Apple, publishers sued for alleged price fixing: report

August 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.

Explore further: Amazon.com to capitulate to Macmillan price demand

Related Stories

Amazon strikes twin electronic book deals: WSJ

April 1, 2010

Amazon.com is letting two more major publishers raise prices of electronic books for Kindle readers in deals struck just days before Apple releases rival iPad computer tablets, the Wall Street Journal reported.

Macmillan books coming back to Amazon

February 6, 2010

(AP) -- After a weeklong absence, new copies of Andrew Young's "The Politician," Hilary Mantel's "Wolf Hall" and other books published by Macmillan are available for purchase on Amazon.com.

Amazon shares slip; Macmillan titles still missing

February 1, 2010

(AP) -- Amazon.com continued to withhold sales of books published by Macmillan on Monday, the result of a pricing dispute that helped knock shares in the online retailer down more than 5 percent.

Books pulled from Amazon.com in pricing dispute

January 30, 2010

(AP) -- New copies of Hilary Mantel's "Wolf Hall," Andrew Young's "The Politician" and other books published by Macmillan were unavailable Saturday on Amazon.com, a drastic step in the ongoing dispute over e-book prices.

Recommended for you

Your (social media) votes matter

January 24, 2017

When Tim Weninger conducted two large-scale experiments on Reddit - otherwise known as "the front page of the internet" - back in 2014, the goal was to better understand the ripple effects of malicious voting behavior and ...

Protective wear inspired by fish scales

January 24, 2017

They started with striped bass. Over a two-year period the researchers went through about 50 bass, puncturing or fracturing hundreds of fish scales under the microscope, to try to understand their properties and mechanics ...

'Droneboarding' takes off in Latvia

January 22, 2017

Skirted on all sides by snow-clad pine forests, Latvia's remote Lake Ninieris would be the perfect picture of winter tranquility—were it not for the huge drone buzzing like a swarm of angry bees as it zooms above the solid ...

Singapore 2G switchoff highlights digital divide

January 22, 2017

When Singapore pulls the plug on its 2G mobile phone network this year, thousands of people could be stuck without a signal—digital have-nots left behind by the relentless march of technology.

Making AI systems that see the world as humans do

January 19, 2017

A Northwestern University team developed a new computational model that performs at human levels on a standard intelligence test. This work is an important step toward making artificial intelligence systems that see and understand ...

4 comments

Adjust slider to filter visible comments by rank

Display comments: newest first

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

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.