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Apple's Price Fixing Lawsuit: Colluded Against Amazon E-books

By Stephanie Rabiner, Esq. on August 23, 2011 6:45 AM

Two men have filed an e-book price fixing lawsuit alleging that, in 2010, Apple, along with five major publishing houses, banded together to increase Amazon's e-book prices.

The alleged goal? For the publishers, to stop Amazon's discounted prices, which were cutting into profit margins for physical books. And for Apple, to tamper the popularity of Amazon's Kindle, so that its soon-to-be released iPad would overtake the e-book reader in popularity.

As explained by Ars Technica, HarperCollins Publishers, Hachette Book Group, Macmillan Publishers, Penguin Group, Simon & Schuster, and Apple accomplished the alleged e-book price fixing in a two-step process.

First, Apple allegedly agreed to sell at a price set by the publishers, taking only a cut of the proceeds.

Second, the publishers allegedly agreed to only sell e-books to Amazon and other retailers at the same price as that given to Apple.

From the perspective of in house counsel, the most concerning thing about these allegations shouldn't be that they may be true, but that Apple CEO Jobs has made well-publicized statements that indicate that they are true.

The complaint points to an interview by the Wall Street Journal conducted about the iPad as an e-book reader. Steve Jobs explicitly told reporter Walt Mossberg that all e-book prices were soon to be the same, and that publishers were withholding their books from Amazon.

Why would he say this? How was he able to confidently predict the future?

There may be a viable (and legal) explanation, but Steve Jobs certainly hasn't helped his lawyers, who must now contend with evidence that shows he was complicit in the alleged e-book price fixing.

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