Apple and others face lawsuit for allegedly fixing eBook prices

It's clear that there is a growing popularity for eBooks, read primarily on eReaders such as Amazon's Kindle and tablets like Apple's iPad. However, the US government is now saying that Apple and a number of book publishers worked together to raise the prices of eBooks. Today, the US Justice Department filed a lawsuit against Apple and Hachette, HarperCollins, Macmillan, Penguin and Simon and Schuster.

In a statement, US Attorney General Eric Holder said:

During regular, near-quarterly meetings, we allege that publishing company executives discussed confidential business and competitive matters – including Amazon’s e-book retailing practices – as part of a conspiracy to raise, fix, and stabilize retail prices.

In a separate statement, Acting Assistant Attorney General Sharis A. Pozen claims that Apple's late founder Steve Jobs was directly involved in the eBooks pricing scheme. Pozen said:

Our complaint also quotes Apple’s then-CEO Steve Jobs as saying, “the customer pays a little more, but that’s what you [he’s referring to the publishers here] want anyway.”

The Justice Department has said that three of the publishers involved in the lawsuit, Hachette, HarperCollins and Simon and Schuster, have already agreed to settle their cases with the government. The settlement will require those publisher to give ebook retailers such as Amazon and Barnes and Noble a way for them to reduce the price of eBooks sold by those publishers.

Apple has yet to comment on the lawsuit. One of the book publishers that did not agree to the settlement, Macmillian, posted up a response which said, " ... the settlement the DOJ wanted to impose would have a very negative and long term impact on those who sell books for a living, from the largest chain stores to the smallest independents."

The LA Times has a statement from Amazon praising the government's actions, saying, "This is a big win for Kindle owners, and we look forward to being allowed to lower prices on more Kindle books."

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15 Comments

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I've read the DOJ court brief, and if everything they are saying is 100% factual, then the publishers, and Apple are going to get the long hard d*ick of the law shoved up them. In addition, the brief names "unknown" conspirators (E.G. CEO's, company presidents, et al that contributed to this price fixing scheme).

I don't think the publishers changing their business model back is going to make this case go away.

I really don't see how Apple at the very least has done anything wrong here. How is charging more for a product illegal? Especially when its not a monopoly? All Apple did was say "you guys set the price, we'll take 30%" as far as I understand...? Now if the publishers all secretly agreed to price their eBooks at $20 instead of say $10, that I could understand as being an issue.

Very confused!

Pc_Madness said,
I really don't see how Apple at the very least has done anything wrong here. How is charging more for a product illegal? Especially when its not a monopoly? All Apple did was say "you guys set the price, we'll take 30%" as far as I understand...? Now if the publishers all secretly agreed to price their eBooks at $20 instead of say $10, that I could understand as being an issue.

Very confused!


well, that's pretty much what happened! Essentially the gist of it is that amazon was selling books through its store at reasonable prices, then apple decided to enter the market with ibooks. With ibooks apple made a deal with the publishers that prices would be set higher than they had been, and no other seller could undercut them; essentially saying that the publishers set an industry wide price which was higher. this meant that because prices were higher then the publishers and apple etc made more money, but it was **** for the consumer.

ja Apple is going to jail! hopefully they'll break apple up, one for abusing Chinese people, another for screwing record labels, one for siri, one for iPhone, one for magic, one for distortion field e.t.c

Wow they going to sue for eBook price fixing while they cant do crap about gas price fixing? Isnt it obivious when you see that mostly all the gas stations have .10 cents more or less each time the price goes up?

How about the DOJ looks at Hollywood for the exact same thing taken to the nth degree?

Six major studios collaborating on release dates and content creation while price fixing everything from the payments for workers and talent through the price of movie tickets, DVDs, rentals, songs, etc. etc.

Six divisions of the same company. No real competition between them in the capitalist sense of the word.

I get my ePubs for free. I can't imagine buying digital books that are not even discounted from the physical release and sometimes more expensive than the physical release.

UndergroundWire said,
I get my ePubs for free. I can't imagine buying digital books that are not even discounted from the physical release and sometimes more expensive than the physical release.

Yeah, it seems ass backwards to me as well. I think it has more to do with demand than anything. For me the digital version of a lot of books (especially reference books) have more value than the print version..... so it follows that it should be worth more money... I guess? Or maybe the publishers don't want to undercut the print because so much of their infrastructure and so many jobs depend on the print version of books staying in existence? I doubt it has anything to do with brick and mortar stores, since that is basically B&N.

If I'm going to buy a digital version of a book, I buy from either Amazon or B&N. I can access those on anything and am not locked down to iOS.

That being said, iBooks has excellent ePub support .

brent3000 said,
However in apples defence they prob only price the books at the publishers request...

After all Apple take 30% anyway...

They happily wanted that (price increase)...