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CNET News Video: DOJ announces suit against Apple, publishers over e-book pricing

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CNET News Video: DOJ announces suit against Apple, publishers over e-book pricing

2:57 /

At a press conference in Washington, D.C., Attorney General Eric Holder and Assistant Attorney General for the Antitrust Division Sharis Pozen announce the government's lawsuit against Apple and publishers for allegedly conspiring to increase prices that consumers pay for e-books. Note: Simon & Schuster and CNET are both owned by CBS.

We are alleged that executives at the highest levels of the companies included in today's lawsuits concern the eBook sellers had reduced prices work together to eliminate competition among stores selling eBooks, ultimately increasing prices for consumers. You know, as a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for a serve of the most popular titles. During regular, near quarterly meetings, we alleged that publishing company executives discussed confidential business and competitive matters including Amazon's eBook retailing practices as part of a conspiracy to raise, fix, and stabilize retail prices. In addition, we alleged that these publishers agreed to impose a new model which would enable them to cease pricing authority from bookstores, that they entered into agreements to pay Apple a 30% commission on books sold through its iBook Store, and that they promised to have contracts including the most favored nation provisions that no other book retailer would set a lower price. Now, our investigation even revealed that a CEO allegedly went so far as to encourage an eBook retailer to punish another publisher for not engaging in these illegal activities. We alleged that CEOs of the publishers bemoaned the retched 9.99 price point. One executive said that the goal is less to compete with Amazon as to force it to accept a higher level than 9.99; and yet another, we've always known that unless other publishers follow us, there's no chance of success in getting Amazon to change its pricing practices. Our complaint also quotes, Apple's then CEOs do jobs as saying the customer pays a little more but that's what you want and he's referring to the publishers, that's what you want anyway. As you can see, we allege that these executives knew full well what they were doing, that is taking steps together to make sure the prices consumer paid for eBooks were higher. I wanna stress, agreements between companies that are reached unilaterally generally are legal and appropriate; however, let me be clear, when companies get together and conspire to enter into agreements that eliminate price competition, it crosses the line; this kind of agreement is illegal and anti-competitive, and that's when the Antitrust Division will take action, and that's what we've done today.

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