(Ping! Zine Web Hosting Magazine) – Agreements between tech giant Apple and top publishers allegedly cost e-book consumers millions, the U.S. Department of Justice alleged in a suit detailed Wednesday.
According to the DOJ, e-book prices initially set for around $9.99 substantially increased by a few dollars after Apple entered into a conspiracy with companies including HarperCollins and Simon & Schuster starting during the summer of 2009.
“We allege that executives at the highest levels of these companies–concerned that e-book sellers had reduced prices–worked together to eliminate competition among stores selling e-books, ultimately increasing prices for consumers,” explained U.S. Attorney General Eric Holder in a press release regarding the matter.
One of the key parts of the deal included an agreement by publishers to pay Apple a 30% commission for every title sold through the company’s iBookstore.
So exactly how did the matter work? The DOJ says the companies “accomplished their conspiracy by agreeing to stop the longstanding practice of selling e-books, as they long sold print books, on wholesale to bookstores, and leaving it to the bookstores to set the price at which they would sell the e-books to consumers.”
The department continued, “Through their conspiracy, the companies imposed a new model under which the publishers seized e-book pricing authority from all of their retail bookstores and raised prices for e-books.”
The case itself was undertaken by the Department’s Antitrust Division and is being handled in the U.S. District Court for the Southern District of New York. Despite the move, the department additionally announced that it had already settled with three of the publishers named including HarperCollins, Simon & Schuster and Hachette Book Group. For more information on the matter, view a press release by the DOJ here (justice.gov).