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DOJ threatens Apple with antitrust suit over eBook price-fixing

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.

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Zach Epstein

Zach Epstein has been the Executive Editor at BGR for more than 10 years. He manages BGR’s editorial team and ensures that best practices are adhered to. He also oversees the Ecommerce team and directs the daily flow of all content.

Zach first joined BGR in 2007 as a Staff Writer covering business, technology, and entertainment. His work has been quoted by countless top news organizations, and he was recently named one of the world's top 10 “power mobile influencers” by Forbes. Prior to BGR, Zach worked as an executive in marketing and business development with two private telcos.