States start filing individual lawsuits against e-book publishers

States start filing individual lawsuits against e-book publishers

Summary: Texas and Connecticut are leading a ring of more than a dozen states in an anti-trust suit against Apple and a few other book publishers over an "anti-competitive price-fixing scheme."

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The battle over e-book pricing is getting even more heated as several states are joining together to file their own lawsuit against the major publishing houses.

Leading the way at the moment are the attorney general offices in Connecticut and Texas. Other local governments getting in on the action are Alaska, Arizona, Colorado, Illinois, Iowa, Maryland, Missouri, Ohio, Oregon, Pennsylvania, South Dakota, Tennessee, Vermont and West Virginia and the Commonwealth of Puerto Rico.

The targets of the lawsuit are Apple along with its so-called "cartel" of e-book publishers, which now consists of Macmillan, Penguin, and CBS-owned Simon & Schuster. (For reference, ZDNet is also owned by CBS.)

In a statement published on Wednesday afternoon, Connecticut Attorney General George Jepsen explained the motivation behind this particular anti-trust lawsuit, filed in U.S. District Court in Texas:

The states’ complaint alleges that the defendants conspired to raise eBook prices. For years, retailers sold eBooks through a traditional wholesale distribution model, under which retailers – not publishers – set sales prices for eBooks. However, the states’ investigation found that Macmillan, Penguin and Simon & Schuster conspired with other publishers and Apple to artificially raise prices by imposing a distribution model in which the publishers set the prices for bestsellers at $12.99 and $14.99.

The complaint alleges that when Apple prepared to enter the eBook market, the publishers and Apple agreed to adopt an agency distribution model as a mechanism to allow them to fix prices. To enforce their price-fixing scheme, the publishers and Apple relied on contract terms that forced all eBook outlets to sell their products at the same price. Because the publishers agreed to use the same prices, retail price competition was eliminated.

Jespen acknowledged in the statement that "publishers deserve to make money, but consumers deserve the price benefits of competition in an open and unrestricted marketplace."

So far, Jespen and Texas Attorney General Greg Abbott were able to reach agreements with two other publishers: HarperCollins and Hachette.

Earlier today, the U.S. Department of Justice announced a civil lawsuit of its own in the Southern District of New York against Apple and all of the five aforementioned major international publishers for allegedly conspiring to fix the price of e-books in the face of resellers, such as Amazon and Barnes & Noble.

However, Hachette, HarperCollins and Simon & Schuster have all already agreed to a proposed settlement.

via TeleRead

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Topics: Mobility, Hardware, Legal

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4 comments
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  • greedy apple will bite the dust!

    the next M$ wana be is getting the right treatment!
    LlNUX Geek
  • "Have agreed to a settlement?"

    So... They agreed to a settlement... Does that mean that they are going back to the old system, or are they going to just pay a yearly penalty to continue to shaft us like Pepsi and Coke did/does with their "zero calorie" claims on diet colas?

    Yes, I know that the calorie thing is a myth, but I have no doubt that the publishers would rather pay a yearly fine than lose out on the income that they're raking in from the price fixing.
    Zorched
  • Publishers are the equivalent of Music Industry Companies

    It's time for publishers to change their business model. Amazon and the internet in general make it possible for authors to self-publish AND have success and popularity. They see this coming, so this little scheme was to try and perpetuate their high incomes -- it's time for them to realize they are no longer essential, and the public is not the stupid little sheep they think we are. We have them pegged for what they are: just another group of leeches of society. We know it's way cheaper to publish e-books, and if they want to stay in the game, they need to set prices by the new paradigm.
    gerriel
  • digital publishing software

    Everyone are trying to make income whether they are publishers or distributors by raising the prices of eBooks. They are only making money.


    <a href="http://www.epublish4me.com/">digital publishing software</a>
    aazhan