class=’ ‘>Apple officially charged by US Justice Department for price-fixing
Apple has been officially charged, along with several major book publishers, by the US Justice Department with regards to ebook pricing
Published on Apr 11, 2012
Published on Apr 11, 2012
Apple and several major book publishers have just been officially charged by the US Justice Department with regards to ebook pricing.
Back in August 2011 a US District Court in Northern California accused Apple, along with HarperCollins Publishers, Hachette Book Group, Macmillan Publishers, Penguin Group, and Simon & Schuster, of price-fixing.
What does all this boil down to? In a nutshell, this: Apple – along with the named book publishers – are accused of illegally raising the prices of ebooks for their own ends (this is sometimes referred to as price-fixing).
Apple wants a piece of Amazon’s ebook pie but cannot complete with the online retail giant. Amazon simply has too much scale and market share, thanks to its original business model and Kindle eReader device.
Apple, according to reports, was instrumental in forcing a switch to an “agency pricing model” – a model it claimed would enhance competition in the industry by allowing more electronic booksellers to thrive.
The US Department of Justice did not see it like this, however, and has formally charged Apple for its role in this debacle.
Here’s an extract from our original report on the alleged price fixing:
‘If Amazon’s prosumer pricing went uncontested, Apple would have to sell books near or below their actual wholesale cost. So when Apple launched its original iPad it had a plan in place to ensure eBook pricing switched from a wholesale to agency-based model.’
Bloomberg reports that several publishers are seeking to settle with the DOJ, according to Tech Crunch. Simon & Schuster, Lagardère SCA’s Hachette Book Group and HarperCollins could settle as soon as today.
Apple and Macmillan have refused to settle.
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