Apple and publishers in e-book prices lawsuit

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The Justice Department in the United States accused Apple and five major publishers of conspiring to push up the prices of e-books and limit retail price competition.

The conspiracy has caused e-book consumers to pay “tens of millions of dollars more for e-books than they otherwise would have paid,” the Justice Department said in a lawsuit filed yesterday.

The department alleged that Apple and the publishers had a common interest in fighting online retailer Amazon’s practice of selling e-books for as little as $9.99 (£6.60) and decided to work together to raise prices.

Three of the publishers – News Corp’s HarperCollins Publishers, CBS Corp’s Simon & Schuster and Lagardere SCA’s Hachette Book Group – agreed to settle with the Justice Department. The settlement terms were not disclosed.

“To effectuate their conspiracy, the publisher defendants teamed up with defendant Apple, which shared the same goal of restraining retail price competition in the sale of e-books,” the Justice Department complaint said.

The lawsuit was filed in the US District Court for the Southern District of New York.

The Justice Department said it would proceed to litigate against Apple and two other publishers – Pearson’s Penguin Group and Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH.

Macmillan chief executive John Sargent said settlement terms demanded by the Justice Department “were too onerous.” He also said Macmillan did not act illegally and did not collude.

The European Union is also investigating allegations of conspiracy to fix the prices of e-books.

The Justice Department is said to have been looking into whether deals Apple made with the quintet of publishers at about the time it launched its iPad were done with the intent of propping up prices for e-books. Amazon had been paying publishers for the books, and then discounting them to win market share.

The publishers could not immediately be reached for comment.