Apple denies e-book price fixing

As Amazon rubs its hands together at Department of Justice action...
Darren Allan

April 13, 2012
apple

As we reported earlier this week, the US Department of Justice finally went through with its threat against Apple and five major book publishers.

Much controversy has been caused by Apple’s so-called agency model – which gives away control of pricing to the publisher in exchange for a 30 per cent cut of revenue – and it finally flared up into a DoJ lawsuit on Wednesday.

The suit alleges that they have all been involved in e-book price fixing, and three of the major publishers in question settled immediately. Penguin and Macmillan didn’t, however, and neither did Apple.

Instead, Apple has come out with a statement to defend its actions, and have a pop at Amazon.

According to the Telegraph, Natalie Kerris, Apple’s spokeswoman, told the Wall Street Journal: “The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry.”

She added: “Just as we have allowed developers to set prices on the App Store, publishers set prices on the iBookstore.”

The thrust of Apple’s argument is that it has been sparking competition in the e-book market, and attacking Amazon’s dominance. Though consumers may not agree when the price of an e-book is more than its printed cousin…

The legal action, however, is very much buoying Amazon. The retailing giant has already announced plans to push the price of e-books down by a third, but Apple and other opponents argue that it’s unhealthy that Amazon should be able to exert such a level of control over the e-book market (via its Kindle store and hardware).






 

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