The Bookseller reports that the investigation into agency pricing by the UK Office of Fair Trade could hold up any new publishers from switching to agency terms for as long as a year. Although OFT is careful to insist that the mere fact of an investigation should not be taken to mean that agency pricing is illegal, but given that nobody is sure yet which way the investigation is going to go, publishers are concerned about negotiating agency terms and then potentially having to turn right around and renegotiate new terms if the OFT finds against it.
Nonetheless, publishers are finding it hard to have to wait for as much as a year to find out what the status of agency pricing is, losing out on any potential sales from Apple’s iBooks store (which requires agency pricing terms) during that time. The article notes that agency pricing sales may account for as much as 1/3 of e-book sales. (It’s not clear whether that’s sales overall, or just in the UK.)
If agency pricing does turn out to be in breach of competition law, the OFT could impose a fine of up to 10% of worldwide annual group turnover, though most fines do not go to that extreme. It is not clear what implications such a ruling in the UK would have on agency pricing in the US.
