Apple finally responds to price fixing litigation, points finger at Amazon

The US Department of Justice has launched a high profile antitrust litigation against Apple and two other publishers (MacMillan and Pearson), as had been reported here. The publishing duo had rejected the allegations made by the DOJ soon after the charges were leveled against them, but Apple had been strangely silent about the entire matter, till now, that is. 

Apple's spokesman, Tom Neumayr, issued the following statement:
" The DOJ’s accusation of collusion against Apple is simply not true. The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry. Since then customers have benefited from eBooks that are more interactive and engaging. Just as we’ve allowed developers to set prices on the App Store, publishers set prices on the iBookstore. "

The issue revolves around Apple following a distinctly different  pricing model for ebooks as compared to music. In the case of the former, Apple has been allowing ebook publishers to set the price they want for their products, as long as Apple gets a 30% share of the pie. This is distinctly different from their strategy for selling music in the iTunes Store, where they follow the traditional wholesale purchasing model, to set the price they want themselves. The entire range of allegations essentially revolve around Apple's unprecedented ebook retail model, which is alleged to be a front for price hike collusion among all ebook publishers.

Through its official statement, Apple contends that its ebook pricing model in fact did away with Amazon Inc.'s monopolistic tendencies, as it had been the largest ebook retailer by a long distance, before Apple came into the frame.


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