Just like that, Apple is officially on the receiving end of a major antitrust lawsuit filed this morning by the U.S. Justice Department for alleged e-book price-fixing. The suit, filed in New York district court, includes publishers Hachette SA, HarperCollins, Macmillan, Penguin and Simon & Schuster, reports Bloomberg.
Bloomberg and Reuters had reported earlier that this was set to happen per the DOJ’s ongoing investigation of Apple as well as major publishers Simon & Schuster, HarperCollins, the Hachette Book Group, Pearson and Macmillan for alleged collusion to fix e-book prices.
The reason a lawsuit seemed likely is that where the DOJ was in negotiations with some of the parties to reach a settlement, Apple wasn’t one of them. The Wall Street Journal reported last week that three of the international publishers were “inclined to settle the matter,” but two — along with Apple — were apparently “reluctant” to cede on the DOJ’s terms.
Price-fixing occurs when two or more people agree to “fix” pricing for products or services for mutual benefit. Imagine, for instance, if the foremost retailers of a given product, say a new book, agreed to set the price at suggested list, foregoing discounts and effectively eliminating price-based competition. The retailers would enjoy high margins on the book, while consumers would be forced to pay the same price everywhere. Thus, with controversial exceptions made for cartels like OPEC, price fixing is illegal in several countries, including the U.S. under antitrust law.
Time Techland has the full article