May 15, 2013
Apple has responded to the U.S. Justice Department's allegations in the landmark e-book price fixing case it's involved in. Recall that in April last year, the Justice Department filed an antitrust lawsuit against Apple and five of the largest publishers in the U.S. The lawsuit accused them of collusion aimed at raising the prices of e-books as Apple prepared to launch the iBookstore in conjunction with the iPad in 2010. The fixing of e-book prices was reportedly done by Apple and its partner publishers in a bid to challenge Amazon's dominance of the low-cost digital book market. But in a filing released today but dated April 26, Apple has effectively denied the accusations. The company said that, as noted in a new report by Reuters, it held negotiations with publishers separately and proposed unique agreements to each of them. Note that the Justice Department has since settled out of court with the publishers involved: HarperCollins, Simon & Schuster, Hachette, Macmillan, and Penguin. Apple, the only remaining defendant in the lawsuit, said that the publishers were already trying to subvert Amazon's practice of selling books on the cheap even before it completed deals with them. As noted by Reuters:
Apple said the publishers had decided, independent of Apple, to eliminate discounts on wholesale book prices of e-books, to sell lucrative hardcover books first to bookstores in a practice called windowing and to take other measures to push Amazon to raise prices.When Apple approached the publishers with regard to what would later be launched as the iBookstore, the company ran into some "points of negotiation and contention." These included disagreements over Apple's price caps, 30 percent commission, and demand to do away with windowing. Each publisher had different counterproposals, which Apple apparently agreed upon prior to the launch of the iBookstore and the iPad. In another filling made on April 26 and released today, Apple maintains that the demand for e-books "exploded" following the release of the iPad. In addition, it says that the average retail price for e-books actually dropped by as much as $0.63 per book.