When the iBookstore came to the Apple iPad, I was overjoyed. I love to read but I don’t like keeping shelves of books around. Apple and several big-name book publishers evidently had a different reason to be overjoyed — higher prices for e-books on the Apple iPad when compared to Amazon Kindle prices.
Today, the U.S. Department of Justice (DOJ) announced that it had filed a lawsuit against Apple and several publishers — including Penguin, Simon & Schuster and HarperCollins — alleging that the companies colluded in a price-fixing scheme.
Attorney General Eric Holder revealed more details about the case during an April 11 press conference.
“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 addition, we allege that these publishers agreed to impose a new model which would enable them to seize pricing authority from bookstores; that they entered into agreements to pay Apple a 30 percent commission on books sold through its iBookstore; and that they promised — through contracts including most-favored-nation provisions — that no other e-book retailer would set a lower price. Our investigation even revealed that one CEO allegedly went so far as to encourage an e-book retailer to punish another publisher for not engaging in these illegal practices.” Source: DOJ
Although the lawsuit was just announced, the DOJ has already settled with a few publishers including HarperCollins. The settlement will allow e-book retailers like Amazon to set its own book prices and prevent publishers from sharing sensitive information with one another.