“Agency Model” pricing on the way out in Europe?

According to a report filed by Reuters, it looks like Apple and several associated e-book publishers will be agreeing to a settlement that would allow Amazon to discount e-books in Europe, ending the alleged price-fixing that prevented Amazon from undercutting Apple’s prices.

Apple and the publishers offered in September to let retailers set their own prices or discounts for a period of two years, and also to suspend “most-favored nation” contracts for five years.

Such clauses bar Simon & Schuster, News Corp. unit HarperCollins, Lagardere SCA’s Hachette Livre and Verlagsgruppe Georg von Holtzbrinck, the owner of German company Macmillan, from making deals with rival retailers to sell e-books more cheaply than Apple.

The agreements, which critics say prevent Amazon and other retailers from undercutting Apple’s charges, sparked an investigation by the European Commission in December last year.

Pearson Plc’s Penguin group, which is also under investigation, did not take part in the offer.

This seems to indicate a trend moving us away from the so-called “agency model” whereby the publisher would set the price and the retailer (e.g. Amazon) had no ability to discount the final retail price.