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Apple sued over ebook price scheme

Apple has been sued by the US Department of Justice, over allegations that it colluded with a number of major publishers to raise the price of ebooks for customers.

Five major publishers have also been sued by the Department of Justice (DoJ) for actively increasing the price of ebooks to try and usurp Amazon.

The DoJ alleges that executives from the publishers met with Apple to discuss a response to Amazon’s low-cost ebook prices.

The online retailer introduced a maximum ebook price of $9.99 in the US, which the lawsuit alleges publishers and Apple were keen to challenge.

Apple boosted price of ebooks

The lawsuit says that Apple and the publishers raised the price of the most popular titles by $2 to $3 in a three day period, costing customers millions.

“Executives at the highest levels of the companies included in today’s lawsuits, concerned that ebook sellers had reduced prices, worked together to eliminate competition among stores selling ebooks, ultimately increasing prices for consumers,” said Eric Holder, the US attorney-general, at the announcement of the action in Washington.

The publishers named in the lawsuit were the Hachette Book Group, HarperCollins, Holtzbrinck, Simon & Schuster, and Penguin.

Three of them have already agreed to settle out of court, leaving Apple and the other two to dispute the allegations in court.

Publishers settling

Hachette, HarperCollins and Simon & Schuster all immediately settled with the Justice Department. Once the settlement is approved, it will require the publishers to let retailers set their own prices for ebooks – bringing down costs for the consumer.

Apple, Holtzbrinck and Penguin will contest the lawsuit in court. Penguin has said it has done nothing wrong, saying that it had increased competition by ending Amazon’s dominance of the ebook market.

Responding to the announcement, Amazon has said it is already planning to lower the prices for ebooks associated with its Kindle ereader.

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