(The Hosting News) – Tech giant Apple is among a group of companies that allegedly squelched competition in the E-book market, according to a recent lawsuit filed on behalf of the U.S. Department of Justice.
According to the DOJ, Apple allegedly entered into contractual agreements with five publishers including HarperCollins and Simon & Schuster to substantially increase pricing for digital book downloads – a move the department says squelched competition and cost consumers millions.
“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,” commented U.S. Attorney General Eric Holder in a press release regarding the matter.
Before the move, consumers regularly paid $9.99 for titles. However, as the department alleges, the companies’ model saw a market where prices were upped to around $12.99 to $14.99 or even higher. One of the conspiracy’s highlights included the publishing companies’ agreement to provide Apple with a 30% commission from every title sold through the tech giant’s iBookstore.
The DOJ stated that those involved “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.”
“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,” continued the DOJ’s release regarding the matter.
Meanwhile, a settlement has already been reached with three of the publishers initially listed in the suit including Hachette Book Group, Simon & Schuster and HarperCollins. Settling requires the companies to terminate their agreements with Apple and prevents them from sharing data pertaining to competition with one another for a five year time span.
Handling the matter is the DOJ’s Antitrust Division and the case itself was filed in the U.S. District Court for the Southern District of New York. For more information regarding the matter, view a press release from the U.S. Department of Justice here (justice.gov).