DOJ Threatens to Sue Apple, Publishers for eBook Price Fixing
Following closely on the heels of the new iPad announcement, The Wall Street Journal reported that the Department of Justice (DOJ) has threatened to sue Apple and others for colluding with publishers to fix eBook prices.
The case involves five major publishers, including Simon & Schuster, Lagardere SCA's Hachette Book Group, Penguin Group, Macmillan and HarperCollins. The Journal reports that several of the parties involved in the case are already in discussions about a possible settlement.
None of the publishers involved could be reached prior to press time, and Apple declined to comment on legal matters.
Scrutiny around eBook pricing is nothing new. In December of last year, the European Commission announced that it was looking into possible collusion amongst Apple and the same major publishing houses. Immediately following the European announcement, the DOJ said it too was looking into a possible antitrust suit.
The investigation is aimed at uncovering Apple's role in the current state of the eBook market and dates back to launches of both the Amazon Kindle and Apple's iPad.
When Amazon first launched its Kindle eReader, it did so in conjunction with heavily discounted eBooks, pricing many popular bestsellers at $9.99 and subsidizing the loss on the titles.
Later Apple launched the iPad in April of 2010. The company went directly to the publishers, telling them that they could price their books as they saw fit and Apple would take a 30 percent cut of anything sold through iTunes. Amazon eventually had to bend to the new model, effectively raising the price of eBooks across the board.