Apple Accused Of Rigged E-Book Prices

The U.S. Justice Department is set to decide if Apple and the publisher Macmillan conspired to raise prices for e-books. Both companies refused to engage in settlement talks with the Justice Department and preferred to face the antitrust lawsuit.

Apple is accused of signing agreements with the publishers in order to change the way e-books for iPads are priced.

Is is also suspected of changing the game in the e-book industry to put up a fight with the market leader, Amazon. Apple and Macmillan agreed to defend the agency model that enables the publishers to set a price for e-books and not the vendors, like Amazon.

On the other hand, Apple enjoys a so-called most-favoured nation clause that allows it to benefit from the lowest e-book prices for iPad.

Other publishers besides Macmillan, Simon & Schuster, Lagardère SCA's Hachette Book Group and News Corp's HarperCollins took steps to avoid the legal war. They are expected to reach settlements with the Justice Department shortly.

Since the matter is still open, the representatives of the five publishers who avoided lawsuits are reluctant to talk to the media about the situation.

Source: BusinessWeek