U.S. Sues Apple & Major Publishers Over E-Book Pricing

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The Justice Department filed a civil antitrust lawsuit against Apple and major book publishers on Wednesday, charging that the companies colluded to raise the price of e-books in 2010.

Several publishers have agreed to a proposed settlement, people close to the negotiations said.

The lawsuit alleges that Apple and the publishers conspired to limit e-book price competition, causing “e-book consumers to pay tens of millions of dollars more for e-books than they otherwise would have paid.” The publishers named in the lawsuit are Hachette Book Group, HarperCollins, Macmillan, Penguin Group USA and Simon & Schuster.

Attorney General Eric H. Holder Jr. is to appear at a news conference at noon Eastern time to announce “a significant antitrust matter,” the Justice Department said on Wednesday.

The lawsuit capped an investigation that began last year into Apple and five of the biggest book publishers. The investigation was in response to what government investigators said was illegal action two years ago when the publishers adopted a pricing policy for e-books.

That policy, known as the agency model, allowed publishers to set their own prices on e-books, with the retailer taking a commission. It was a significant switch from the wholesale model that publishers had been using for print books, in which publishers charged retailers about half the cover price for a book and then allowed retailers to set their own sale price.

Many publishing executives have worried that without the agency model Amazon would gain a monopoly over e-books, because the wholesale model would allow the giant retailer to sell e-books for less than it paid publishers — a practice that smaller companies would not be able to imitate.

The Justice Department investigation has also set off worries among authors.

READ MORE: NY TIMES


1 COMMENT

  1. This is what the Yemach shemo Holder is busy with ebooks! i guess he’ll do anything to divert attention off his fast and furious scandal. when will November be here already so we can flush the toilet