Feds Accuse Apple, Publishers of Price-Fixing

Dennis Faas's picture

The United States Department of Justice (DOJ) and fifteen U.S. states are suing Apple and some major book publishers for colluding to keep electronic book prices higher than they should be.

According to a report, the alleged conspiracy cost consumers more than $100 million during the past two years.

According to the DOJ, Apple worked with several major publishers, including Penguin, Simon & Shuster, Holtzinbrinck, and Macmillan, to charge $2 to $5 more than necessary for each copy of certain e-books.

Late Apple Chairman a Part of Conspiracy, Official Says

In a news conference held in connection with the conspiracy on Wednesday, United States Attorney General Eric Holder said that "we believe that consumers paid millions of dollars more for some of the most popular titles."

Most interesting may be allegations against some of Apple's top brass.

The Department of Justice's antitrust director, Sharis Pozen, said that late Apple chairman Steve Jobs told publishers that "the customer pays a little more, but that's what you want anyway." (Source: businessweek.com)

Apple has not yet responded to these allegations.

Publisher Denies Doing Wrong

But Macmillan, one of the publishers named in the suit, says it has done nothing wrong. "Macmillan did not act illegally," said the company's Chief Executive Officer, John Sargent. "Macmillan did not collude."

Sargent added that it's "hard to settle a lawsuit when you know you have done no wrong." (Source: businessweek.com)

This is not the first report on the existence of e-book conspiracies. Several U.S. states, including Connecticut and Texas, have already reached settlements over e-book price fixing.

Together, those settlements were worth $52 million and involved publishers Hachette and HarperCollins.

But that $52 million is a paltry amount when one considers recent estimates that consumers will spend $2 billion this year on e-books, with the number rising to $10 billion by 2016. (Source: google.com)

Meanwhile, across the Atlantic, the European Commission is currently investigating e-book pricing. Depending on the outcome of that investigation, it's possible Apple will face additional legal problems in Europe in the coming months. (Source: wsj.com)

Rate this article: 
No votes yet