UPDATE: EU Investigating E-Book Pricing For Antitrust Concerns

The European Union's antitrust watchdog is investigating five publishers and tech giant Apple Inc. (AAPL) over the way they sell e-books and the so-called agency pricing model, it said in a statement Tuesday.

The publishing firms involved in the investigation are Hachette Livre, owned by Lagardere Publishing; Harper Collins of News Corp. (NWS); Simon & Schuster of CBS Corp. (CBSA); Penguin of Pearson PLC (PSON.LN) and Verlagsgruppe Georg von Holzbrinck.

"The Commission will in particular investigate whether these publishing groups and Apple have engaged in illegal agreements or practices," that would restrict competition, the statement said. "The Commission is also examining the character and terms of the agency agreements entered into by the above named five publishers and retailers for the sale of e-books."

The agency model is a response by publishers to falling physical book sales and the growing market for e-books, read on devices such as Amazon's Kindle (AMZN). The success of e-books has resulted in some retailers offering them at a heavy discount.

Six publishers agreed to set the consumer prices of their digital titles and, under this model, retailers then acted as agents for each sale, taking 30% and returning 70% to the publisher.

Verlagsgruppe Georg von Holtzbrinck, which owns publisher Macmillan, confirmed it is being investigated. "The publishing group holds that the allegations are unfounded," it said in a statement.

A spokeswoman for HarperCollins said "We're co-operating fully with the investigation," without giving further details.

The other companies didn't immediately respond to requests for comment.

The duration of the formal proceedings, which opened today, depends on how the companies involved respond to the investigation and the complexity of each case. The opening of proceedings means the Commission will treat the case as a matter of priority, it does not prejudge the outcome of the investigation.

In February, the U.K.'s Office of Fair Trading announced an investigation into agency pricing; it said Tuesday it will close its investigation and "continue to cooperate closely with the European Commission on this matter to help secure the best outcome for U.K. consumers."

News Corp. also owns Dow Jones & Co., publisher of this newswire and The Wall Street Journal.

-By Matina Stevis and Frances Robinson, Dow Jones Newswires; +32 (0)2 741 1 483; matina.stevis@dowjones.com

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