The latest class action lawsuit against Apple has been filed by law firm Hagens Berman and accuses Apple and five major publishers of conspiring to raise the price of ebooks.
According to the lawsuit, Amazon’s incredibly low ebook prices, which are designed to drive sales of its Kindle e-reader, may have led consumers to believe that this is how all ebooks would be priced. However, Apple and the major publishers named in the suit have allegedly conspired to raise ebook prices significantly over those offered by Amazon under the “agency model.”
Under the agency model, according to TUAW, ebooks are sold directly to consumers rather than having a retailer act as the middle-man, and revenues from sales are split — in Apple’s case, it receives 30% of all books sold through its iBookstore.
However, Apple’s higher prices means that rivals like Amazon are unable to offer cheaper ebooks. TUAW explains, but doesn’t necessarily agree:
The suit alleges that Apple’s pushing of the agency model has meant that competitors like Amazon are now unable to price ebooks lower than Apple’s set prices, which has resulted in driving the price of ebooks higher than ever before — in some cases, electronic media is more expensive than traditional printed copies. We’ve looked at iBookstore pricing before, but the situation in 2010 didn’t seem to reflect what’s described in this suit. The price of ebooks certainly isn’t higher than the cost of printed copies in many non-US countries, either; in New Zealand, I could buy three ebooks off the US iBookstore for the cost of one trade paperback from a brick-and-mortar retailer. That pricing situation is the same or worse in the UK and Australia.
Hagens Berman says “the lawsuit seeks damages for the purchase of e-books, an injunction against pricing e-books with the agency model and forfeiture of the illegal profits received by the defendants as a result of their anticompetitive conduct, which could total tens of millions of dollars.”
Do you think they have a case here?