Apple, publishers sued over pricing

U.S. accuses e-book sellers of conspiring so consumers “paid millions of dollars more” for popular titles,

- By Scott Martin USA TODAY Contributi­ng: Carol Memmott

Prices on some electronic books could soon come down. The U.S. slapped Apple and five of the nation’s six largest publishers with an antitrust lawsuit Wednesday, charging that they conspired to raise the prices that consumers pay on e-books.

The lawsuit, filed by the Justice Department in U.S. District Court in Manhattan, said the effort by those involved was intended to counter popular pricing of $9.99 set by Amazon. “As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles,” Attorney General Eric Holder said at a Justice Department news conference.

Publishers teamed with Apple to restrain “retail price competitio­n” to the detriment of consumers, the lawsuit says. As a result, millions of e-books that would have sold at retail for $9.99 or less, instead sold for $12.99 or $14.99 under an “agency model” in which retailers couldn’t change the price set by publishers, the lawsuit says.

“Apple clearly understood that its participat­ion in this scheme would result in higher prices to consumers,” the lawsuit said. Apple did not respond to requests for comment. The moves underscore the publishing industry’s concerns about Amazon’s control of e-book pricing. Publishers saw the agency model as a way to prevent Amazon from lowering the price of e-books to levels they considered unsustaina­ble for themselves and other bookseller­s. “This is a big win for Kindle owners,” Amazon said in a statement Wednesday. “We look forward to being allowed to lower prices on more Kindle books.”

Since Amazon’s 2007 launch of its Kindle reader, it has sold best sellers at a standard $9.99.

Harpercoll­ins, Simon & Schuster and Hachette Book Group agreed to settle the antitrust case, but Apple, Penguin Group and Holtzbrinc­k Publishers Group have not, the DOJ said.

The conspiracy came as the ipad was nearing its launch, the lawsuit said. “We’ll go to (an) agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that’s what you want anyway,” former CEO Steve Jobs said, according to the lawsuit.

Hachette Book Group and Macmillan said they did not collude. Harpercoll­ins said it did not violate any antitrust laws. Penguin said it has done nothing wrong. And Simon & Schuster declined to comment.

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