02/07/2014 12:59 EST | Updated 04/09/2014 05:59 EDT

E-book prices could drop under Competition Bureau pact

The Competition Bureau says it has struck a deal with four publishers that should lower the price of e-books for Canadian consumers.

The federal agency has struck a deal with Hachette Book Group, HarperCollins, Macmillan and Simon & Schuster that will "allow retailers to discount e-books published by four of Canada’s largest e-book publishers," it said in an email.

The publishers will also eliminate what is known as “most-favoured-nation” clauses in their agreements, which links the price, cost or commission of e-books sold at one retailer to the price, costs or commission of e-books sold at another retailer.

The bureau said it had reached a “consent agreement” on the pricing of e-books after an 18-month investigation into the e-book industry, that determined the publishers "engaged in conduct that resulted in reduced price competition for e-books in Canada."

The four publishers have agreed to remove clauses in their distribution agreements that prevent individual retailers from offering discounts on e-books.

In an email, the Competition Bureau said 

"This agreement should benefit Canadian consumers by lowering the price of e-books in Canada,” commissioner of competition John Pecman said in a press release.

“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."

The pricing of e-books in Canada has been a head-scratcher for Canadian consumers, with some e-books deeply discounted from the price of a hardcover or trade paperback and others costing almost as much.

The U.S. prosecuted Apple last year for price-fixing on e-books and a  judge ordered the technology giant to modify contracts with publishers. The Competition Bureau claims that case and others involving e-books in the U.S. helped bring prices down by 20 per cent.