OFT launches investigation into digital publishing
The OFT has finally responded this morning to the growing clamour surrounding the e-book industry by announcing that it is opening a formal competition law investigation into digital publishing.
Pricing practices and arrangements between publishers and e-retailers have been the subject of a very public - and very modern - debate in the industry over the last 12 months, played out in respected trade journals and across the blogosphere. As traditional publishing businesses strive to adapt to a new, and eventually predominant, online sales world, business models have proliferated and legal uncertainty has multiplied.
Robert Vidal, Head of EU, Competition and Trade at European law firm Taylor Wessing LLP, comments:
"The Office of Fair Trading has just kicked over the beehive. The outcome of this competition law investigation is crucial to the interests and strategies of both publishers and digital retailers."
"In essence, this is a turf war. The OFT will be determining who gets to have the whip hand when it comes to price. Either we return to a digital version of the Net Book Agreement, last used in the 1990s, where publishers decide the resale price of digital books under the "Agency Model", or alternatively, digital vendors get to make the final decision. Either outcome will have dramatic consequences for both the publishing industry and consumers."
"It is interesting to note that in the US both Texas and Connecticut have already launched anti-trust investigations into similar arrangements. A lot of time and resource will now be spent lobbying the OFT over the next few months."
"The OFT has a range of policy tools available to it for bringing the investigation to an end, including settlements. However, the penalties for a failure to comply with competition law can be severe: any agreement with an anti-competitive restriction may be deemed void and unenforceable, and an infringing business may be fined up to 10% of its worldwide turnover. The OFT has been careful to state that the investigation is at an early stage, and that it has not formed a view on whether any of the parties - publishers or retailers - have breached competition law."
Robert Vidal is a highly regarded competition law specialist who advises companies on the application of EU and UK competition law. He has built up significant behavioural experience successfully defending companies during investigations run by the OFT and European Commission in sectors as diverse as luxury brands, consumer products, media and entertainment, and sports.
Lawyers Robert Vidal
Notes to editors
For further information please contact Helen Needham
Tel: + 44 (0) 20 7300 4156
