Apple, publishers sued for alleged price fixing: report

Publishers were said to have worked with Apple to break Amazon.com's strategy
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.

The publishers were said to have forced Amazon to abandon its discount pricing
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.


Explore further

Amazon.com to capitulate to Macmillan price demand

(c) 2011 AFP

Citation: Apple, publishers sued for alleged price fixing: report (2011, August 13) retrieved 24 January 2020 from https://phys.org/news/2011-08-apple-publishers-sued-alleged-price.html
This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no part may be reproduced without the written permission. The content is provided for information purposes only.
0 shares

Feedback to editors

User comments