Marilyn Monroe photos on auction in Poland

WARSAW, Poland (AP) — Who doesn't want a picture of Marilyn Monroe?

Hundreds of photographs of the blonde bombshell and other celebrities, including famous ones of Monroe in bed and as a ballerina, were being sold Thursday evening at an auction house in Poland.

Bidders and spectators packed the Desa Unicum house in Warsaw, where 238 pictures by the late American fashion and celebrity photographer Milton H. Greene were up for sale.

Most of these pictures of Monroe were taken from 1953 to 1957 when Greene was her advisor and business partner. He made many of the prints during Monroe's lifetime and they are highly valued by collectors. They include series of refined black-and-white studio photos and shots taken in natural surroundings, sometime in provocative poses.

As the bidding began, a black-and-white photo of a reclining Monroe in black stockings sold for 50,000 zlotys ($16,000), and another of her in a ballerina's dress sold for almost $20,000. A picture of her in bed sold for 26,000 zlotys.

The auction also offered Greene's pictures of Audrey Hepburn, Grace Kelly, Marlene Dietrich and Liza Minnelli. Other greats in the vast portrait collection, which was estimated at $680,000, included Cary Grant, Frank Sinatra, Paul Newman, Alfred Hitchcock and Marlon Brando.

The photos come from a collection of some 4,000 Greene pictures that Poland obtained from Chicago businessman Dino Matingas in the mid-1990s as the result of a complex communist-era embezzlement scandal linked to the buy-out of Poland's state debt. Proceeds from the auction will go to the Polish government.

Some of the images have never been published before, according to Marta Maciazek, the Polish official in charge of cleaning up the mess from the corruption affair.

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Calif. city plans to provide transgender surgeries

SAN FRANCISCO (AP) — San Francisco is preparing to become the first U.S. city to provide and cover the cost of sex reassignment surgeries for uninsured transgender residents.

The city's Health Commission voted Tuesday to create a comprehensive program for treating transgender people experiencing mental distress because of the mismatch between their bodies and their gender identities. San Francisco already provides transgender residents with hormones, counseling and routine health services, but has stopped short of offering surgical interventions, Public Health Director Barbara Garcia said Thursday after the vote was announced.

The idea for a new program that included surgeries came out of conversations between public health officials and transgender rights advocates who wanted mastectomies, genital reconstructions and other surgeries that are recommended for some transgender people covered under San Francisco's 5-year-old universal health care plan.

At the urging of the San Francisco Board of Supervisors and the San Francisco-based Transgender Law Center, the commission agreed this week to drop sex reassignment surgery from the list of procedures specifically excluded from the Healthy San Francisco plan.

But Garcia described the move as "a symbolic process" for now because the city currently does not have the expertise, capacity or protocols in place to provide the surgeries through its clinics and public hospital.

"The community felt the exclusion on Healthy San Francisco was discriminatory and we wanted to change that as the first step," she said.

Instead of expanding the existing plan, the Health Commission approved the establishment of a separate program that covers all aspects of transgender health, including gender transition. Garcia hopes to have it running by late next year, but said her department first needs to study how many people it would serve, how much it would cost, who would perform the surgeries and where they would be performed.

"Sex reassignment surgery is not the end all. It's one service that some transgender people want and some don't," she said. "We can probably manage this over the next three years without much of a budget increase because we already have these (other) services covered."

San Francisco in 2001 became the first city in the country to cover sex reassignment surgeries for government employees. Last year, Portland, Ore. did the same. The number of major U.S. companies covering the cost of gender reassignment surgery for transgender workers also doubled last year, reflecting a decades-long push by transgender activists to get insurance companies to treat such surgeries as medically necessary instead of elective procedures.

Kathryn Steuerman, a member of a transgender health advocacy group in San Francisco, said the city's latest move would help residents avoid going into debt to finance operations related to gender transition, as she did.

"I am filled with hope and gratitude that we are achieving this level of support for the well-being of the transgender community," Steuerman said.

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Boehner: Raising tax rates 'unacceptable'

Raising tax rates is "unacceptable" to House Speaker John Boehner as he prepares to open negotiations on the looming "fiscal cliff" with the president and congressional Democrats, he told "World News" anchor Diane Sawyer today in an exclusive interview.

"Raising tax rates is unacceptable," Boehner, R-Ohio, said in his first broadcast interview since the election Tuesday.

"Frankly, it couldn't even pass the House. I'm not sure it could pass the Senate."

That stance could set up a real showdown with the White House given that the president has said he would veto any deal that does not allow tax cuts for the rich to expire. But the speaker said that Republicans would put new tax revenue on the table as leaders work toward a deal.

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"I would do that if the president was serious about solving our spending problem and trying to secure our entitlement programs," Boehner said. "If you're increasing taxes on small-business people, it's the wrong approach."

Nevertheless, Boehner added that he is at least willing to listen to the president's proposals, even if they clash with his party's principles.

"Of course, we'll talk about it. We talk about all kinds of things we may disagree on," Boehner said. "I'm the most reasonable, responsible person here in Washington. The president knows it. He knows that he and I can work together. The election's over. Now it's time to get to work."

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The fiscal cliff is a mix of tax increases and spending cuts set to take effect at the end of the year that could sink the economy back into recession. Boehner told Sawyer he imagines that negotiations on a bipartisan deal will begin soon, although he did not reveal whether any talks had already been scheduled.

Still, he said he hoped the framework of a deal could be completed by the end of the year in order to direct the next Congress to work out the details.

"The American people elected new representatives," he said. "They're the ones who ought to be the ones to do this.

"There are things that we can do in the lame duck to avert the fiscal crisis, but we want to do this the right way. We don't want to rush through this in the next two to three weeks. And what do you get? You can't rewrite the tax code in the next two or three weeks. And, so, there's a lot of possibilities in terms of how we proceed, and I'm confident that we can."

Boehner also said he welcomes back Rep. Paul Ryan, whose profile has exploded since he was chosen by Mitt Romney as the vice presidential nominee. Ryan won re-election to his House seat in Wisconsin at the same time he lost the vice presidency, but Boehner demurred when asked whether his place on the presidential ticket would increase his leadership profile.

"Because he ran for the vice presidency, is he the leader of the Republican party now?" Sawyer asked.

"Oh, I wouldn't think so. Paul Ryan's a policy wonk," Boehner said. "He's involved in the cause of trying to bring us pro-growth economic agendas for America and making sure that we're doing this in a fiscally responsible way.

"I'm glad that Paul Ryan's coming back to the Congress. I would expect he would continue as chairman of the Budget Committee," he said.

"Probably nobody in the Congress knows more about pro-growth economic policies other than Paul Ryan. I don't think there's many people in the Congress who understand the entitlement crisis that we're facing more than Paul Ryan. I think he'll be an important voice in this discussion and in this debate."

Boehner also said that once he saw that Mitt Romney would lose the race for the White House, he went to sleep at about 11:15 p.m. on election night with the realization that he would wake up to divided government, but still "slept like a baby."

"I may not like the five cards that have been dealt to me, but those are the cards I've got in my hand, and my job on behalf of the American people is to find a way to vote with my Democratic colleagues and a Democratic president to solve America's problems," he said. "If there was one mandate that came out of the election, it was find a way to work together to address our problems."

Sawyer asked the speaker whether Romney should take responsibility for those election results, but Boehner said he is proud of his campaign.

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China opens party congress to begin power transfer

BEIJING (AP) — China's ruling Communist Party opened a congress Thursday to usher in a new group of younger leaders faced with the challenging tasks of righting a flagging economy and meeting public calls for better government.

The weeklong congress starts a carefully choreographed but still fraught power transfer in which President Hu Jintao and most of the senior leadership will begin to relinquish office to a new slate of leaders for the coming decade headed by the appointed heir, Vice President Xi Jinping.

Delegates filed into Beijing's Great Hall of the People, bedecked with red banners, and the congress was declared open after the national anthem played. The 2,268 delegates are drawn from the 82 million-member party where the real deal-making is done by a few dozen power-brokers behind the scenes, even as China is ever more connected to the world through trade and the Internet.

"We are faced with unprecedented opportunities for developments as well as risks. The party must keep in mind the trust of the people," Hu said in a speech aimed at summarizing successes of the past five years and outlining challenges for the future. "The fight against corruption remains a serious challenge for us."

Coming so soon after President Barack Obama's re-election in the United States, the congress has drawn unfavorable comparisons from politically minded Chinese who have bemoaned how little direct influence they have in choosing their leaders.

"I am doing nothing but staring at the television before Obama gets re-elected. As for China's party congress, there is no need for me to worry. On the contrary, it would be a waste of my time," Xu Xiaoping, a celebrity entrepreneur who co-founded a successful chain of English language cram schools, said on a Chinese version of Twitter where he has 6 million followers.

To many Chinese, China is at an inflection point. Its old model of heavily state-directed growth that lifted hundreds of millions out of poverty and made China an economic powerhouse is sputtering in the face of rising domestic debt and a weak global economy. Meanwhile, the government has to contend with the public's continued expectations of higher living standards and for less corruption and greater accountability, if not outright democracy.

In Tiananmen Square, adjacent to the congress venue, a woman in her 30s threw pieces of torn paper into the air and shouted "bandits and robbers!" in the early morning before she was taken away by security forces.

On the eve of the congress, four ethnic Tibetans in Sichuan province set themselves on fire in protests against Chinese rule of Tibetan areas, London-based rights group Free Tibet said, adding that the timing of the protests appeared aimed at sending a signal to the Chinese leadership.

Whether the new leaders want to move China in a new direction is not known. Xi and other top candidates for the new leadership have forged their careers as capable administrators in provinces and bureaucracies, not as policy trail-blazers. Should ambitious change be on their agenda, they will have to confront vested interests within their ranks: cosseted state industries and conservative officials grown prosperous and powerful under the current system.

One thing the party appears to be ruling out is a major shift toward a more open, democratic political system, despite appeals in recent months from commentators, retired party members and government think tanks.

"The leading position of the Communist Party in China is a decision made by history and by the people," congress spokesman Cai Mingzhao told reporters on Wednesday. He pointed to China's rise as an economic power and said, "It speaks fully to the strong leadership of the Chinese Communist Party and the fact that the political system suits China's national reality."

The congress itself is unlikely to give Xi and his colleagues a mandate for sweeping reform. They have been engaged with Hu, retired party elders and influential senior politicians and military commanders in divisive bargaining, made worse by a pair of scandals. Politburo member Bo Xilai was purged after an aide disclosed that Bo's wife had murdered a British businessman. One of Hu's top lieutenants was also sidelined after his son died crashing a Ferrari, a sign of corruption.

A likely result of the back-and-forth is a leadership that balances interest groups, and over the past decade that has been a recipe for plodding, incremental policy.

Cai, the congress spokesman, ticked off a list of what Hu's team had accomplished — wider access to state-supported education through the ninth grade, an expanded social safety net and the start of a nationwide low-cost housing sector.

"The past decade has witnessed the greatest improvement in people's livelihoods in the history of China's development," Cui said. "We will make guaranteeing and improving the people's well-being the guide and aim of what we do."

___

Associated Press writers Gillian Wong, Christopher Bodeen, Didi Tang and Louise Watt contributed to this report.

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Apple slides to five-month low, uncertainty grows

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Mom of 'Modern Family' teen star accused of abuse

LOS ANGELES (AP) — The mother of "Modern Family" star Ariel Winter has temporarily lost custody of the actress amid allegations she's been abusive to the teenager.

Court records claim Winter's mother, Chrisoula Workman, has been physically and emotionally abusive to her 14-year-old daughter, who plays Alex Dunphy on the hit ABC comedy.

The October order, first reported Wednesday by celebrity website TMZ, requires Workman to stay away from Winter until a Nov. 20 hearing. Records show Winter's sister filed for guardianship and was appointed her temporary guardian, but will not have access to her earnings.

The records describe Workman's abuse as consisting of slapping and name-calling.

Reached by phone, Workman said she was in the process of hiring an attorney.

Winter has appeared in films and TV shows since she was 7.

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Experts raise concerns over superhuman workplace

LONDON (AP) — Performance-boosting drugs, powered prostheses and wearable computers are coming to an office near you — but experts warned in a new report Wednesday that too little thought has been given to the implications of a superhuman workplace.

Academics from Britain's leading institutions say attention needs to be focused on the consequences of technology which may one day allow — or compel — humans to work better, longer and harder. Here's their list of upgrades that might make their way to campuses and cubicles in the next decade:

BRAIN BOOSTERS

Barbara Sahakian, a Cambridge neuropsychology professor, cited research suggesting that 16 percent of U.S. students already use "cognitive enhancers" such as Ritalin to help them handle their course loads. Pilots have long used amphetamines to stay alert. And at least one study has suggested that the drug modafinil could help reduce the number of accidents experienced by shift workers.

But bioethicist Jackie Leach Scully of northern England's Newcastle University worries that the use of such drugs might focus on worker productivity over personal well-being.

"Being more alert for longer doesn't mean that you'll be less stressed by the job," she said. "It means that you'll be exposed to that stress for longer and be more awake while doing it."

WEARABLE COMPUTERS

The researchers also noted so-called "life-logging" devices like Nike Inc.'s distance-tracking shoes or wearable computers such as the eyeglasses being developed by Google Inc. The shoes can record your every step; the eyeglasses everything you see. Nigel Shadbolt, an expert in artificial Intelligence at southern England's University of Southampton, said such devices were as little as 15 years away from being able to record every sight, noise and movement over an entire human life.

So do you accept if your boss gives you one?

"What does that mean for employee accountability?" Shadbolt asked.

BIONIC LIMBS — AND BEYOND

The report also noted bionic limbs like the one used this week by amputee Zac Vawter to climb Chicago's Willis Tower or exoskeletons like the one used earlier this year by partially paralyzed London Marathon participant Claire Lomas. It also touched on the development of therapies aimed at sharpening eyesight or cochlear implants meant to enhance hearing.

Scully said any technology that could help disabled people re-enter the workforce should be welcomed but society needs to keep an eye out for unintended consequences.

"One of the things that we know about technology hitting society is that most of the consequences were not predicted ahead of time and a lot of things that we worry about ahead of time turn out not to be problems at all," she said. "We have very little idea of how these technologies will pan out."

THE PRESSURIZED WORKPLACE

The report was drawn up by scientists from The Academy of Medical Sciences, the British Academy, the Royal Academy of Engineering and the Royal Society.

"We're not talking science fiction here," said Genevra Richardson, the King's College law professor who oversaw the report. "These technologies could influence our ability to learn or perform tasks, they could influence our motivation, they could enable us to work in more extreme conditions or in old age, or they could facilitate our return to work after illness or disability .... Their use at work also raises serious ethical, political and economic questions."

Scully said workers may come under pressure to try a new memory-boosting drug or buy the latest wearable computer.

"In the context of a highly pressurized work environment, how free is the choice not to adopt such technologies?" she said.

Union representatives appeared taken aback by some of the experts' predictions. One expressed particular disquiet at the possibility raised by the report that long-distance truck drivers might be asked to take alertness drugs for safety reasons.

"We would be very, very against anything like that," said James Bower, a spokesman for Britain's United Road Transport Union. "We can't have a situation where a driver is told by his boss that he needs to put something in his body."

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Online:

The report: http://royalsociety.org/policy/projects/human-enhancement

Raphael Satter can be reached on: http://raphae.li/twitter

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Latino groups to Obama: You owe us

Voters in a polling place in East Los Angeles on Tuesday (David McNew/Getty Images)

In initially off-the-record comments to the Des Moines Register's editors in October, President Barack Obama said that if he won re-election, he would owe it to Latinos.

"Should I win a second term," Obama said, "a big reason I will win a second term is because the Republican nominee and the Republican Party have so alienated the fastest-growing demographic group in the country, the Latino community."

Exit polls show the president's prediction was on the mark.

The national exit poll estimated that about 10 percent of those who voted in the presidential election identified as Hispanic, marking Latinos' highest-ever share of the electorate. Latinos backed Obama over challenger Mitt Romney a resounding 71 to 27 percent.

Gary Segura, a pollster for Latino Decisions and a professor at Stanford University, told reporters on Wednesday that he believes the exit poll understated Latinos' support for Obama by 4 points, and that the president actually won 75 percent of their vote.

Segura estimates that Latinos gave Obama an extra 2.3 percentage points in the popular vote. If Romney had managed to nab just 35 percent of Latinos, he would have won the popular vote, Segura said. (President George W. Bush captured at least that share of Latinos in 2000 and 2004, showing Republicans are backsliding with the group.)

Leaders of immigrant rights and Latino groups told reporters in a conference call on Wednesday that Obama owes his second term to Latino voters, and should repay them by passing comprehensive immigration reform. Obama promised to pass a law legalizing many of the estimated 11 million illegal immigrants in the country while he campaigned four years ago, and he's been chastised by Latino leaders for breaking his promise.

"Obama is going to return to the White House more energized to take these issues seriously," said Ben Monterroso, the director of Mi Familia Vota, a national organization that encourages Latinos to vote.

Eliseo Medina, secretary-treasurer of the Service Employees International Union, said Latino voters had sent a message to Obama. "We expect leadership on comprehensive immigration reform in 2013," he said. "To both sides we say: 'No more excuses.'"

The heavy pro-Obama Latino vote also sends a message to the Republican Party, which needs to make inroads in the fast-growing Hispanic community to survive. Ana Navarro, a Miami-based Republican political strategist who had warned Republicans to take a softer tone on immigration if they wanted to win the election, wrote on Twitter that gaining only 27 percent of the Latino vote is a "disgrace."

Most Latino voters said in the Latino Decisions poll that the most important issues to them in this election were the economy and jobs. Thirty-five percent of the voters listed immigration reform as their key issue.

"Our party needs to realize that it's too old and too white and too male, and it needs to figure out how to catch up with the demographics of the country before it's too late," Al Cardenas, the head of the American Conservative Union, told Politico. "Our party needs a lot of work to do if we expect to be competitive in the near future."

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China hauls away activists in congress crackdown

BEIJING (AP) — During her 30-hour train journey to Beijing, Wang Xiulan ducked into bathrooms whenever the conductors checked IDs. Later, as she lay low in the outskirts of the capital, unidentified men caught her in a nighttime raid and hauled her to a police station. She assumed a fake identity to get away, and is now in hiding again.

Wang's not a criminal. She's a petitioner.

She's among many people attempting to bring local complaints directly to the central government in an age-old Chinese tradition that has continued during the Communist Party era. But police never make that easy, and this week, as an all-important leadership transition begins, a dragnet is aimed at keeping anyone perceived as a threat or a troublemaker out of Beijing.

"There is no law in China, especially for us petitioners and ordinary folk," Wang, 50, said in an interview with The Associated Press. "Even common gangsters and hoodlums get to leave after they serve time for crimes, but for us, if we get locked up, we never know when we might be freed."

Authorities want no surprises as the handover of power begins in the capital Thursday. The transition already has been rocked by the party's messiest scandal in decades, involving a former high-flying politician now accused of engaging in graft and obstructing the investigation into his wife's murder of a British businessman.

Rights groups say the wide-ranging crackdown on critics bodes poorly for those who hope the incoming generation of leaders will loosen restrictions on activism.

"China's top political leaders are very nervous, as they have since early this year been consumed by one of the most destabilizing and disharmonious power struggles in decades," said Renee Xia, international director of the Chinese Human Rights Defenders. The group estimates that hundreds or thousands of people have come under some kind of restriction in preparation for the party congress.

Lawyers have been held under illegal house arrest, dissidents sent back to their hometowns and activists questioned. Internet users report difficulties accessing many websites and the failure of software meant to bypass Internet filters.

Veteran activist Huang Qi, who runs a website on petitioners like Wang, said nearly 1,000 people have contacted him over the past few weeks to complain that authorities have hired thugs to harass and beat them.

"I hope that the Chinese authorities will face up to the social problems," Huang said in an interview. "Using violence will only escalate the resistance."

The crackdown reflects the leadership's nervousness as slowing economic growth exacerbates public outrage over corruption, social injustice, pollution and favoritism toward state-run agencies and the elite at the expense of ordinary people.

Under normal circumstances, petitioners are relatively safe once they reach Beijing's outskirts, though in their home provinces they are almost perpetually on the run from hostile local officials or thugs-for-hire who want to nab them before they can get an audience with central government agencies.

Now, however, even the capital's fringes are off limits.

Wang, a petite woman with shoulder-length hair neatly tied back, has been trying for two decades to draw central government attention to what she says was police mishandling of a serious assault she suffered in her native Harbin. Not only did her attacker go unpunished, but Wang ended up getting dismissed from her job years later.

Wang arrived in late October in Lu Village in Beijing's southwest, where petitioners have sought refuge for years. A police post guards the road into the village, and residents say officers have lately blocked petitioners from entering.

Wang had rented a bed — a wooden plank on bricks — in a tiny concrete room shared with two others. A gang of two dozen men barged in one night at 11 p.m., demanded to see her ID, searched her belongings and grabbed her cellphone.

"I was scared to death when they suddenly barged in here," Wang said, pointing at the door, where the lock had just been replaced.

The men refused to identify themselves and bundled her into a minivan with other petitioners. At another stop, she saw a couple dragged into the vans in their pajamas, the woman wearing only one shoe.

All were taken to a police station in nearby Jiujingzhuang village, where many petitioners say police process them for return to their hometowns. Using someone else's identity, Wang was able to evade police suspicion and was released. Many of the others were sent back, she said.

The raids are having an effect. The compound that houses her room and others now has only a handful of residents, down from about 30.

"They've all been chased away, caught or scared home," said Liu Zhifa, a 67-year-old petitioner from Henan province and one of the holdouts. Liu confirmed Wang's description of the Oct. 31 raid and described his own encounter with thugs breaking his lock and entering his room three times in one night in mid-October.

"I asked them to show their identifications, and they yelled at me, saying 'What right do you have to see our identification? Who do you think you are?" said Liu. "They were ruthless. The authorities and the police are working with people in the underworld."

A police officer who would only give his surname, Wei, answered the phone at a Jiujingzhuang police station (not 'the' because the police station has another name) and denied that authorities were raiding petitioners' villages. "We only act according to the law," Wei said. Questions about the broader crackdown were referred to the Beijing public security bureau, which did not respond to faxed questions.

The crackdown has extended to lawyers such as Xu Zhiyong. He said Beijing authorities have held him under informal house arrest since mid-October, stationing four or five guards outside his apartment in Beijing around the clock.

Xu has campaigned for years against Chinese authorities' use of "black jails," or unofficial detention centers run by local governments to hold petitioners. The government has denied the existence of such facilities, but even the tightly controlled state media have reported on them.

"The illegal restriction of a citizen's personal freedom for a long period of time is criminal behavior," Xu wrote in an email. "In an authoritarian state, this type of crime takes place everywhere."

Authorities in Shanghai also have ratcheted up pressure on critics, sentencing veteran women's rights activist Mao Hengfeng to a year and a half of labor camp. Mao, accused of disturbing social order, had been detained in Beijing in late September, said her husband, Wu Xuewei, who indicated she was being put away to silence her before the party congress.

Even dissidents' relatives have come under pressure. Beijing activist Hu Jia said he was warned by police to leave town, and that even his parents told him that police had told them to escort him to his hometown.

"My parents said to me: 'Hu Jia, you don't know what kind of danger you are in, but we know,'" he recounted in a phone interview from his parents' home in eastern Anhui province. "They said: 'Beijing is a cruel battlefield. If you stay here, you will be the first to be sacrificed. Don't do this.'"

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Follow Gillian Wong on Twitter at twitter.com/gillianwong

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Exclusive - Amazon to win EU e-book pricing tussle with Apple

BRUSSELS (Reuters) - European Union regulators are to end an antitrust probe into e-book prices by accepting an offer by Apple and four publishers to ease price restrictions on Amazon, two sources said on Tuesday.

That decision would hand online retailer Amazon a victory in its attempt to sell e-books cheaper than rivals in the fast-growing market publishers hope will boost revenue and increase customer numbers.

"Faced with years of court battles and uncertainty I can understand why some of these guys decided to fold their cards and take the whipping," said Mark Coker, founder of Smashwords, an ebook publisher and distributor that works with Apple.

"It's certainly another win for Amazon," he added. "I have not seen the terms of the final settlement, but my initial reaction is that it places restrictions on what publishers can do, slowing them down just when they need to be more nimble."

A spokesman at the EU Commission said its investigation was not yet finished. Amazon and Apple declined to comment.

In September, Apple and the publishers offered to let retailers set 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.

The EU antitrust authority, which in September asked for feedback from rivals and consumers about the proposal, has not asked for more concessions, said one of sources.

"The Commission is likely to accept the offer and announce its decision next month," the source said on Tuesday.

Antoine Colombani, spokesman for competition policy at the European Commission, said: "We have launched a market test in September and our investigation is still ongoing."

Amazon declined to comment, while Apple did not respond to an email seeking comment.

Companies found guilty of breaching EU rules could be fined up to 10 percent of their global sales, which in Apple's case could reach $15.6 billion, based on its 2012 fiscal year.

AGGREGATE PRICING

UBS analysts estimate that e-books account for about 30 percent of the U.S. book market and 20 percent of sales in Britain but are minuscule elsewhere. When Amazon launched its Kindle e-reader, it charged $9.99 per book.

Apple's agency model let publishers set prices in return for a 30 percent cut to the maker of iPhone and iPad.

The U.S. Department of Justice is investigating e-book prices. HarperCollins, Simon & Schuster and Hachette have settled, but Apple, Pengin Group and Macmillan have not.

The DOJ settlement required that retailers must at least break even selling all ebooks from a publisher's available list, according to Coker and Joe Wikert, general manager and publisher at O'Reilly Media Inc.

It was not clear if EU regulators will include a similar requirement, which would prohibit Amazon from pricing all ebooks at a loss, said Wikert, a former publishing executive.

In the United States, Amazon will likely price popular titles at a loss and try to make up the difference on a publisher's other ebooks, he said.

Coker said any such rule could be dangerous in Europe, which still has distinct markets.

"It could allow a single retailer to charge full price in a large market like the U.K., and then sell below cost or for free in multiple smaller markets as a strategy to kill regional ebook retailing upstarts before they take root," Coker said.

FROWNING ON ONLINE TRADE CURBS

Antitrust regulators tend to frown on restrictions on online trade and the case is a good example, said Mark Tricker, a partner at Brussels-based law firm Norton Rose.

"This case shows the online world continues to be a major focus for the Commission," he said.

"These markets change very quickly and if you don't stamp down on potential infringements of competition rules, you can have significant consequences."

(Additional reporting by Alistair Barr in San Francisco; Editing by Rex Merrifield, David Goodman and David Gregorio)

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