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Apple speaks on e-books price-fixing lawsuit

Apple Unveils Updated iPad In San Francisco

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Apple CEO Tim Cook speaks during an Apple product launch event at Yerba Buena Center for the Arts on March 7, 2012 in San Francisco, California.

Apple has made its position known in an e-books price-fixing lawsuit that the Department of Justice filed against it and, originally, five big publishers, but now just two (three have already settled). And its position is pretty clear:

The DOJ's accusation of collusion against Apple is simply not true. The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry. Since then customers have benefited from ebooks that are more interactive and engaging. Just as we've allowed developers to set prices on the App Store, publishers set prices on the iBookstore.

The DOJ claims that Apple and various publishers colluded to get the industry to switch from retail pricing (where book sellers like Amazon set ebook prices) to the agency model, where the publishers themselves determine ebook prices. The DOJ alleges that the publishers and Apple made the switch in tandem to combat Amazon's dominance and its $9.99 price point for the vast majority of ebooks it sold.

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Apple e-book price-fixing lawsuit reveals Cupertino's weakness

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E-books cost more here.

Apple and a couple of holdout publishers have been hit by a Department of Justice lawsuit accusing them of colluding to fix e-book prices at a level higher than Amazon's flat $9.99 rate for the Kindle reader and other devices. The practice, which was allegedly timed to happen when the original iPad was released, allowed publishers to set the price at as much as $14.99, with Apple taking its customary 30 percent cut.

This is from the Wall Street Journal:

The government's lawsuit, filed in Manhattan federal court, described CEO-only meetings of publishers at which the alleged conspiracy was hashed out. The suit alleged that the publishers' chief executives met starting in September 2008 or earlier "in private dining rooms of upscale Manhattan restaurants" and "no legal counsel was present at any of these meetings."

The suit describes the shift from the traditional "wholesale" pricing model, under which retailers set the price of both electronic and physical books, to an "agency" model under which publishers set the price and retailers take a commission.

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