Apple Denies DoJ Allegations of Collusion

As we previously reported, the US Department of Justice has sued Apple and some e-book publishers with the charges that both parties collaborated to fix e-book prices instead of giving the retailers a free rein. A few publishers, Simon & Schuster as well as Hachette and HarperCollins have already settled the suits but Apple and Macmillan still vehemently deny that such collusion ever took place. In an interview with AllThingsD today, Apple spokesman Tom Neumayr defended Apple’s actions.

He said, “The DoJ’s accusation of collusion against Apple is simply not true. The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry. Since then customers have benefitted 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.”

The DoJ alleges that Apple conspired with the publishers to enter an “agency model” for e-book sales and effectively abandon Amazon’s “wholesale model”. The difference between the two is that in the agency model, publishers set their own pricing for books while in the whole sale model adopted by Amazon,, the booksellers set the prices. Amazon was very much a frontrunner in the early stages of the e-book market with its Kindle Store, but after awhile publishers grew frustrated at the willingness of booksellers to sell their wares at a loss.

Consequentially, publishing executives were worried that the discounted e-books would have an impact on the pricing of physical books. According to a few reports, legal experts have said that the DoJ is not likely to win against Apple. They have noted that it would have a better case against the publishers with one professor in antitrust lawsuits stating that the DoJ would have to show the Cupertino technology giants that they had some kind of involvement in the original arrangement if they want to win the case. What do you think about this whole ordeal? Would it make you stop buying the e-books from Apple? Let us know with a comment below.

Pradeep Chandrasekaran
Categories: Apple, Web
Tags: Amazon