It’s Official, Apple Sued by U.S. Justice Department over Alleged e-Book Price Fixing
We’ve said before that it’s no surprise that Apple often finds itself on the receiving end of lawsuits. When it’s public knowledge that you’re stock-piling cash in the billions, who isn’t going to try and grab a chunk? That said, this latest lawsuit—which pertains to the alleged price-fixing of ebooks—carries a lot more weight seeing as it comes from the U.S. Justice Department… The government filed its suit on Wednesday, and Apple now joins a group of publishers rushing to respond.
As you’ll recall from when this storm started brewing back in March, Apple is suspected of colluding with certain publishers to upset the Amazon system and institute something called the “agency model.” As Steve Jobs himself explained in the biography by Walter Isaacson, the agency model meant that publishers would set the price, and Apple would sell the books at that amount and then take 30%. This differed from the Amazon model, in which books were sold by the publishers at wholesale, and then the booksellers set their own prices… Once Apple started pushing the agency model, it’s said by the DoJ that publishers were able to pressure Amazon into doing the same—which ultimately meant higher (fixed) prices for customers.
As much as my heart breaks for Apple as they’re getting sued (not really), I’m all for this lawsuit if it means seeing more reasonable prices in iBooks. As it stands, I love using my iPad for reading, but only rarely can convince myself to drop top dollar for an ebook. It just feels wrong.
The government lawsuit has already resulted in settlements from Harper-Collins, Hachette, and Simon & Schuster… There is no word on Apple’s course of action, though the company has reportedly refused to take part in settlement discussions.