Apple wants to go to trial to defend itself against allegations made the United States government surround a price-fixing scheme, Reuters reported on Wednesday. “Our basic view is that we would like the case to be decided on the merits,” Apple lawyer, Daniel Floyd, told U.S. District Judge Denise Cote. “We believe that this is not an appropriate case against us and we would like to validate that.” The Department of Justice last week accused the Cupertino-based company and five book publishers of conspiring to fix electronic book prices through Apple’s iBookstore. According to the DOJ’s case, Apple agreed in 2010 to allow some of the top book publishers to set their own prices. Since then, prices have risen and other online retailers such as Amazon have been under pressure from publishers to raise their discounted prices as well. The Justice Department claims Apple colluded with Simon & Schuster, Hachette Book Group, HarperCollins Publishers, Penguin Group and Macmillan to control prices. The the next hearing in the trial is scheduled for June 22nd. More →
The Australian Competition and Consumer Commission has urged local retailers to voice their concerns about eBook price-fixing as it considers a lawsuit against Apple and five of the world’s largest book publishers, The Financial Review reported on Thursday. “The ACCC has previously stated that impediments to emerging competition involving online traders is an area of priority,” a spokesperson said. “Competition concerns may arise where traders seek to restrict the discounting of products by way of respective arrangements with suppliers. Retailers with concerns should raise them with the ACCC.” The United States Department of Justice on Wednesday filed a similar suit against Apple, Simon & Schuster, Hachette Book Group, HarperCollins Publishers, Penguin Group and Macmillan for allegedly conspiring to fix eBook prices. More →
The United States Department of Justice is likely to lose its antitrust lawsuit targeting Apple and book publishers, according to a report from CNET. A number of legal experts agree that the case against the Cupertino-based company isn’t as strong as the one against publishers. The DOJ “has a far better case against the publishers than Apple,” said Dominick Armentano, professor and author of Antitrust and Monopoly. “If the CEOs of the various publishers got together in hotel rooms to discuss prices, they are sunk” and might as well settle, he said. Within the 36-page complaint, the Justice Department recounts how publishers met over breakfast in a London hotel and during dinners at a Manhattan restaurant to discuss price-fixing. Apple did not attend those meetings, however. More →
Apple shook up the e-book market with the recent introduction of iBookstore, its new e-book marketplace that is slated to debut on the iPad. Additionally, Apple partnered with five of the largest book publishers in a deal that would allow the publisher to set the prices of e-books to $12.99 to $14.99, and offered a profit-sharing arrangement in which Apple would take a 30% cut. Publishers boasted of their success and bullied Amazon into raising its Kindle e-book prices to the same price point set by Apple. All was well and good until a circulating rumor surfaced today that suggests Apple may have a trick or two up its sleeve. Apple has reportedly negotiated lower pricing on many of its e-books and that $12.99 – $14.99 price point being touted by publishers may actually be the top tier. Apple supposedly pushed publishers to offer discounts on best sellers, forcing prices down to a level that could rival Amazon’s $9.99 price point. Apple also reportedly negotiated a pricing scheme on non-bestsellers that is based upon the price of the hardcover edition of a book. An e-book with a hardcover edition worth less than $26 could have a price point well below $12.99. When the dust settles, we may have Amazon raising its e-book prices and Apple lowering its prices in a series of maneuvers that may have been brilliantly played by the boys from Cupertino. More →
Days after Macmillan books disappeared from Amazon’s inventory due to a feud over pricing, Amazon has confirmed that it has caved to Macmillan’s demands and will be raising the prices of Macmillan e-books from $9.99 to $12.99-$14.99 for hardcover and bestselling editions. The online retail giant expressed its strong disagreement with this pricing but decided to still offer the books to customers who can decide with their wallets whether they want to purchase Macmillan e-books at at what it calls “needlessly high prices”. A domino effect is beginning to be seen with News Corp-owned HarperCollins now jumping on the “We want higher pricing” bandwagon. In its earning conference call on Tuesday, News Corp CEO Rupert Murdoch clearly and concisely summarized the situation by stating:
We don’t like the Amazon model of selling everything at $9.99. They don’t pay us that. They pay us the full wholesale price of $14 or whatever we charge. We think it really devalues books and it hurts all the retailers of the hard cover books. We are not against [inaudible] books. On the contrary we like them very much indeed. It is low cost to us and so on. But we want some room to maneuver in it. Amazon, sorry Apple in its agreement with us which has not been disclosed in detail does allow for a variety of slightly higher prices. There will be prices very much less than the printed copies of books but still will not be fixed in a way that Amazon has been doing it. It appears that Amazon is now ready to sit down with us again and renegotiate pricing.