DOJ Could Sue Apple As Soon As Today Over E-Books, Works to Settle With 5 Publishers
April 11, 2012 9:15 AM
comment(s) - last by
Apple is not part of the settlement talks with DOJ
The U.S. Department of Justice (DOJ) could
sue Apple this week
over allegations regarding raised prices of e-books via an agency sales model.
Last December, the European Commission opened a formal antitrust investigation into whether five international e-book publishers had been partaking in anticompetitive practices with the help of Apple and its e-book store iBooks. The five e-book publishers include
Hachette Livre (Lagardère Publishing France), Harper Collins (News Corp., U.S.A.), Simon & Schuster (CBS Corp., U.S.A.), Penguin (Pearson Group, United Kingdom) and Verlagsgruppe Georg von Holzbrinck (owner of inter alia Macmillan, Germany).
Traditionally, publishers sell physical books to retailers for about half of the cover price, which is considered a wholesale model. Retailers then had the ability to sell those books to customers for a lower price if they wanted to.
But when e-books came along, this model was challenged. Amazon started selling best sellers for as low as $9.99 to encourage its Kindle e-reader sales. Publishers were not happy.
Apple then came along
, and publishers began to worry that it would take over the book industry the way Apple's iTunes took over the music industry, where customers would choose to purchase cheap, digital books instead of physical books.
However, Apple struck a deal with publishers in 2010. An agency model was implemented, where publishers were allowed to set the price of a book and Apple would take a 30 percent cut. The only restriction was that publishers were not allowed to let rivals sell the same book at a lower price.
This model helped Apple because its original iPad launch occurred in 2010, which was coupled with iBooks. To assure a successful launch of the device, DOJ believes Apple cut the agency model deal with publishers, which turned out to be an anticompetitive move.
After the European Commission opened an investigation of this agreement, DOJ climbed aboard as well. After looking further into the situation,
DOJ threatened Apple and the five publishers with a lawsuit
just last month for allegedly conspiring to raise prices, which violates federal antitrust laws.
Now, DOJ may sue Apple as soon as today while still working to reach a potential settlement with the five publishers, according to
. Nothing has been set in stone, but DOJ does plan to pursue Apple.
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RE: Stupid is as stupid does
4/11/2012 2:42:26 PM
Your oversimplification continues as does your offhanded dismissal of logic.
Convenience is not an "excuse". It's what's known as a "reason".
Find me a magical printed book that can leap through space and time from My Wife's Kindle to mine while I'm on business across the country. Find me an entire book store that fits in a pocket. That is what you call an excuse?
In fact I took two books with me on business. Both of them combined weighed less than 6oz. A big deal when lugging crap through airports. My wife reads a book a day sometimes but typically 'just' two a week. When we go on vacation she would have to bring a stack to heavy too even carry.
Paying more for a digital download than the real thing is exactly what this lawsuit is about. I look forward to prices going back to 1/2 or less as they were before.
And just one last point: When you buy an e-book nobody makes you sign a contract that says you can never ever buy a physical book again. There are some classics I like in hardcover on my shelf. 1984 would be one (I own a several hardback, paperback, and an electronic versions of it).
I don't think you can come to grips with people seeing the same facts and making a different decision than you. Your reaction is to dismiss their logic as emotion or deception.
Get a grip.
"I'd be pissed too, but you didn't have to go all Minority Report on his ass!" -- Jon Stewart on police raiding Gizmodo editor Jason Chen's home
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