Apple may face e-book price-fixing lawsuit tomorrow
The Justice Department may file as early as Wednesday an antitrust lawsuit against the company over how publishers price electronic books, Reuters reports.
The U.S. Department of Justice may file an antitrust lawsuit against Apple for alleged e-book price fixing as early as tomorrow, according to Reuters.
Apple had reportedly been in talks with federal regulators but had failed to come to an agreement to settle their concerns. Along with Apple, five book publishers are also reportedly under investigation for alleged price fixing: HarperCollins Publishers, Hachette Book Group, Macmillan Publishers, Penguin Group, and Simon & Schuster. (CBS owns Simon & Schuster and CBS Interactive, which publishes CNET News.)
Apple representatives did not immediately respond to a request for comment. The Justice Department could not be reached for comment
Some of the publishers under scrutiny are expected to settle with the Justice Department this week, two unidentified people familiar with the matter told Reuters.
The probe apparently stems from changes made to how publishers charge for e-books when Apple released the first iPad two years ago. Book publishers began using an "agency model" in which publishers set their own e-book prices, rather than the traditional wholesale model in which publishers set a retail price and retailers set their own sales price.
The pricing model materialized in 2010 after book publishers asked Amazon to increase the price of e-books on its Web site, but Amazon stood firm in its contention that anything above $9.99 was too high. Amazon eventually relented after many popular Macmillan titles disappeared from the e-tailer's site.
A separate lawsuit objecting to the pricing model was filed against Apple and the publishers last year. The plaintiffs alleged that they paid higher prices for their book purchases as a result of the agency model.