Question
Until recently, in Canada, contracts between Apple and book publishers for sale of electronic books (ebooks) on Apple store said that if a publisher offers
Until recently, in Canada, contracts between Apple and book publishers for sale of electronic books (ebooks) on Apple store said that if a publisher offers a lower price to any other ebook retailer (e.g. Amazon), then the publisher must also offer this lower price to Apple. This is a so-called MFN (most favored nation) clause. The Competition Bureau of Canada argued that this practice is anticompetitive and put a stop to this (i.e. no more MFN clauses in the contracts between publishers and Apple). Why would this practice be anticompetitive? Why would the publishers and Apple wish to have such an agreement in their contracts? Who benefits from this policy and who is harmed by it?
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