Class Action Lawsuit Says Apple Is Conspiring To Raise E-Book Prices

Class Action Lawsuit Says Apple Is Conspiring To Raise E-Book Prices

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?

  • Barton Lynch

    so stupid

  • Steve Hall

    Actually, the suit claims that Apple and the five publishers already conspired; your headline is incorrect. And oh yes, this suit has merit. In fact, this suit, while it could hurt Apple if it succeeds, could conceivably sound the death knell for the print publishing industry as we know it. Put that in the “you reap what you sow” category, though. 

    Few industries in the world are as hidebound and resistant to change as publishing (and newspapers, but that’s not quite on topic). That resistance is embodied in this class-action suit, and it’s not at all surprising that Apple may have been caught with its corporate hand in the publishing cookie jar. 

    It seems Apple may be as nefarious as the competitors it keeps suing…for being nefarious.

  • lsl31
  • An(ti)droid

    I just bought a book from B&N yesterday and the book price was $7.99, where on the iBook Store the price was $12.99.  So yes in some cases the book prices are higher.

  • SbMobile

    Last time I checked Apple’s book prices were higher than Amazon’s, so how are they hurting their business? According to Amazon, the Kindle sells well (BS) & they have better pricing & access to all book publishers, where Apple does not. Plus, everyone loves black & white ink over everything else. By your logic, Apple is colluding with other publishers by pricing their books higher than Amazon’s, forcing consumers to buy more expensive books??! Consumers will eventually realize that the iOS book experience makes Amazon’s or other e-books look like a sad joke, especially when more publishers sign on. But I think Amazon realizes this also & is just being proactive instead waiting around for the inevitable losses down the road. If one of my primary business’ was selling books & I just watched “Border’s” go out of business, I’d be worried too! Oh well! Apple slays another company! They’re leaving a real “bloodbath” in the streets.  lol

  • SbMobile

    Just another company totally “frazzled” by Apple’s success. More blood in the streets. Apple promised a “river” of blood if these guys got in their way & they haven’t disappointed. I can’t wait to compile the list of “dead” companies Apple has executed or stomped on in the last 5 years. It will be quite long.

  • Susan Cassidy

    Under the Agency model, no ebook can be priced differently at any store, so if a book is cheaper at the iBooks store, it is not an Agency ebook.

    eBooks which used to be priced at 9.99 US, or lower, are now priced at 12.99 to 14.99, which is ridiculous.

  • SiberTater

    iBooks lost my confidence when I lost my iTunes library twice in one month and it wouldn’t backup from my TimeMachine.  I have rebuilt my iTunes library twice.  I will continue using my Kindle and Kindle app instead of iBooks.  Just sayin’.

About the author

Killian BellKillian Bell is a staff writer based in the U.K. He has an interest in all things tech and also covers Android over at CultofAndroid.com. You can follow him on Twitter via @killianbell.

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