Canadian Competition Bureau limits agency ebook pricing

Expert publishing blog opinions are solely those of the blogger and not necessarily endorsed by DBW.

Today the Competition Bureau of Canada, an independent law enforcement agency, announced that it has reached an agreement with four major trade book publishers that limits their use of agency ebook pricing in Canada.  

Following an 18-month investigation into the ebook industry in Canada, the Competition Bureau concluded that Hachette, HarperCollins, Macmillan, and Simon & Schuster have engaged in conduct that resulted in reduced competition for ebooks in Canada, in contravention of the country’s Competition Act. The four publishers have signed a consent agreement to remove or amend clauses in their distribution agreements with individual ebook retailers that the bureau believes restrict retail price competition. The full text of the agreement is available here

The U.S. Department of Justice reached a similar agreement with Hachette, HarperCollins, and Simon & Schuster in the United States in April 2012,  and with Macmillan in February 2013.

Some of the more notable points in the Canadian agreement state that for a period of 18 months:

  • The signing publishers cannot restrict an ebook retailer’s ability to set, alter or reduce the retail price of any ebook for sale to consumers in Canada.
  • Publishers cannot restrict retailers’  ability to offer price discounts or any other form of promotions.
  • The publishers cannot enter into a new agreement with any ebook retailer that limits the retailer’s ability to discount ebooks.

And for four and a half years after signing the agreement, the publishers cannot enter into an agreement with an ebook retailer that includes a “most favoured nation” (MFN) clause. An MFN clause means that a retailer is guaranteed the lowest price its competitors are offered.

“This agreement should benefit Canadian consumers by lowering the price of ebooks in Canada. Businesses operating in the digital economy must realize that anti-competitive activity will not be tolerated, whether it occurs in the physical world or the digital one,” said John Pecman, 
Commissioner of Competition, in a press release.

Digital Book World has noted the declining price of bestselling ebooks in the United States over the last year, which may be attributed in part to the Department of Justice decision around ebook pricing. It is possible that the Competition Bureau decision will lead to equal downward price shifts in Canada.

The Competition Bureau’s investigation into the ebook industry in Canada is ongoing.

Expert Publishing Blog
Trena White

About Trena White

Trena White is co-founder of Page Two, a new form of agency that helps non-fiction authors navigate the full range of publishing options and that consults with organizations about digital publishing. She is the former publisher of Douglas & McIntyre, which was at the time Canada’s largest independent publisher. Before joining D&M, she worked as a non-fiction editor at McClelland & Stewart. She guest lectures regularly at Simon Fraser University and the University of British Columbia and holds a master of publishing from SFU. She blogs about digital publishing in Canada. She can be found on twitter @trenawhite.