The “IDG News Service” reports that a proposed settlement of the U.S. Department of Justice’s ebook price-fixing case against three large publishers would damage the U.S. publishing industry and would single out Apple for restrictions on ebook pricing, according to notes from Apple lawyers to the agency.
The proposed settlement between the DOJ and three of five publishers the agency charged in April with price fixing is “a threat to ebook competition,” lawyers for Apple wrote in comments to the DOJ. “In a misguided attempt to reshape the market according to its own preferences, the government seeks to impose a business model that will result in dramatic and long-lasting harm,” the company’s lawyers say.
In April the United States Department of Justice filed an antitrust lawsuit against Apple, Hachette SA, HarperCollins, Macmillan, Penguin and Simon & Schuster in New York district court, claiming collusion over ebook pricing. Apple and Macmillan, which have refused to engage in settlement talks with the Justice Department, deny they colluded to raise prices for digital books.
The brouhaha centers on Apple’s move to change the way that publishers charged for e-books as it prepared to introduce its first iPad in 2010. Traditionally, publishers sold books to retailers for roughly half of the recommended cover price. Under that “wholesale model,” booksellers were then free to offer those books to customers for less than the cover price if they wished.
Apple suggested moving to an “agency model,” under which the publishers would set the price of the book and Apple would take a 30% cut. However, Apple also insisted that publishers couldn’t let rival retailers sell the same book at a lower price.
Apple has publicly rejected charges that it conspired to fix prices of electronic books, calling the U.S. government’s antitrust lawsuit a “fundamentally flawed” endeavor that could discourage competition and harm consumers. In a filing in U.S. District Court in Manhattan earlier this year, Apple said it didn’t conspire with anyone or fix prices for e-books to thwart Amazon’s dominance of that market, the article adds. In fact, the company says its entry into the book market has actually fueled demand for ebooks by forcing Amazon and rivals, including Barnes & Noble Inc, to compete more aggressively, including by upgrading e-reader technology.
However, the Department of Justice has dismissed the comments from Apple and the publishers. For more info go to http://macte.ch/ivNjd and http://tech.fortune.cnn.com/2012/07/23/doj-to-apple-youre-wrong-wrong-wrong-on-e-books/ .
