The Justice Department could reach a settlement in the next few weeks with Apple and some of the major publishers suspected of collaborating to hike electronic book prices reports “Reuters” (http://macte.ch/HpLxa), quoting two unnamed “people close to the negotiations.”
While negotiations are still “fluid,” the settlement is expected to eliminate Apple’s”most favored nation” status, which had prevented the publishers from selling lower-priced e-books through rival retailers such as Amazon.com or Barnes & Noble, the article adds. The deal could also force a shift, at least temporarily, in pricing control from publishers to retailers.
The brouhaha centers on Apple’s move to change the way that publishers charged for e-books as it prepared to introduce its first iPad in 2010. Traditionally, publishers sold books to retailers for roughly half of the recommended cover price. Under that “wholesale model,” booksellers were then free to offer those books to customers for less than the cover price if they wished.
Apple suggested moving to an “agency model,” under which the publishers would set the price of the book and Apple would take a 30% cut. However, Apple also insisted that publishers couldn’t let rival retailers sell the same book at a lower price.
The Justice Department feels Apple and the publishers acted in concert to raise prices across the industry. It’s purportedly prepared to sue them for violating federal antitrust laws.