Apple says eBook price fixing claims 'simply not true'

Published Apr 13 2012, 11:17 BST  |  By Andrew Laughlin

Apple has rejected the US Justice Department's allegations that it colluded with publishers to fix the prices of eBooks, branding the claims "simply not true".

This week, the US government took Apple and five book publishers to court over claims that they conspired to fix the prices of electronic books after the release of the iPad in 2010.

Three of the publishers - thought to be Simon & Schuster, Hachette and HarperCollins - are understood to have settled the case, potentially leading to cheaper prices for consumers.

However, Apple denies the charges and claims that it launched its own eBook store alongside the original iPad to provide competition for market leader Amazon. Macmillan and Penguin Group are thought to hold the same position.

"The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry," Apple spokeswoman Natalie Kerris told the Wall Street Journal.

The dispute is primarily over how eBooks should be sold. Apple, Penguin and Macmillan are understood to favour the 'agency' model, in which prices are set by publishers, while 'distribution' platforms take a cut of sales, in Apple's case - 30%.

However, the US government feels that the 'wholesale' model, in which Amazon and other retailers decide what to charge, is better for consumers and increases competition.

But Kerris defended the agency pricing structure, saying that it is in line with Apple's approach to mobile apps and games, along with music on iTunes.

"Just as we have allowed developers to set prices on the App Store, publishers set prices on the iBookstore," she told the newspaper.

The Department of Justice has claimed that before 2010, the publishers named in the suit met and "discussed the growth of e-books and complained about Amazon's role in that growth".

The Department of Justice said that the publishers "saw the rise on e-books, and particularly Amazon's price discounting, as a substantial challenge to their traditional business model [and] feared that lower retail prices for e-books might lead eventually to lower wholesale prices for e-books [and] lower prices for print books".

According to the DoJ, the publishers then "teamed up with Apple, which shared the same goal of restraining retail price competition".

> Apple denies eBook price fixing conspiracy claims