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OFT Investigates Possible RPM in Relation to E-books

Feb.02.2011

The OFT has confirmed that it is investigating the pricing of e-books in the UK following "a significant number of complaints".  Targets of the investigation appear to include Pearson and Lagadère.

The issue under investigation is apparently an "agency pricing" model adopted by certain publishers under which the publisher sets the retail price (rather than the on-line retailer).  On its face the issue under investigation therefore appears to be resale price maintenance ("RPM"). 

This would be unusual as the OFT has traditionally senior management have historically been skeptical of the value of pursuing standard RPM cases.  One possible explanation is that, at least in the US where a similar investigation by attorney generals in Connecticut and Texas is underway, Apple appears to have played a coordinating role in persuading publishers to adopt the agency model.  In other words, there may be some suggestion of hub-and-spoke cartel type conduct.  Certainly there have been allegations of horizontal coordination between competitors in the other recent on-line RPM investigation by the OFT, which relates to on-line hotel bookings. 

A second possible explanation is that the publication by the European Commission of its revised Guidelines on Vertical Restraints – which include an extended section on RPM – has led to a renewed interest in RPM issues among antitrust enforcers in Europe.  That would be consistent with rumors that the Commission is itself considering pursuing investigations in this area.

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Sean-Paul Brankin
Partner – Brussels
Phone: +32.2.282.1830
Email: sbrankin@crowell.com