Apple to fight on in e-book price-fixing 'cartel' case

Apple to fight on in e-book price-fixing 'cartel' case

Summary: Apple, along with two other major international publishers, may avoid settling in a "cartel" e-book fixing antitrust investigation, while others seek a faster resolution.

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While three accused publishers involved in a joint U.S. and EU antitrust investigation into "cartel" behaviour are reportedly close to reaching a settlement, Apple and two others may fight the claims.

Apple, along with the five named publishers, are accused of collaborating and conspiring to 'fix' e-book prices in a bid to undercut arch-nemesis Amazon, which has a different model for pricing the downloadable books.

The Wall Street Journal, citing sources in the know, say that the shiny rectangle maker Apple, and publishers Macmillan and Pearson are "reluctant" to follow suit with other publishers that hope to settle the matter before a formal antitrust investigation begins.

The remaining publishers include News Corp.-owned HarperCollins, Lagardere’s Hachette Livre, CBS-owned Simon & Schuster (ZDNet and Simon & Schuster are both owned by CBS), and are all expected to settle.

EU Competition Commissioner Joaquin Almunia said that the companies involved "know very well" under which conditions the European authorities were willing to settle, but warned: "If our conditions cannot be met in a satisfactory way, we will continue our investigation."

Amazon’s 'wholesale' pricing model ultimately allows for greater flexibility to e-book authors and sellers, allowing them to price what they like for their work --- even at a loss.

Apple's 'agency model' takes a 30 percent cut of each sale, but is accused of dodgy dealings with the publishers as part of its efforts to undermine Amazon's dominant place in the market.

While the U.S. Department of Justice is taking the heavy-handed approach and warned Apple et al to "prepare" for lawsuits, the European Commission was set to seek the easier option of settling the case, which could impose conditions on their business practices for a set period.

But by doing so, the companies would be admitting defeat, and most significantly, guilt.

European antitrust authorities began an investigation into the alleged practices after an investigation by UK trading authorities. If Apple and others are found in breach of European antitrust laws, they could face a 10 percent global annual turnover fine, which could run collectively into the tens of billions of dollars.

Apple was down 0.8 percent at market close, while e-book rival Amazon was down by 2.8 percent. Barnes & Noble closed at 2.2 percent down, and publisher Pearson closed 1.4 percent down. CBS Corp. and News Corp. were down by 2.5 percent and 2.6 percent respectively.

Image source: CNET.

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9 comments
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  • This is going to expand

    I bet thesis standard fair with every type of media for Apple and I could see other areas coming in to question for Apple.
    slickjim
    • Based on what?

      Admittedly I am not following this case but you have not provided any evidence to back up your claim. Of course just as you claim this is standard for Apple not backing up claims against them is standard for you so I shouldn't be surprised.
      non-biased
  • You are...

    You are pricing it wrong.
    Droid.Incredible
  • And so it begins

    These anti-trust agencies just love going after the top dog. They can smell the money. That is the price you have to pay to be #1. Just like MS was unfairly targeted when it was #1, now it is Apple's turn.
    toddbottom3
    • How dare they pick on Apple!

      Right! How dare they go after Apple! Those bullies, chasing after a poor, defenseless....predatory, ruthless, pitiless, multi-BILLION dollar corporation!

      They go after the big boys because that's how the big boys got big: By stepping over the little boys in violation of the law. Witness Standard Oil, AT&T, IBM, Microsoft--yes--and now Apple.
      ochabge
  • Been Awaiting This ...

    With the Apple and Publisher change, my ebook consumption dropped significantly as the overall cost skyrocketed.
    To this day, using my membership discount, I can generally get most just released hardcovers and paperbacks from a B&N store for less than the ebook price from Amazon, B&N, Google or iBooks. For the rest, the price is generally the same.
    rhonin
  • Apple to fight on in e-book price-fixing cartel case

    How about government treats ebooks the same as physical books!
    How can it be proper that hard back books, bt i.e. Simon Scarrow (The Gladiator) are cheaper in total as hard back with no draconian restrictions than download
    redlandscv
  • Time to reset the pecking order.

    Here's a good way to start:

    http://www.youtube.com/watch?v=tU4L70m43So
    BabySealClub0
  • If you want to play in MY box, you must play by MY Rules

    From what I can glean from the reports Apple stated to the PUBLISHERS that if you WANT to sell books in the App Store then you MUST charge new higher prices - since WE get 30% of the sale in order for you to make the same amount of money, the authors and for US to make what our shareholders expect us to make, you have to raise your prices.

    The book publishers could FREELY not sell their books through Apple and just continue to sell elsewhere - Apple did not FORCE them to sell - they just set a condition of selling - perfectly legal - that any had to meet in order to do so.

    This is NO different than a Government saying you MUST pay X amount for a business license if you want to SELL something in a store.

    Apple stated that they want to make AT LEAST 3.33 per each book they sell - so you HAVE to sell at $9.99 your book - or again do not bother to sell through if you are unwilling to do so.

    The DOJ is reaching on this one but they have to make an APPEARANCE of protesting Apple for PR sake. Remember DOJ does a lot of things just for apparance sakes not for any legal reasons cause they want to look good for the administration (for whomever party is currently in power. - since it is A POLITICAL decision 60% of the time to pursue a company.
    tom@...