Apple Hit with DOJ Antitrust Lawsuit over Ebook Pricing

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The U.S. Department of Justice followed through on its warning and filed an antitrust lawsuit against Apple on Wednesday alleging that the Mac and iPad maker collaborated with publishers to artificially raise the price of ebooks. Along with Apple, the DOJ named  Simon & Schuster, Harper Collins, Penguin, and Hachette in the lawsuit, according to Bloomberg.

DOJ sues Apple, others, over ebook price fixingDOJ sues Apple, others, over ebook price fixing

The DOJ has been conducting an investigation in March into whether or not the companies colluded to artificially raise the price of ebooks by forcing the adoption of the agency model for book sales. The agency model gives publishers control over the price of books instead letting retailers set their own prices — an option Amazon.com regularly took advantage of to sell books below cost.

Apple pushed the agency model for its iBookstore where it also struck deals blocking lower prices for the same titles through other book stores.

The DOJ warned Apple in early March that it was considering filing an antitrust lawsuit. The government agency also started negotiating with publishers to reach an out of court settlement. Apple, Penguin and MacMillin, however, refused to participate in negotiations and claimed they haven’t broken any laws.

Simon & Schuster, along with Hachette, have been negotiating with the DOJ, and the agency says it announce what it called an unspecified antitrust settlement later today.

Apple has not commented on the news.

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4 Comments

BurmaYank

What gigantic street cred Apple would gain in negotiations with hesitant potential content-supplier partners in the future, if Apple could prevail in its battle with the DOJ’s anti-trust squad!

Bosco (Brad Hutchings)

Giant fail of the whole having Al Gore on the board. This is the kind of thing that was supposed to prevent. Not by having a pocket joker to play, but by having good advice on how super serial the government is when it is.

geoduck

Another interesting report from CNET. Legal Experts think DOJ is Likely to Lose
Apple wasn’t present at the critical discussions.
The kind of cooperation between competitors is not necessarily an antitrust violation.
It’s an interesting read.

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