Department of Justice reportedly planning antitrust suit against Apple
According to a Wall Street Journal Report, the Department of Justice is threatening to sue Apple and five book publishers for artificially inflating the price of ebooks. The five book publishers include Simon & Schuster, Hachette Book Group, Pearson PLC's Penguin Group, Macmillan and HarperCollins Publishers, Inc.
The investigation centers on Apple's agency model pricing for ebooks in the iBookstore. Instead of a wholesale model that Amazon was using, Apple pushed for an agency model which let publishers set book prices and Apple would take a 30 percent cut.
Amazon, however, was using a wholesale model which let them sell books for $10 or less. This pricing model was upsetting to publishers who were concerned customers would get used to the low prices. Publishers used Apple's agency model agreement to strongarm Amazon into adopting the same pricing model and it agreed. As a result, ebook prices on Amazon's Kindle store increased.
According to a Wall Street Journal Report, the Department of Justice is threatening to sue Apple and five book publishers for...
Subscribe to Newsletter
Software Updatesmore updates
- Findery app lets you discover the world around you using annotated notes and maps
- The Learnist app brings its crowd-sourced collection of information to your iPhone
- My cat Cinnamon reviews Friskies Cat Fishing 2
- Photo Grid Collage Maker is capable and free
- iExit gets new features and is now free
- Dragon Dictate 4 released today with new features and speed enhancements