US Government sues Apple over pricing of EBooks

The U.S. Justice Department has filed a lawsuit against Apple on Wednesday and against the five largest book publishers in the United States accusing them of conspiring to raise the selling price of electronic books and thereby
limit competition its sale.

It keeps the prosecution of the U.S. government, with the formation of this cartel, Apple and publishers have forced consumers to pay for e-books purchased tens of millions of dollars more than they would have paid in a completely
free market.

The publishers are Macmillan, Penguin, Hachette, HarperCollins and Simon & Schuster. The last three have agreed to a settlement with prosecutors, according to which they terminate any agreement entered into with Apple’s sale of
books through the Web.

Millions of electronic books were sold at $ 9.99 or other ended up selling for low prices and other prices set by the Agency Agreements Apple, usually 12.99 or $ 14.99."

This is precisely the goal that Justice attributed to the conspiracy: to impose on the sale of books what is known as a model agency. Under this model, publishers control the retail price to retailers designating as ‘agents’ that
do not actually have the power to alter the selling price imposed by publisher. 

Accordingly, the publishers could end competition between retailers and increase the prices consumers pay for electronic books.

The lawsuit also cites the words of the late founder and CEO of Apple, Steve Jobs, as the author told of his posthumous biography, the writer Walter Isaacson : "We will move towards an agency model, where [the publishers] sets
the price and we will stay at 30%, and the customer will pay more, but that’s what they want anyway.:

Talks between the leaders of the defendants began in September 2008; which has been claimed in the lawsuit filed in the courts of New York.

U.S. government ensures that Apple and its partners in the publishing world forced a price increase book sales at all digital platforms, to the point of forcing Amazon to pursue a very aggressive sales strategy.

The Justice Department has announced that it will keep open the case against companies that have chosen not to reach agreement, the manufacturer of the iPhone and two publishers.

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Posted by Farasat Ali on Apr 16 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry