The Justice Dept. today filed an antitrust suit against Apple and five publishers, charging they colluded to raise prices in the e-book market.
Attorney General Eric Holder told a press conference the companies “worked together to eliminate competition among stores selling e-books, ultimately increasing prices for consumers.” He believes that collusion costs consumers millions of dollars.
The suit alleges the defendants schemed to raise prices to punish Amazon’s move in 2007 to sell their books for $9.99.
The lawsuit claims the late Apple CEO Steve Jobs orchestrated the pricing plan urging the publishers to see if “we can make a go of this to create a real mainstream e-books market at $12.99 to $14.99.”
HarperCollins, Hachette, Macmillan, Penguin and Simon & Schuster are named in the suit. A proposed settlement has been ironed out with Hachette, HC and S&S.
Under that deal, the publishers would offer Amazon and Barnes & Noble the freedom to reduce prices on their e-titles and sever their “most-favored nation” agreements with Apple’s iBookstore and other e-book retailers.
The trio also will not constrain retailers from offering discounts during the next two years and are prohibited from sharing competitive data with other for five years.
Apple, MacMillan and Penguin have denied wrongdoing. MacMillan said it had entered negotiations to settle the suit, but found the Justice Dept. demands were “too onerous.”