3 publishers in Apple suit settle with DOJ - KTRE.com | Lufkin and Nacogdoches, Texas

DOJ: Apple price-fixing scheme cost consumers billions

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The U.S. Justice Department has filed an antitrust lawsuit against Apple Inc. (Source: apple.com) The U.S. Justice Department has filed an antitrust lawsuit against Apple Inc. (Source: apple.com)

NEW YORK (RNN) – Three of the companies named in the U.S. Department of Justice anti-trust lawsuit against Apple reached a settlement, U.S. Attorney General Eric Holder announced.

The U.S. Department of Justice filed an antitrust lawsuit Wednesday in New York against Apple Inc. and book publishers Hachette SA, HarperCollins, Macmillan, Penguin and Simon & Schuster. It claims the publishers conspired with Apple to raise retail electronic-book prices to limit competition, AP has reported.

Holder announced at a news conference Wednesday that three of the book companies – Hachette, HarperCollins and Simon & Schuster ­– have reached settlements in the case.

"Today's action sends a clear message that the department's antitrust division continues to be open for business," Holder said.

The DOJ participated with state attorney generals in the investigation, which the department said it began in summer 2009. Seventeen states and territories are filing their own lawsuits.

The lawsuit, filed Wednesday in Manhattan, alleges that Apple and the publishing companies conspired to set a price ceiling of $9.99 to make e-books sold by Amazon look less appealing.

"Apple facilitated the publisher defendants' collective effort to end retail price competition by coordinating their transition to an agency model across all retailers," according to the complaint.

Holder's office estimated customers paid $2 to $3 more for individual e-books.

"As a result of this conspiracy, we believe that consumers paid billions of dollars more for some of the most popular titles," Holder said.

The lawsuit said the alleged conspiracy coincided with Apple's launch of its new iPad. The lawsuit alleges the deal guaranteed Apple a 30 percent commission on each e-book it sold, AP reported.

Apple did not immediately respond to an AP request for comment.

Ironically, the DOJ needed only to look as far as the biography of late Apple CEO Steve Jobs to get a tip-off on the conspiracy.

"We'll go to [an] agency model where you set the price, and we get our 30%, and, yes, the customer pays a little more, but that's what you want anyway," biographer Walter Isaacson quoted Jobs as saying.

Apple recorded record highs in the stock market earlier this year, due mainly to the highly anticipated release of the iPad.

Currently worth about $600 billion, Apple could soon be worth more than all the companies in Spain, Portugal and Greece combined, according to Business Insider. Those three are some of Europe's most debt-laden nations.

Business Insider writer Jay Yarow calls Apple's e-book business "small and insignificant" to the powerful company.

Copyright 2012 Raycom News Network. All rights reserved. The Associated Press contributed to this story.

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