The United States Department of Justice has warned Apple and five top U.S. book publishers that it plans to file an antitrust lawsuit against them, The Wall Street Journal reported on Wednesday evening. According to the paper’s multiple unnamed sources, the DOJ alleges that Apple colluded with publishers to raise the prices of eBooks sold through Apple’s iBooks store. Publishers named in the report include Simon & Schuster Inc., Hachette Book Group, Penguin Group, Macmillan and HarperCollins Publishers Inc. Read on for more.
Apple is said to have helped push book publishers away from their traditional pricing model — publishers would typically charge distributors about half the cover price for an eBook — and into an “agency model,” which would let publishers set the end-user price of an eBook and Apple would take a 30% commission on each sale. This new model is said to have made it difficult for booksellers such as Amazon and Barnes & Noble to compete, because they would regularly discount the prices of new books and trim margins in an effort to promote sales. Publishers are reportedly investigating a possible settlement.