Reuters: DOJ to sue Apple for price fixing
This entry was posted on Tuesday, April 10, 2012.
|Apple iBooks (via Wikimedia)|
The gist is essentially this: Apple has been accused of causing a collective increase in ebook prices, along with a group of publishers including the Hachette Book Group (owned by Lagardere SCA), Simon & Schuster (CBS), Penguin USA (Pearson PLC), Macmillan (Verlagsgruppe Georg von Holtzbrinck GmBH), and Harper Collins Publishing (News Corp.). With the launch of the iPad, Apple tried bringing these publishers into its fold, and allowed them to completely revamp the wholesale purchase system with a new pricing model. Apple gave publishers a free rein over the prices they wanted to set for their ebooks, as long as Apple received a 30% cut out of the proceeds.
While there were rumors of the publishers being willing to settle with the Department of Justice over the price fixing charges when the news first broke last month, but as it turns out, Hachette, Simon & Schuster and Harper Collins are the only ones actually ready to settle. Apple, Macmillan and Pearson are said to be holding out against the settlement, according to sources quoted by Wall Street Journal.
The DOJ is expected to proceed with the settlement negotiations with the first three companies, and sue the last three on Wednesday morning. If the DOJ does manage to find the likes of Apple Inc. guilty, the potential ramifications could be quite disastrous for the Cupertino company, as the market for ebooks is burgeoning in size by the day.