The latest charges announced by the Department of Justice(DoJ) against Apple Inc., and 5 of the largest U.S. publishers who allegedly conspired to raise prices on eBooks and block Amazon.com from selling e-books at $9.99.
Attorney General Eric Holder revealed the federal suit at a news conference in Washington, he said, “As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles.”
Three publishers have settled already and agreed to let Amazon and other retailers set the price of eBooks and upend the model that had caused the cost of best-selling eBooks to rise to $12.99 or $14.99. The three publishers agreed to severe their agreements with Apple.
On top of that a separate settlement with the states might lead to tens of millions of dollars in restitution to customers who purchased eBooks.
In my previous posts, I wrote how Apple executives worked with the publishers back in late 2009 and 2010 to finesse the new pricing model and, according to the DoJ, “entered into a functionally identical agency contract with Apple that would go into effect simultaneously in April 2010.”
I can see some merit in on behalf of some publishers who have hit back at the allegations by stating that they did nothing wrong and acted to stop Amazon from taking a dominant role in eBook retailing.
The chief executive of Macmillan denied the collusion allegations and rejected the DoJ’s settlement proposal because it would enable Amazon to recover its monopoly position. Macmillan also believes there would be a negative long term impact for large chain stores and small independent book stores alike.
Steve Jobs reportedly told his biographer, “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.”
Amazon has hailed the settlement as a victory for consumers and users of Kindle its eReader saying, “We look forward to being allowed to lower prices on more Kindle books.”
There was no comment from Apple.
There’s a lot more reported in the up-to-date Wall Street Journal article.
To read my previous articles click on Expect to pay more for your eBooks, one more consumer rip off to add to the list written on December 17, 2011 and another Feds might sue Apple on eBook pricing written on March 9, 2012.