A federal judge has denied petitions by both Apple and a group of five major publishing houses to dismiss a class-action lawsuit accusing the companies of collusion in e-book price fixing, reports “AppleInsider” (http://www.appleinsider.com).
Judge Denis Cote of the U.S. District Court for the Southern District of New York handed down the e-book price-fixing suit’s first substantive ruling, the article adds. In the ruling, Cote cites several examples of possible collusion between Apple and the publishers.
Last month the United States Department of Justice filed an antitrust lawsuit against Apple, Hachette SA, HarperCollins, Macmillan, Penguin and Simon & Schuster in New York district court, claiming collusion over eBook pricing.
Apple and Macmillan, which have refused to engage in settlement talks with the Justice Department, deny they colluded to raise prices for digital books, the article adds, quoting unnamed “people familiar with the matter.” The companies will reportedly argue that pricing agreements between Apple and publishers enhanced competition in the e-book industry, which was dominated by Amazon.
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.