Will Knight

A View from Will Knight

DOJ Sues Apple Over E-Book Pricing

  • April 11, 2012

Apple’s plans to take a bigger bite of the e-book market hit a snag today when the U.S. Department of Justice filed a lawsuit accusing it of colluding with several publishers in an e-book price-fixing scheme.

The DOJ says that Apple, along with Simon & Schuster, HarperCollins, Hachette Book Group, Penguin and Macmillan, used the launch of the iPad to unfairly drive up the prices readers pay for e-books. Previously, Amazon basically controlled e-book pricing, and it sold books for less than publishers would have liked, largely to drive up sales of its Kindle hardware. The DOJ says Apple agreed to let publishers set their own prices (what’s known as “agency pricing”) in return for 30 percent of sales. The move also forced Amazon to accept prices set by publishers.

An antitrust suit can be a huge blow for any successful company (just ask Microsoft). But this one is unlikely to have anything like the same impact, partly because it may be settled quickly (some publishers have already come to an agreement), but also because the e-book market is just a small part of Apple’s business.

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