The U.S. government has sued Apple and the major book publishers today on claims of collusion and anti-trust in the ebook market.
Hachette SA, HarperCollins, Macmillan, Penguin and Simon & Schuster were all sued in New York district court, with Simon & Schuster, Hachette and HarperCollins already settling their suits.
Apple and Macmillan have refused to settle with the Justice Department and deny they had any part in colluding on the price of digital books. Both have agreed to argue "that pricing agreements between Apple and publishers enhanced competition in the e-book industry," an industry which used to be ruled by Amazon totally.
The Justice Department is looking into how Apple got publishers to change the way they charged for e-books. Before the iPad, Amazon sold ebooks for a lot cheaper than they currently sell for and prices were mixed whereas they are now standardized with little flexibility. This new model is called the "agency model," which only gives publishers, not the vendors, the ability to set ebook prices.
In their suit, the government is looking for a settlement that will allow Amazon and other retailers to get back on the "wholesale model," where they can decide what to charge their customers.
Apple and Macmillan have refused to settle with the Justice Department and deny they had any part in colluding on the price of digital books. Both have agreed to argue "that pricing agreements between Apple and publishers enhanced competition in the e-book industry," an industry which used to be ruled by Amazon totally.
The Justice Department is looking into how Apple got publishers to change the way they charged for e-books. Before the iPad, Amazon sold ebooks for a lot cheaper than they currently sell for and prices were mixed whereas they are now standardized with little flexibility. This new model is called the "agency model," which only gives publishers, not the vendors, the ability to set ebook prices.
In their suit, the government is looking for a settlement that will allow Amazon and other retailers to get back on the "wholesale model," where they can decide what to charge their customers.
