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