Apple sued over e-book pricing

The US government has filed an antitrust lawsuit against Apple and a number of publishers – including Hachette SA, HarperCollins, Macmillan, Penguin and Simon & Schuster – for allegedly colluding over e-book pricing.

According to Bloomberg, Apple and Macmillan have thus far refused to conduct settlement talks with the Justice Department, as both industry heavyweights continue to deny the allegations, claiming that pricing agreements actually helps enhance competition in the lucrative e-book space.

Similarly, Penguin Group (PNGN)is also preparing to fight DoJ charges in court. 

In contrast, Simon & Schuster, Lagardère SCA’s Hachette Book Group and HarperCollins are hoping to avoid a costly legal battle and could settle as soon as today.

As noted above, Apple, Penguin and Macmillan are interested in protecting the current ebook paradigm under which publishers, rather than vendors, set e-book prices. However, the US DoJ wants a settlement that would allow Amazon and other retailers return to a wholesale model, where retailers determine the amount customers should be charged.

The Justice Department has been concerned about changes to the e-book pricing model since the release of Apple’s iPad two years ago. Previously, publishers tended to sell to retailers at a fixed price, with retailers setting their own price. But after a dispute with Amazon, which tried to insist on keeping prices below $9.99, there was a shift to an agency model. This saw Apple allowing publishers to set their own prices, but taking a cut itself.