For a year-and-a-half, Apple has been claiming its innocence in an e-book price fixing case filed by the Justice Department against the tech company and five other book publishers. Though the other publishers settled a while ago, restrictions are just now beginning for Apple.
The Justice Department charged the publishers and Apple in April 2012 for illegally working together to raise the price of e-books as a way to curb Amazon’s success with e-book sales. Apple was the only company that didn’t settle and instead fought the case in a trial this summer. Ultimately, a federal judge in Manhattan ruled against the company.
According to The New York Times, Apple cannot enter into agreements with the five other publishers that “restricts, limits or impedes Apple’s ability to set, alter or reduce the retail price of any e-book,” under the new restrictions. The company is also prohibited from speaking with one publisher about its contract with another publisher. A “monitor” will keep its eyes on the company ,evaluating it and making sure all antitrust laws are followed.
Apple plans to appeal the case.
Though the other companies profess their innocence, why is Apple the only one to fight so hard in court? That’s likely because Apple is the only one with the money to afford it.
Last week, I reported that Apple and a number of other book publishers faced a lawsuit over collusion for e-book pricing. Yesterday, that lawsuit was made official by the U.S. Department of Justice.
According to this article by The New York Times, the DOJ is suing Apple, alleging that the company lowered its e-book prices in the iBookstore in 2010 as a means to fight Amazon’s low pricing. Julie Bosman explains.
At the time, Apple with its blockbuster iPad was trying to challenge Amazon’s hold on the e-book market. Amazon, the online retail giant, had become a kind of Walmart for the e-book business by lowering the price of most new and best-selling e-books to $9.99 — a price meant to stimulate sales of its own e-reading device, the Kindle.
Publishers, looking for leverage against Amazon, saw Apple as their white knight.
Three of the publishers — Hachette Book Group, Simon & Schuster, and HarperCollins — that faced suits have already agreed to settlements. But the fight is far from over. Either way, the Justice Department is looking to ensure that e-book prices are lowered for everyone because “E-books are transforming our daily lives, and improving how information and content is shared. For the growing number of Americans who want to take advantage of this new technology, the Department of Justice is committed to ensuring that e-books are as affordable as possible.”
As the popularity and success of the e-book industry continues to grow, so do the prices of the books, according to a number of readers and more importantly, the U.S. Department of Justice.
According to this article by The Huffington Post, Apple and a number of other top publishers are facing a possible lawsuit regarding collusion, for allegedly raising e-book prices. In addition to Apple, Simon & Schuster, HarperCollins, Hachette Book Group, Penguin Group and Macmillan also faces possible charges.
U.S. and European officials allege Apple and the others raised prices as a means to block rivals like Amazon from being able to offer cheaper books. The “agency model” that was in adopted in 2010 gives publishers the right to set their own e-book prices, giving Apple 30% of the cut. This model eliminated the “wholesale model,” which gave retailers the ability to set their own e-book prices.
And in addition to the new possible Apple is already under fire, dealing with a class-action lawsuit filed by consumers with similar allegations.
I personally haven’t noticed raised e-book prices, but it wouldn’t surprise me if some illegal collusion was going on behind the scenes. What do you guys think? Have you notices a price increase for e-books?