As a writer, I’ve been following this. They basically got together to fix prices to prevent Amazon from dominating the ebook market. As far as I can tell, they’re all breaking the law:
The Justice Department filed an antitrust lawsuit against Apple and five publishers on Wednesday, claiming collusion over the pricing of e-books, Bloomberg reports.
Sources familiar with the matter tell Politico and Reuters that several of the publishers are expected to agree to a settlement in the case before the end of the week. There has been no indication, however, that Apple will strike a deal to avoid what could be a highly-publicized and costly court battle.
Federal officials had reportedly previously warned Apple and the publishers that a lawsuit was potentially forthcoming. The five publishers named in the suit are: Hachette SA, HarperCollins, Macmillan, Penguin, and Simon & Schuster.
Under a traditional book selling model, publishers had previously sold books for half the cover price, allowing retailers to set their own store price. But around the time Apple introduced its first iPad in 2010, the company moved to an “agency” model, where publishers decide the book price and Apple takes a 30-percent cut. As part of that move, Apple also reportedly stipulated that publishers couldn’t let rival retailers like Amazon sell the same book for less, in effect making the agency model the new standard for much of the industry.
Justice Department lawyers say that Apple and the publishers violated federal antitrust laws by enacting their e-book plan. The publishers, meanwhile, deny they acted jointly to hike up the prices.