Apple and publishers colluded to keep ebook prices high, a lawsuit filed by the United States justice department alleges.
The United States Attourney General Eric Holder says customers shelled-out millions more than they should have in order to furnish their iOS devices with electronic titles from HarperCollins, Macmillan, Penguin, Simon & Schuster and Hachette.
The suit was filed against Apple and all five publishers, although HarperCollins, Simon & Schuster and Hachette have already reached a settlement. The remaining trio, Penguin, Macmillan and Apple itself are set to fight the lawsuit.
In a statement to the press Holder said: "Beginning in the summer of 2009, we allege that executives at the highest levels of the companies included in today’s lawsuit – concerned that e-book sellers had reduced prices – worked together to eliminate competition among stores selling e-books, ultimately increasing prices for consumers. As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles."
The Department of Justice says that the publishers and Apple worked to prevent other sellers, like Amazon and Barnes and Noble, from reducing the prices under threat of withdrawal from those stores, thus harming competition.
It alleges that with Apple gaining 30 per cent commission per sale the company would be treated as a 'favoured nation', where no other store could offer prices lower than the iBooks Store.
The settlement with HarperCollins, Simon & Schuster and Hachette is likely to require those publishers to allow retailers to charge whatever they see fit for ebook titles, which should mean a victory for the consumer and increased competition between online bookstores.