Apple’s Inspiration For iBooks Price-fixing? The French


French publishing and price-fixing laws might have been the model for Apple's iBookstore price-fixing
French publishing and price-fixing laws might have been the model for Apple's iBookstore price-fixing

One of the ironic twists about the anti-trust lawsuits against Apple and the major publishing companies is that Apple’s entrance into the ebook market actually broke Amazon’s virtual monopoly on the ebook business. In the process, publishers gained the ability to control ebook pricing, which can be seen as actually encouraging competition in the industry.

While the U.S. Department of Justice and attorneys general from many states are pursuing lawsuits around the matter, not every country would see the situation in the same terms as the U.S. government. In France, for example, publishers can legally control pricing and are protected from booksellers undercutting their business as Amazon had been doing with its power over the ebook market. It’s even possible that France’s laws protecting publishers may have served as inspiration for the agency model that Apple used in building the iBookstore.

The New York Times published a story this week that looked at the French ebook market – or rather lack of market. The efforts by the French government and population to preserve the printed book market and brick-and-mortar bookstores is the crux of that story. In there, however, is discussion about a law adopted in 1981 that gives publishers and not booksellers the legal price-fixing rights.

Called the “Lang Law” for the culture minister that promoted it, the law prevents booksellers from discounting titles by any more than five percent of the list price established by publishers. Amazon attempted to fight the law as it brought its business to France, but succeeded only in getting the right to advertise and offer free shipping. As the ebook battle heated up in other countries, French publishers lobbied for and got a similar level of control over ebook pricing.

The result is that French publishers were able to establish the same power of control over ebook pricing that U.S. publishers got from Apple’s entrance to the ebook market. That’s a reality that contrasts rather starkly to the lawsuits leveled against Apple and publishing houses in America.

Whether France’s “Lang Law” served as a model for Steve Jobs, Apple, and publishers isn’t certain, though it’s likely that they were familiar with it (France’s protections on ebook price-fixing weren’t in effect when Apple launched the iBookstore alongside the iPad two years ago). Regardless of whether the law served as a basis for Apple’s use of the agency model or not, the anti-trust suit and alleged collusion between Apple and the publishers probably wouldn’t have been an issue in France.

This actually highlights a much broader issue for Apple that goes beyond the anti-trust suits. That issue is that Apple has to adhere to a different legal landscape in each country where it operates electronic media stores like the iBookstore or iTunes Store. That often leads Apple to geo-lock content to a specific country’s store – a problem for some frequent travelers and people that live and work in two or more different countries or regions. It also highlights the fact that Apple is an international company with a significant customer base outside North America.

Source: New York Times