The U.S. Justice Department thinks Apple went a step too far by conspiring with publishers to create fixed eBook prices and has filed an antitrust lawsuit against the company to teach it a lesson in fairness.
Even though some publishers have already settled, the company behind the iPad is disputing the charges by arguing that pricing agreements with publishers only enhanced competition in a market dominated by Amazon.
The government wants retailers to decide the prices, while Apple and companies like HarperCollins, Macmillan, Penguin and Simon & Schuster created an agency model that allowed publishers to set a price for the eBooks.
Amazon had been buying books at wholesale prices then setting a price for digital copies. Apple, on the other hand, decided in 2010 to allow publishers to determine the cost of the eBooks for the iPad — as long as the computer company got a 30% cut of the profits and the publishers agreed to sell their products for the lowest price through Apple.
It sounds to us like the Justice Department has legitimate antitrust concerns, but what about U? Team America or Team Apple?
Tags: agency model, amazon, antitrust, apple, conspired, ebook, harpercollins, ipad, justice department, kindle, lawsuit, macmillah, penguin, retailers, simon 038 schuster, united states