The United States says technology company Apple and book publishers illegally
fixed prices of electronic books, or e-books. The Department of Justice took
legal action on Wednesday in federal court in New York City.
The same day,
Attorney General Eric Holder spoke in Washington about the case against Apple
and the book publishers. The publishers are Hachette, HarperCollins, MacMillan,
Penguin and Simon & Schuster.
Mr. Holder said e-books are changing the
way Americans share information. He said the Department of Justice wants to make
sure Americans can buy e-books at a fair price. He said the case was part of
that effort.
The Justice Department says Apple and the five publishers made
an illegal deal to set higher prices for electronic books. It says, because of
this, Americans paid millions of dollars more than they should have.
The
dispute centers on the influence of Amazon.com. The Internet store had been
selling e-books for nine dollars and ninety-nine cents. But the government says
Apple made a deal with the publishers two years ago as it prepared to launch the
iPad tablet computer. The deal guaranteed Apple thirty percent of the money
earned on each e-book and sold. It
also created a pricing model that required stores to sell at a price set by the
publishers and Apple. The price was several dollars higher than the one offered
by Amazon.
Acting Assistant Attorney General Sharis Pozen noted that
businesses can set their own prices. But she also said:
SHARIS POZEN: "Let me
be clear, when companies get together and conspire to enter into agreements that
eliminate price competition, it crosses the line. This kind of agreement is
illegal and anticompetitive. That's when the Antitrust Division will take
action, and that's what we've done today."
Sharis Pozen added that company
officials knew what they were doing at the time. That included former Apple
chief Steve Jobs.
Antitrust laws aim to halt business methods that crush
competition. Hachette, HarperCollins and Simon & Schuster have agreed to a
settlement. It says they must repay millions of dollars and stop giving Apple
special treatment.
Sixteen states and Puerto Rico are also bringing their own
case. Apple and British publishers McMillan and Penguin have decided to go to
court.
