Late Tuesday night, a lawsuit was filed alleging that Apple and five publishers — HarperCollins, Hachette Book Group, Macmillan, Penguin, and Simon & Schuster — “colluded to increase prices” on e-books, according to an article at CNET.
The issue at the heart of the lawsuit is the agency model that lets publishers set their own e-book prices. Traditional print publishing uses the wholesale model, in which publishers set retail prices and retailers are free to determine their own prices. The filing claims that Apple worked with the five publishers to “boost profits and force e-book rival Amazon to abandon its pro-consumer discount pricing.”
The plaintiffs are seeking class action status in their filing, which seeks not only restitution and damages but also a determination that the agency model is illegal. Their attorney, Steve Berman, was quoted as saying: “Fortunately for the publishers, they had a co-conspirator as terrified as they were over Amazon’s popularity and pricing structure, and that was Apple. We intend to prove that Apple needed a way to neutralize Amazon’s Kindle before its popularity could challenge the upcoming introduction of the iPad, a device Apple intended to compete as an e-reader.”