Justice Dept Wants To Prevent Apple From Entering Contracts With Ebook Sellers

A federal judge ruled last month that Apple had conspired with the publishers to raise e-book prices. The book publishers previously settled the price-fixing charges. They are Hachette, HarperCollins, Simon & Schuster, Holtzbrinck Publishers, doing business as Macmillan, and The Penguin Publishing Co. Ltd., doing business as Penguin Group. The settlements were designed to encourage price competition and discounting, but that hasn’t happened and Apple has denied any wrongdoing. 

The government alleged that the publishers conspired with Apple to move the e-book industry away from the wholesale model employed by Amazon.com Inc., which had unnerved publishers by selling e-book versions of popular hardcover titles for as little as $9.99 before the April 2010 release of Apple’s iPad. Under its contracts with publishers, Amazon was free to sell books at any price it wanted. Apple alternatively adopted the “agency” model, under which publishers set the retail price and the store takes a cut. Under that model, the store can’t discount a book. The government alleged that Amazon was thereby pressured into accepting the agency model, 

The government wants Apple to agree to sign new contracts with the publishers will not raise the prices. On Friday, Apple responded by saying “the government’s proposed remedy is unnecessary, since the publishers are already signing new wholesale contracts”. the judge said the conspiracy harmed consumers in numerous ways. Some had to pay more for e-books, she said. Back in July the judge said, “some had to pay more for ebooks. Others bought cheaper e-books rather than the ones they preferred to purchase and others deferred purchases altogether rather than pay higher prices”.