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Judge OKs Class-Action eBook Price-Fixing Suit

By - Source: AFP | B 29 comments

And the lawsuits just keep piling on as Apple and six eBook publishers are accused of price fixing.

Judge Denise Cote of US District Court in New York has given the green light for a class-action lawsuit to proceed against Apple and six book publishers that have been accused of price-fixing eBooks.

The suit was filed back in August 2011 and is separate from the suit filed by the Department of Justice last month which made similar accusations. In fear of Amazon dominating the eBook sector, Apple and the publishers allegedly conspired to assume a pricing plan -- AKA the Agency Model -- that allowed the publishers to set the price while Apple received a 30-percent cut. Apple reportedly said it would only agree to the price structure if the publishers enforced the new plan on other retailers like Amazon and Barnes & Noble, thus snuffing out competition.

After reviewing the evidence, Judge Cote said that the agreement between Apple and the book publishers just before the launch of the iPad tablet "is unlawful per se because it is, at root, a horizontal price restraint." This of course is her opinion, and a final ruling won't be made until both sides of the case are presented to a jury.

"There are ample allegations that Apple became an integral member of this conspiracy and well understood that the upshot of its participation would be the elimination of price competition at the retail level, forcing consumers to... 'pay a little more' for ebooks," the judge wrote.

The publishers named in the lawsuit include HarperCollins, Simon & Schuster, Hachette Book Group, Macmillan, Penguin and Random House. Three publishers already settled with the Department of Justice due to the impending expense. Others have decided to stand their ground alongside Apple.

As stated back in April, documents filed in the government's case suggested that former Apple CEO and late Steve Jobs played a key role in the "conspiracy." One piece of evidence is an email Jobs sent to one publisher, saying "Hold back your books from Amazon" and "Throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99."

In retaliation, Apple said that the accusations made by the Department of Justice were untrue. "The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry. Since then, customers have benefited from eBooks that are more interactive and engaging. Just as we've allowed developers to set prices on the App Store, publishers set prices on the iBookstore."

Judge Denise Cote apparently thinks differently, allowing the class-action lawsuit to proceed. Canada is also going after Apple and five book publishers over eBook price fixing. The lawsuit was filed in Quebec Superior Court by lawyer Normand Painchaud last February. Like those filed here in the States, his class-action suit claims that Apple colluded with the book publishers to raise ebook prices in order to topple Amazon's dominance. Same story, different territory.

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  • 17 Hide
    alphaalphaalpha , May 16, 2012 1:30 AM
    julianbautista87they wanted to fight the Amazon's monopoly with a more aggressive and expensive monopoly. XD


    Amazon was only becoming a monopoly because they were willing to sell eBooks at low prices, benefiting the consumer, whereas the other eBook suppliers (and the publishers) wanted to have higher prices.
  • 12 Hide
    julianbautista87 , May 16, 2012 1:28 AM
    they wanted to fight the Amazon's monopoly with a more aggressive and expensive monopoly. XD
  • 10 Hide
    g00fysmiley , May 16, 2012 4:15 AM
    Quote:
    "The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry. Since then, customers have benefited from eBooks that are more interactive and engaging. Just as we've allowed developers to set prices on the App Store, publishers set prices on the iBookstore."


    If I pay more for it I find the book more interactive and engaging... here I thought it was the story I was reading, not the price i paid for the book. Man all these years those hard cover readers really must enjoy them so much more than me reading the same text on paperback, I've been doing it wrong,. thank you apple for teaching me the way >_<

    I wanted to get an ereader about a year-ish ago then I saw the price was more than paperbacks and laughed ... digital copy costing more than the physical media is ridiculous. I hope the courts fine the crap out of these companies and hopefully it'll bring down the prices of e books to acceptable levels where it makes sense since it costs them nothing on distribution
Other Comments
  • 5 Hide
    del35 , May 16, 2012 12:48 AM
    Ummmmm, more Apple backroom dealings.
  • 8 Hide
    monsta , May 16, 2012 1:19 AM
    Throw the book at them...pardon the pun
  • 9 Hide
    blazorthon , May 16, 2012 1:20 AM
    Apple might be in a little trouble if they don't find a cheap way to worm out of their mess.
  • 12 Hide
    julianbautista87 , May 16, 2012 1:28 AM
    they wanted to fight the Amazon's monopoly with a more aggressive and expensive monopoly. XD
  • 17 Hide
    alphaalphaalpha , May 16, 2012 1:30 AM
    julianbautista87they wanted to fight the Amazon's monopoly with a more aggressive and expensive monopoly. XD


    Amazon was only becoming a monopoly because they were willing to sell eBooks at low prices, benefiting the consumer, whereas the other eBook suppliers (and the publishers) wanted to have higher prices.
  • 4 Hide
    bustapr , May 16, 2012 2:21 AM
    julianbautista87they wanted to fight the Amazon's monopoly with a more aggressive and expensive monopoly. XD

    amazon didnt have a monopoly on the market. they had competition from borders and B&D at the time with great competitive pricing. Only reason Amazon steamrolled on the competition was because they made the kindle, which was by far superior to the competitions ebook readers.
  • 5 Hide
    willard , May 16, 2012 3:05 AM
    Quote:
    publishers set prices on the iBookstore

    *to a level agreed upon by Apple and the other publishers.
  • 10 Hide
    g00fysmiley , May 16, 2012 4:15 AM
    Quote:
    "The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry. Since then, customers have benefited from eBooks that are more interactive and engaging. Just as we've allowed developers to set prices on the App Store, publishers set prices on the iBookstore."


    If I pay more for it I find the book more interactive and engaging... here I thought it was the story I was reading, not the price i paid for the book. Man all these years those hard cover readers really must enjoy them so much more than me reading the same text on paperback, I've been doing it wrong,. thank you apple for teaching me the way >_<

    I wanted to get an ereader about a year-ish ago then I saw the price was more than paperbacks and laughed ... digital copy costing more than the physical media is ridiculous. I hope the courts fine the crap out of these companies and hopefully it'll bring down the prices of e books to acceptable levels where it makes sense since it costs them nothing on distribution
  • -3 Hide
    danwat1234 , May 16, 2012 4:41 AM
    Isn't that bookshelf in Myst?
  • 2 Hide
    arlandi , May 16, 2012 7:58 AM
    danwat1234Isn't that bookshelf in Myst?


    no, that's the shelf in GoG.

    "from eBooks that are more interactive and engaging."
    what happen to imagination??
  • 2 Hide
    ubercake , May 16, 2012 11:52 AM
    We're actually to a point where most e-books are more expensive than their paperback counterparts. How do they justify this when the publishing cost is so low for the e-book?

    Let's take these suckers down!!!
  • 3 Hide
    del35 , May 16, 2012 1:10 PM
    Amazon seems like a beacon of freedom compared to the Apple handyourwalletprison. Tis Apple magical contribution to technology. Never thought I would find myself loving Amazon, Google, and Microsoft.
  • -2 Hide
    Anonymous , May 16, 2012 1:27 PM
    This all depends one which sale model you prefer. The Amazon model is: "Mr. Publisher, you sell Amazon the books at a very discounted price and Amazon will turn around and set the retail price even lower (to even below the suggested retail price) to sell to our customers". Amazon loses money on every e-book they sell. But, they make by selling e-book readers, i.e. Kindles. The Publishers make lower profits, or lose money, and the writers (as always) get squat. Customers pay artificially low prices.

    The Agency Model is Apple saying to the Publishers: "Mr. Publisher, you sell your books in the iBookStore at whatever price you want. Whatever the price Apple will get a 30% commission on every sale". Publishers make an appropriate profit, writers earn more, Apple makes 30% commission (just like products sold in the iTunes store). Customers pay suggested retail prices.
  • 1 Hide
    blazorthon , May 16, 2012 1:53 PM
    Mac HelpThis all depends one which sale model you prefer. The Amazon model is: "Mr. Publisher, you sell Amazon the books at a very discounted price and Amazon will turn around and set the retail price even lower (to even below the suggested retail price) to sell to our customers". Amazon loses money on every e-book they sell. But, they make by selling e-book readers, i.e. Kindles. The Publishers make lower profits, or lose money, and the writers (as always) get squat. Customers pay artificially low prices.The Agency Model is Apple saying to the Publishers: "Mr. Publisher, you sell your books in the iBookStore at whatever price you want. Whatever the price Apple will get a 30% commission on every sale". Publishers make an appropriate profit, writers earn more, Apple makes 30% commission (just like products sold in the iTunes store). Customers pay suggested retail prices.


    When eBooks cost more than paperback books (and often even more than hard cover books too), there is absolutely no excuse. Customers should pay less than a physical copy of the book would cost when they buy an eBook.
  • 0 Hide
    mac help , May 16, 2012 2:22 PM
    So the problem, as you see it, is NOT with Apple (who, in reality, is just an agent for the Publishers) but with the Publishers who want to charge more for this new and emerging technology.

    The problem here is that neither you nor I have the fainted idea of what costs are actually involved in printing a book. Or creating, publishing, and selling an eBook.
  • 1 Hide
    blazorthon , May 16, 2012 2:30 PM
    mac helpSo the problem, as you see it, is NOT with Apple (who, in reality, is just an agent for the Publishers) but with the Publishers who want to charge more for this new and emerging technology.The problem here is that neither you nor I have the fainted idea of what costs are actually involved in printing a book. Or creating, publishing, and selling an eBook.


    Well, Apple played a part in this too. If not for Apple, it wouldn't have happened at all. Apple used the eBook publisher's greed to make more money in what seems to be an illegal way. Apple is just as much at fault for this, if not more so, because they seem to have been both the catalyst for it (it seems that it was Apple who first contacted the eBook publishers about this), Apple was the means for it, and Apple should be held accountable for it too.

    I can't imagine the costs of making an eBook being greater than that of a hard cover book, especially with long books. In fact, I can't imagine the costs of an eBook being anywhere near that of a paper-back book, let alone a hard cover book. It's the same words, except instead of spending money on ink, paper, the glue to hold it all together with in the spine (or any other method used for holding the book together, I'm not an expert on books), and for hard cover books, the hard covers. The eBooks should be substantially cheaper to make and distribute.
  • -6 Hide
    mac help , May 16, 2012 2:49 PM
    By that reasoning, electric cars with far fewer parts than a conventional gasoline engine powered car, should be substantially less expensive that a gasoline powered car. That doesn't seem to be the case, though.
  • 1 Hide
    blazorthon , May 16, 2012 2:54 PM
    mac helpBy that reasoning, electric cars with far fewer parts than a conventional gasoline engine powered car, should be substantially less expensive that a gasoline powered car. That doesn't seem to be the case, though.


    Not at all... An eBook is just some data, not a full piece of hardware plus the data like the books are. eBooks aren't physical at all. They are just the books, except without the cost of printing them onto books. Why should the data be more expensive than the data plus a physical medium for it? It shouldn't. It's more akin to saying that a music album should not be more expensive when it is a digital download (legally, of course) than it is when it is on a CD, except the CD is probably much cheaper to manufacture than even most books are.
  • 0 Hide
    vertigo_2000 , May 16, 2012 3:21 PM
    How does Apple justify a 30% take for doing next to nothing?

    That's the business I want to be in.
  • 0 Hide
    blazorthon , May 16, 2012 3:25 PM
    vertigo_2000How does Apple justify a 30% take for doing next to nothing?That's the business I want to be in.


    It's the same thing that they do with other stuff sold on their mobile store, such as the apps. 30% is a common number for the amount of cash per purchase on an app store based ecosystem that goes to the owner of the app store.
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