US DOJ warns publishers, Apple that lawsuits are coming over ebook price fixing

The US Department of Justice’s investigation into possible price fixing in the ebook space may soon turn into lawsuits. The Wall Street Journal reports that the DOJ has warned Apple and five major publishers that it will sue them for working together to raise the price of ebooks both on consumers and competitors like Amazon.

by Dieter Bohn

Source The Wall Street Journal

Mar 8, 2012, 5:59 AM UTC

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Apple and publishers under fire for ebook price fixing

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The US Department of Justice's investigation into possible price fixing in the ebook space may soon turn into lawsuits. The Wall Street Journal reports that the DOJ has warned Apple and five major publishers that it will sue them for working together to raise the price of ebooks both on consumers and competitors like Amazon. At the core of the issue is the pricing structure that Apple chose when it launched iBooks — a standard "agency" model with a 30 percent cut for Apple. After the launch, apparently Amazon and others had to switch to the model quickly enough to make antitrust watchdogs take notice.

Some publishers are reportedly negotiating with the DOJ to avoid the lawsuits, but apparently talks are not very far along. Whether by suit or by settlement, it’s looking like the way ebooks get distributed and priced could be headed for a shakeup.

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