Apple agrees to back down on ebook pricing...

APPLE and a group of major publishers have backed down over the pricing of ebooks, in a move that could see Amazon set lower prices.

The four publishers – Simon & Schuster, HarperCollins, Hachette Livre and Macmillan – as well as the technology giant reached an agreement with European authorities following a competition investigation.

The companies agreed to change the way they distributed ebooks, moving from a model in which the publishers set the prices to a system that allows retailers to discount.

This is a victory for Amazon, which is looking to cut ebook prices in order to encourage uptake of its Kindle ereader. In 2010, major publishers teamed up to force the web retailer to sell Kindle books at prices they determined, fearing ebooks would affect more profitable physical sales.

The European Commission had accused the companies of colluding over the pricing strategy. Late Apple boss Steve Jobs is believed to have negotiated a deal with publishers that kept the cost of ebooks artificially high.

“While each separate publisher and each retailer of ebooks are free to choose the type of business relationship they prefer, any form of collusion to restrict or eliminate competition is simply unacceptable,” said Joaquin Almunia, the EU’s competition commissioner.

“The commitments proposed by Apple and the four publishers will restore normal competitive conditions in this new and fast-moving market.”