Apple, publishers sued for alleged price fixing: report

Aug 13, 2011
A man navigates through the new iPad 2 during its launch in the Philippines at an Apple store. Five book publishers and computer manufacturer Apple have been sued for allegedly colluding to drive up the price of e-books, lawyers for the plaintiffs said.

Five book publishers and computer manufacturer Apple have been sued for allegedly colluding to drive up the price of e-books, lawyers for the plaintiffs said.

The class-action suit, filed in the here, claims HarperCollins, Hachette, Macmillan, Penguin and Simon & Schuster had worked with to break Internet retailer Amazon.coms discount pricing strategy and help Apples iPad compete with the Kindle marketed by Amazon.

According to the suit, the believed that Amazons popular Kindle e-reader device and the companys discounted pricing for e-books would increase the adoption of e-books, and feared Amazons discounted pricing structure would permanently set consumer expectations for lower prices, even for other e-reader devices.

"Fortunately for the publishers, they had a co-conspirator as terrified as they were over Amazons popularity and pricing structure, and that was Apple," said Steve Berman, an attorney representing consumers.

"We intend to prove that Apple needed a way to neutralize Amazons Kindle before its popularity could challenge the upcoming introduction of the iPad, a device Apple intended to compete as an e-reader," Berman added.

The complaint claims that the five publishing houses forced Amazon to abandon its discount pricing and adhere to a new agency model, in which publishers set prices and extinguished competition so that retailers such as Amazon could no longer offer lower prices for e-books.

A woman holds the new Amazon Kindle 2 at its launch in New York City. Five book publishers and computer manufacturer Apple have been sued for allegedly colluding to drive up the price of e-books, lawyers for the plaintiffs said.

If Amazon attempted to sell e-books below the publisher-set levels, the publishers would simply deny Amazon access to the title, the complaint claims.

The defendant publishers control 85 percent of the most popular fiction and non-fiction titles.

According to the lawsuit, Apple and publishers were concerned that Amazons $9.99 uniform pricing for bestsellers would create market pressures for other e-booksellers -- including Apple -- to do the same, cutting into profitability.

The named plaintiffs included Anthony Petru, a resident of Oakland, California, and Marcus Mathis, a resident of Natchez, Mississippi.

The law firm Hagens Berman, which posted the complaint on its website, announced the filing of the suit on August 9.

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Techno1
4.2 / 5 (5) Aug 13, 2011
This is disgraceful anyway.

Paperbacks used to sell for $6.99 to $7.99, though I haven't checked in a while.

At any rate, buying a digital copy of a book for even $9.99 is robbery. Clearly, 1's and 0's don't cost much of anything, particularly since people pay so much for the "Reader" anyway.

The IT companies and publishers are just taking the Jetson's technology, and instead of using it to liberate people, they've turned it into another excuse to fleece everyone.
Gezza
not rated yet Aug 14, 2011
Yet another example of Apples bully boy tactics. Its time the Rotten Apple got put in the compost bin.
Magnette
not rated yet Aug 15, 2011
"We intend to prove that Apple needed a way to neutralize Amazons Kindle before its popularity could challenge the upcoming introduction of the iPad, a device Apple intended to compete as an e-reader," Berman added.

That's the sort of business approach and ethics that will drive Joe public straight to Amazon and their Kindle.

Price fixing is illegal within the UK, is it the same for the U.S?
2020
1 / 5 (1) Aug 15, 2011
"We intend to prove that Apple needed a way to neutralize Amazons Kindle before its popularity could challenge the upcoming introduction of the iPad, a device Apple intended to compete as an e-reader," Berman added.
That's the sort of business approach and ethics that will drive Joe public straight to Amazon and their Kindle.
Price fixing is illegal within the UK, is it the same for the U.S?

...yes, it is the same.
The problem I see here is that the Apple iPad did not THEN yet exist, but several different eReaders did AND Apple kept the pricing that existed in the common marketplace. Further Apple's history would indicate a firm that 'got in trouble' in other industries for keeping the prices low (Record/music sales) not raising prices.
Nevertheless, if this is true and proven then they should all be spanked.
word-to-ya-muthas