U.S. Sues Apple, Book Publishers Over E-Book Prices

U.S. Sues Apple, Book Publishers Over E-Book Prices

April 11, 2012 Updated Apr 11, 2012 at 1:22 PM CDT

(Department of Justice news release) The U.S. Department of Justice announced Wednesday that it has reached a settlement with three of the largest book publishers in the United States –- Hachette Book Group, HarperCollins Publishers L.L.C. and Simon & Schuster Inc. -- and will continue to litigate against Apple Inc. and two other publishers -- Holtzbrinck Publishers LLC, which does business as Macmillan, and Penguin Group (USA) -- for allegedly conspiring to end e-book retailers’ freedom to compete on price, take control of pricing from e-book retailers and substantially increase the prices that consumers pay for e-books.  

According to the DOJ news release:

The department alleges that the publishers prevented retail price competition resulting in consumers paying millions of dollars more for their e-books.

The civil antitrust lawsuit was filed in U.S. District Court for the Southern District of New York against Apple, Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster.   At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the department’s antitrust concerns with Hachette, HarperCollins and Simon & Schuster, and would require the companies to grant retailers – such as Amazon and Barnes & Noble – the freedom to reduce the prices of their e-book titles.

“As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles,” said Attorney General Eric Holder.   “We allege that executives at the highest levels of these companies–concerned that e-book sellers had reduced prices–worked together to eliminate competition among stores selling e-books, ultimately increasing prices for consumers.”

“With today’s lawsuit, we are sending a clear message that competitors, even in rapidly evolving technology industries, cannot conspire to raise prices,” said Acting Assistant Attorney General Sharis A. Pozen in charge of the Department of Justice’s Antitrust Division.   “We want to undo the harm caused by the companies’ anticompetitive conduct and restore retail price competition so that consumers can pay lower prices for their e-books.”

Read the entire DOJ news release HERE.