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The Department of Justice filed an antitrust lawsuit against Apple and five major book publishers regarding e-book prices.
NEW YORK—The US Department of Justice filed an antitrust lawsuit against Apple and five major book publishers today, alleging that they colluded over e-book pricing, according to The Washington Post.
The lawsuit alleges that the publishers conspired with Apple to raise the price of e-books in order to limit competition.
Along with Apple, the lawsuit, which was filed in Manhattan federal court, named major publishers Hachette SA, HarperCollins, Macmillan, Penguin and Simon & Schuster.
"Defendants' ongoing conspiracy and agreement have caused e-book consumers to pay tens of millions of dollars more for e-books than they otherwise would have paid," the lawsuit said, according to The Wall Street Journal.
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Apple and Macmillan have denied that they colluded to raise prices, while refusing to participate in settlement talks with the DOJ, said The Post.
Politico reported that several of the other publishers have been in settlement talks with the government and could reach an agreement as early as Wednesday.
The lawsuit said the pricing structure was in response to Amazon successfully selling e-books for under $10, and came as Apple was preparing to launch the iPad into a market dominated by the Kindle, according to the Associated Press.
According to The Wall Street Journal, the publishers shifted from a "wholesale" model to an "agency" model, letting publishers set the retail price and not giving retailers any power to alter that price.
The pricing structure Apple and the publishers allegedly conspired on would have limited Amazon's ability to discount books and also called for Apple to receive 30 percent commission on each e-book it sold.
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The suit alleges that the CEOs of the named publishers met in private to discuss "confidential business and competitive matters, including Amazon's e-book retailing practices," and in January 2010 entered into contracts with Apple that were functionally identical, changing the industry permanently, reported The Wall Street Journal.
An unnamed source told Politico that the DOJ was looking for a settlement that would ensure the publishers got rid of their current agreements on pricing and began acting independently, without knowledge of the conditions and clauses imposed by the other publishers.
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