Not too surprisingly, the five major publishers originally named in the U.S. Department of Justice’s e-book case regarding their collusion with Apple on pricing have now themselves filed a complaint regarding the Justice Department’s proposal to eliminate the use of the agency model in any Apple agreements with publishers for a period of five years.
Publishers like the agency model as it allows them to set prices for e-books, instead of the distributor, as Amazon did before Apple’s own iBooks system launched on the iPad.
Apple has already slammed the proposal as draconian and punitive, but this is the first time the publishers have weighed in on the matter.
“The provisions do not impose any limitation on Apple’s pricing behavior at all; rather, under the guise of punishing Apple, they effectively punish the settling defendants by prohibiting agreements with Apple using an agency model,” said publishing house lawyers.
The Justice Department argued that, as the driving force behind the collusion, Apple used the fact that publishers weren’t happy with Amazon’s practice of pricing most e-books at $9.99, regardless of the publishers’ price points for paper copies. When Apple made agreements with the five major publishing houses, letting them set their own—usually higher—prices, the DOJ claimed, they caused e-book prices to rise.
HarperCollins, Hachette, Simon & Schuster, Penguin Random House, and Macmillan all settled with the court ahead of trial, leaving Apple as the sole defendant in the case. US District Judge Denise Cote found that Apple had colluded with the five named publishing houses to raise the price of electronic books. Apple plans to appeal the decision.
Source: The Wall Street Journal