Uberdownloads Blog
Apple, Book Publishers Face E-Book Antitrust Lawsuit

The U.S. Justice Department plans to sue Apple and 5 U.S. publishers for alleged price-fixing on e-books.

The Wall Street Journal reports that the lawsuit is based on changes made to how publishers charge for e-books when Apple released the first iPad.

Book publishers began using an “agency model” in which publishers set their own e-book prices, rather than the traditional wholesale model in which publishers set a retail price and retailers set their own sales price.

The controversy began when the pricing model materialized in 2010 after book publishers asked Amazon to increase the price of e-books on its Web site.

Amazon stood firm in its contention that anything above $9.99 was too high, and used lower e-book prices to attract users to its e-book reader, Kindle. Amazon eventually relented after many popular Macmillan titles disappeared from the e-tailer’s site.

Now it appears that Apple’s CEO Steve Jobs was behind the push for the high pricing model. In Steve Jobs’ biography, Walter Isaacson offered this revealing quote.

“We told the publishers, ‘We’ll go to the agency model, where you set the price and we get our 30%, and yes, the customer pays a little more.’ They went to Amazon and said, ‘You’re going to sing an agency contract or we’re not going to give you books.’”

Now the feds aren’t taking this secret agreement lightly and plan to sue Apple, as well as publishers HarperCollins Publishers, Hachette Book Group, Macmillan Publishers, Penguin Group, and Simon & Schuster.

Several of the parties expected to be named as defendants have already begun discussions with regulators to head off an expensive antitrust court battle, the newspaper reported, citing sources familiar with the matter.