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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