U.S. Justice Department Files Lawsuit Against Apple
The U.S. Justice Department had filed a lawsuit against Apple, Hachette SA, HarperCollins, Macmillan, Penguin, and Simon & Schuster in the New York District Court claiming that they have been colluding on e-book price fixing. Simon & Schuster, HarperCollins, and Hachette is rumored to have settled their lawsuits, but Apple and Macmillan refused to engage in settlement talks.
Apple and Macmillan would most likely argue that the pricing agreements between Apple and the publishers would have enhanced the competition in the e-book market, which was being dominated by Amazon.com. The Justice Department is investigating how Apple came up with the ways that e-books are being charged on the iPad.
Apple, Penguin, and Macmillan have been pushing to protect the agency model, which allows the publisher set the e-book prices rather than the vendors. The government is pushing for a wholesale model where retailers can decide what to charge customers.This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry