The Department of Justice sued Apple and five of the world’s largest book publishers on Wednesday, alleging that they colluded to increase the price of ebooks and cost consumers “tens of millions of dollars”.
The complaint, filed in the Southern District of New York, alleges that Apple and publishing executives agreed on a common response to Amazon’s pricing policy over phone calls, emails and meals in the “private dining rooms of upscale Manhattan restaurants”. Amazon, which had challenged the industry with a maximum ebook price of $9.99, is not named as a defendant…
The DoJ alleged that Apple and the publishers raised the price of best-selling titles $2 to $5 each by introducing, at the same time Apple launched its iPad tablet, an “agency” business model in which publishers set retail prices. Apple’s insistence on a “most favoured nation” clause in which publishers agreed not to sell on cheaper terms elsewhere – while giving Apple a 30 per cent commission on every sale – forced other retailers to adopt the same terms, the DoJ added… (more)
EDITOR: It sure sounded like restraint of trade when we first read about the arrangement. Good to see the Justice Department doing its job…for a change. After all, it is the theat of suit, not actually bringing action, that helps attract political contributions!
