HarperCollins and Hachette Disband Agency Model for the UKBy
HarperCollins and Hachette are the first major publishers to absolve the agency pricing model for the UK version of Amazon. The two literary giants have removed the text that appears under ebook listings that said “The Price has been set by publisher.” This move was due to the European Justice Department ruling that basically said price fixing cartels were illegal under EU law.
The move to abandon the agency model in the UK will benefit price conscious consumers. Books on the Amazon website have already started to slightly decrease in price, for example the The Hobbit by J.R.R. Tolkien is now £3.65 on Kindle, instead of £4.99. JK Rowling’s The Casual Vacancy is now selling for £8.08 and the old price was for £9.99. As you can see, the savings are not massive, but the prices have decreased.
In Europe, Simon and Schuster, Hachette Livre, HarperCollins, and the parent company of Macmillan all removed any previous deals with Apple to sell ebooks under the agency pricing model where the publishers set the prices. For the next two years, Amazon and other retailers will be able to sell the publishers’ ebooks at their own determination of the price, or the original “wholesale model.” This model is what Amazon originally relied upon to price ebooks for sometimes less than price paid to the publisher, a move that allowed the online retailer to encourage customers to purchase Kindles. When the publishers and Apple were accused of collusion in order to switch to the agency model, critics argued that it was simply an effort to tear down some of Amazon’s stronghold on the ebook market.
These two publishers are the first to really come to grips with the entire agency pricing meltdown. It seems Amazon was the first large ebook reseller that they have negotiated new pricing and is only a matter of time before the discounted titles appear on the UK version of Barnes and Noble and Kobo.