DOJ Sues Apple for Price Fixing
- Posted on April 11, 2012 at 9:20pm by
Becket Adams
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The government says avid best-seller readers who use electronic books have been getting ripped off. Tina Fey’s “Bossy Pants,” Tim Tebow’s “Through My Eyes” and Keith Richards’ “Life” — maybe they should have cost less.
The Justice Department and 15 states sued Apple Inc. and major book publishers Wednesday, alleging a conspiracy that raised the price of electronic books. Attorney General Eric Holder told a Justice Department news conference that “we believe that consumers paid millions of dollars more for some of the most popular titles” as a result of the alleged conspiracy.
They said the scheme cost consumers more than $100 million in the past two years by adding $2 or $3, sometimes as much as $5, to the price of each e-book.
“This action drove up e-book prices virtually overnight,” said Sharis Pozen, head of the DOJ’s antitrust division, at a news conference. “Let me be clear: When companies enter agreements that prevent price competition, that is illegal.”
Watch the CNN Money news brief:
If there was price fixing, even the e-book version of the hot-selling Walter Isaacson biography of Steve Jobs, the late genius behind Apple computers, may have cost too much. In fact, according to Pozen, Apple’s Steve Jobs told publishers involved in the alleged conspiracy that “the customer pays a little more, but that’s what you want anyway.”
Mr. Holder said executives at the highest levels of the companies conspired to eliminate competition among e-book sellers. Pozen said the executives were desperate to get Amazon.com — the marketer of Kindle e-book readers — to raise the $9.99 price point it had set for the most popular e-book titles, because that was substantially below their hardcover prices.
“The Justice Department settled with three of the publishers — HarperCollins, Simon & Schuster and Hachette — requiring them to grant retailers like Amazon and Barnes & Noble the freedom to reduce prices,” CNN Money reports.
“The publishers will also be forced to tear up their current agreements with Apple and other e-book publishers and negotiate new, fair, and legal agreements,” the report adds.
The lawsuit said the effort to get e-book prices increased by Amazon.com came as Apple was preparing to launch the iPad. The government said the conspirators agreed that instead of selling books to retailers and letting them decide what retail price to charge, the publishers would convert the retailers into “agents” who could sell their books but not alter the publisher-set retail price. The scheme called for Apple to be guaranteed a 30 percent commission on each e-book it sold, the lawsuit said.
“To effectuate their conspiracy, the publisher defendants teamed up with defendant Apple, which shared the same goal of restraining retail price competition in the sale of e-books,” the lawsuit said.
Apple and the publishers declined to comment.
“Apple and Amazon both strike deals with publishers that forbid them from offering other retailers’ deeper discounts,” CNN Money reports, “Those agreements, dubbed ‘most-favored nation’ clauses, aren’t straight-out illegal under antitrust laws — but they’re also not always legal.”
“The settlement will begin to undo harm and restore price-competition,” Pozen said. “It will result in lower e-book prices and provide a more open and fair marketplace.”
The 15 states in the state complaint are Texas, Connecticut, Alaska, Arizona, Colorado, Illinois, Iowa, Maryland, Missouri, Ohio, Pennsylvania, South Dakota, Tennessee, Vermont and West Virginia. Puerto Rico also joined that lawsuit, which was filed in federal court in Austin, Texas.
The Associated Press contributed to this article.
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Comments (86)
VoteRightDammit
Posted on April 11, 2012 at 11:30pm“Let me be clear: When companies enter agreements that prevent price competition, that is illegal.”
When will that collusion thing start being applied to UNIONS ??????????????
ENOUGH, already with their ‘special exemption’.
Report Post »MS-GlenNBC
Posted on April 12, 2012 at 12:08amBloomberg just found out that the New Black Panthers put a bounty on Zimmermans head. Bloomberg said it is illegal.
Call Eric Holder. There needs to be some arrests against the Panthers…..
http://dailycaller.com/2012/04/11/bloomberg-flips-out-after-thedc-asks-question-about-bounty-on-zimmerman-video/
Hat Tip, The Daily Caller
Report Post »lukerw
Posted on April 12, 2012 at 12:19amThe DOJ is… simply a Gangster type ENFORCER… for the Left/Socialist/Commie/Atheist…
Report Post »TH30PH1LUS
Posted on April 12, 2012 at 4:04amEric Holder: “Let me be clear: When companies enter agreements that prevent price competition, that is illegal.”
So, you’re going fast & furious after companies that won’t properly compete… How about Health Care companies that don’t compete?
I can click online and buy books from the East Coast, ammo from the Midwest, smoked salmon from Alaska, an iPhone case from Korea – but I can’t buy a health care plan offered across state lines?
Mr. Holder, are you holding out on real Justice? Or have you and your boss got that confused with “social justice”?
We know the answer.
Report Post »biohazard23
Posted on April 12, 2012 at 5:56amTHIS is what Holder is worried about???? What the frack….? Like there isn’t anything else far more compelling such as Fast and Furious, Occupy, and the New Black Panthers……. What a twit…..
Report Post »LookTowardsTheLight
Posted on April 12, 2012 at 10:29amWow, I’m impressed by @MS-GlenNBC. An actual civil and productive comment. Enjoy it while it lasts folks.
Report Post »NHwinter
Posted on April 12, 2012 at 12:19pmHolder knows what illegal is only too well. Everything he does is illegal. The Supreme Court should slap him down to the size of an ant.
Report Post »whatdhesay
Posted on April 11, 2012 at 11:19pmIMPEACH Eric Holder and Obama!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!111
Report Post »ULYSSESG
Posted on April 11, 2012 at 11:19pmHolder is a POS that should suffer the same AS what just happened in AZ to Thomas..dissbarred.
Report Post »Holder is a f_n_g enemy to the state and should be SHOT for treason. F_U_C_K_ YOU ERIC, you a_hole…BRING IT ERIC………I DARE YOU…….
glashole
Posted on April 11, 2012 at 11:05pmTreason by the DOJ. Holder needs to smoke the end of one of his gun running weapons.
Report Post »Sjah
Posted on April 11, 2012 at 10:57pmIt’s only legal if the government does it.
Report Post »FreedomPurveyor
Posted on April 11, 2012 at 10:32pmEric Holder is just mad because he thinks the government should be the one fixing prices.
Report Post »db321
Posted on April 11, 2012 at 10:40pmIf they can do it to Apple – they can do it to anyone – All Apple has to do is grease the palms of Govt Employees. It your future – Your Vote.
Report Post »CatB
Posted on April 11, 2012 at 10:40pmYes .. and this business is WAY to successful .. the price of ebooks will come down .. the market will set the price .. it is still quite new.
Why doesn’t he go after a REAL PROBLEM .. like the NBP making threats of violence and DEAD OR ALIVE BOUNTIES … etc.
Oh that‘s right those are Obama’s peeps …. creeps.
OMG 2012!
Report Post »Flotilla Hunter
Posted on April 12, 2012 at 4:08amHolder is shifting attention because of his attempted coverup of the Kenneth Trentadue murder. Trentadue was involved in the planning of the Oklahoma City bombing and was a credible witness. It is said Holder and other government (FBI) agents were connected with supplying explosives that ended up not being used, but were found to have fingerprints connecting Government agents.
Report Post »hogtrashhd
Posted on April 11, 2012 at 10:32pmlet me be clear holder.. you are going to end up in an orange suit with a sign that says pump this on the rearend.. but that‘s your style isn’t it? yours and obama’s from what i hear..
Report Post »kickagrandma
Posted on April 11, 2012 at 10:29pmOK, PATRIOTS~~~ CHRISTIANS~~~~ AND JEWS~~~~ it is up to GOD whether or not we make it. I am counting on GOD, JESUS, THE HOLY SPIRIT and all the angels at their command to step in and kick ****.
We have not proven ourselves worthy for a second glance from GOD ALMIGHTY MAKER OF HEAVEN AND EARTH, and yet HE loves us still. What an amazing GOD. What an incredible, one-of -a-kind SAVIOR. What a DIVINE CREATION…. GOD’s connection with HIS people through THE HOLY SPIRIT.
apple’s creator Steve Jobs was a gifted, highly intelligent human being who chose his own god, his own direction. How I wish steve jobs could warn you off the wrong path far too many are choosing. Anyone who follows, who accepts, who occupies in the name of the current administration is on the road to hell forever and ever and ever. That’s a long, long, long time to live without GOD, without clean air and light and flowers and goodness and the smell of rain….
the doj in this administration is a tool of satan, nothing more.
GOD IS FOREVER AND HE IS FOREVER LOVING you/me/us.
You choose.
Report Post »changedone
Posted on April 12, 2012 at 8:12amAmen. Sometime I forget these types of sentiments in my posts, but you are right on. We all need Jesus in our lives, our hearts, more and more. If we make our helper, the maker of heaven and earth, the forefront of our lives, and earnestly seek Him, He will give us the desires of our hearts.
Report Post »trinklefinder
Posted on April 11, 2012 at 10:26pmOOOOOR, they could have bought the paperback. Heck, they coulda waited till the price came down for the ebook even. Shoot, they coulda even rented it from the library. They had many choices.
Report Post »WatchingThePuppetShow
Posted on April 11, 2012 at 10:20pmMr. Holder 100 million!? What about the TRILLIONS that your corrupt government has fleeced from the American public?? You and your administration discuss me.
Report Post »PAULA J ANDERSON
Posted on April 11, 2012 at 10:11pmWhy doesn’t Eric Holder hold the New Black Panthers accountable for the mess they are making…oops maybe there is goooooood reason–like the voter intimidation in PA. That was pushed under the rug. No, he’s going after the bad bad 1%.
Report Post »CatB
Posted on April 11, 2012 at 10:45pmAnd the THREATS that they have been making in Tampa FL.
Report Post »Randyrocker
Posted on April 11, 2012 at 10:07pmIf only Apple would lower some of their prices on their hardware, considering it would be a nice return gesture to those customers that have helped make them a fortune. Better the customers get a discount price break than the Obama crooks trying to steal their money right out from under them.
Report Post »Jaycen
Posted on April 11, 2012 at 10:12pmGood for you, siding with the federal government.
Consumers will ultimately dictate prices to companies, but if you can stand with the government and ask companies to be reasonable so the government doesn’t punish them, you can really help all of us lose our freedom.
Thanks, Randy!
Report Post »GrumpyCat
Posted on April 12, 2012 at 12:02am“Price” is not the same thing as “value”. Apple prices are usually higher than the competition but the value is much greater. Purchase a good Macintosh today and 5 years later it will still be a very good machine, but PCs are ancient 3 years later.
Report Post »MAMMY_NUNN
Posted on April 12, 2012 at 12:06amApple is a enemy of this administration because Microsoft trying to be the sole propriety in the U.S. as they are trying to force out the rivals by mandating hardware makers conform to Microsoft only compatibility. In other words if you ain‘t using Microsoft your computer won’t boot and if it ain‘t Microsoft certified you won’t be able to get a online connection. It’s already in the works.
Report Post »The-Monk
Posted on April 11, 2012 at 10:03pmThe DOJ waited for Steve Jobs to die before going after his company (Apple). Apple has more liquid money than the USA has. I’ll say that again… Apple has more available cash than the entire US Government Treasury.
Report Post »Holder and the Obama administration are just looking to take that money and call it their own.
This is just Communism 101. Take over businesses and their bank accounts.
Jaycen
Posted on April 11, 2012 at 10:11pmPartially, but it’s also about sending a clear and important message, “We will tell you what your prices are.”
Who needs the free market when you have the king to dictate prices?
Report Post »smokie
Posted on April 12, 2012 at 4:33amExactly what I saw. They saw the expensive leather Apple handbag on the back of the chair, and can’t help but try to take it. Petty Little Thugs that have made the ‘big time’. They couldn’t stand the idea of all that money not being in their hands.
Report Post »Envy coupled with Greed. That’s all I see in the eyes of Socialists.
TRONRADIO
Posted on April 11, 2012 at 9:59pmI’m certain fortune will not be kind to these demon-like people in the Obama gang. Time has a way; God has a plan; these people will be quite shocked someday.
GOP 2012
Report Post »RepubliCorp
Posted on April 11, 2012 at 9:57pmI just downloaded “The Pink People & Why They Should Die”
Report Post »SageInWaiting
Posted on April 11, 2012 at 9:52pmAlternate view: http://blogs.computerworld.com/20016/four_reasons_the_federal_suit_against_apple_and_publishers_is_flat_out_wrong?source=CTWNLE_nlt_pm_2012-04-11
[Amazon was selling books at a loss as a way to gain market share and spur demand for the Kindle. Apple and a group of publishers worried that Amazon was driving down the price of books, hurting publishers, and allowing Amazon to monopolize the e-book marketplace. So Apple and the publishers agreed on the agency model, and Amazon had to agree to it as well.
At the time the publishers and Apple made their deal, Amazon essentially had a monopoly on the e-book marketplace. The New York Times reports that "Since the agency model was put in place in 2010, Amazon has steadily lost market share in e-books, going from close to 90 percent to about 60 percent."] …
[...I can tell you from personal experience that it's tough to make money writing books. Authors get very little money from each book sold. Because of this suit, they'll get even less. Fewer authors will be able to make money, because the price of books will plummet, and along with it, royalties.]
This article presents another point of view. Accusations are made against Amazon that I don’t have direct knowledge of – take it with appropriate caution. It just seems strange that Apple again has a VERY successful iPad launch and a DOJ suit follows at a time when the agency has suffered some bad press.
Report Post »Murkman
Posted on April 11, 2012 at 10:08pmI can only imagine how hard it will be in the digital age for authors to make money. Look at the music industry. Bands get their music ripped on the internet with so many pirating the tunes. At least they have the chance to make money with live concerts and merchandise. How many authors go on tour and read their book?
Report Post »GrumpyCat
Posted on April 12, 2012 at 12:14amI don’t see why the DOJ thinks Apple is the bad guy. Apple approached publishers and offered attractive terms for their products.
Then the publishers (not Apple) approached Amazon and offered (demanded?) the same deal and Amazon capitulated. If there is any issue then it was this deal with Amazon, who is sitting on the sidelines pretending it was they who were harmed.
Apple insists the publishers not sell same product to others for less. Fine! I shop many retailers with essentially exactly the same terms with their “Low Price Guarantee!“ And many have a 30 day ”you won’t find it cheaper elsewhere” guarantee.
It would appear that if Amazon was willing to work with a 20% margin then they could undercut Apple’s prices, but apparently Amazon is tired of subsidizing ebooks.
As for the monopolies involved, I don’t see Apple is any sort of ebook monopoly. The publishers have a kind of monopoly, if you want to buy a Glenn Beck book you can only get one via his publisher.
Report Post »TRILO
Posted on April 11, 2012 at 9:52pmWell, the stock market needs to take a dive. Apple is one of the few reasons the market has not taken a free fall. Glad to see that Eric Holder is going to take care of that. Uncle Ben needs another reason to inject more QE into the market as the taxpayers have not been hosed enough.
Good-bye apple. Hope everyone sold on the up side of the trend.
By the way, it is too bad that Holder focuses on Apple and price fixing and the sale of raw milk rather than focusing on the Fast and Furious scandal. Oh, well I guess he just has different priorities. Unfortunately all of his priorities screw the American public.
Report Post »CatB
Posted on April 11, 2012 at 11:08pmPerhaps after January 2013 .. we can get some answers to Fast and Furious … and other CRIMES!
OMG 2012!!!
Report Post »Mojoron
Posted on April 11, 2012 at 9:46pmI’m surprised that it took Holder this long to find fault. You know the DOJ is gunning for companies that make a lot of money, that fact falls into the general philosophy of the Regime, beat the big corporations to death. This will be Microsoft all over again where every country in the world will now sue Apple since they have so much cash, they are ripe for the pickings.
Report Post »Snowleopard {gallery of cat folks}
Posted on April 11, 2012 at 9:57pmThe main reason is the big companies can be used for political intimidation tactics; they tow the line with Obama or be destroyed.
Report Post »barber2
Posted on April 11, 2012 at 10:34pmSNOW: So Chicago . So Al Capone. So Big Daddy.
Report Post »cemerius
Posted on April 11, 2012 at 9:39pmAnd YET, the New Black Panthers continue to spew their DOJ protected hate speech and intimidation tactics………
Report Post »barber2
Posted on April 11, 2012 at 10:30pmYou noticed that too ? Interesting as justice is supposed ” to be blind.“ Maybe we are expected to now experience the ” social justice “ phase which boils down to ” revenge “ and ” get even.” For the evils of slavery ? We didn’t practice or would we support it. But, whatever. With “social justice ” someone has to pay. Doesn’t matter if it is the one who committed the injustice ! Someone NOW has to pay. So enlightened . Yes, social justice : One of the Four Pillars of atheistic Socialism. Another dysfunctional belief of those who too enlightened to believe in God. Guaranteed to create the need for MORE social justice in the future ! So dysfunctional. So modern. So atheistic. Social Justice : the gift that keeps on giving and taking – forever.
Report Post »Murkman
Posted on April 11, 2012 at 9:38pmSo when the govt. tries to take over the entire health care industry….?
Report Post »barber2
Posted on April 11, 2012 at 9:37pmAnd thus, the Marxist Democrats’ War on Capitalism continues. Isn’t it so “ special” being governed by the Mafiosi/ union dudes from Chicago ? So new. So un-American. So “global.” Nothing like being governed by a seedy, thuggish bunch of Mad Max Occupiers who have International Marxist buddies .
Report Post »Doctor Nordo
Posted on April 11, 2012 at 9:34pmThis is obvious to anybody that has a Kindle or iPad. It is not uncommon at all for e-books to cost close to or the same as a hardcover, and it’s the norm for them to be more expensive than paperbacks. This makes no sense, since there are no printing, storage, or shipping fees involved with the distribution of e-books, not to mention that your ownership of these e-books is questionable at best. There is no reason that e-books shouldn’t be universally cheaper than their physical counterparts.
Report Post »TRILO
Posted on April 11, 2012 at 10:04pmWhy in anyone’s right mind would they pay close to the hardcover price for an e-book? An e-book is dependant on the electric grid and a working computer to access. Plus if I recall there was a problem last year with the content being changed on some ebooks already purchased. Why would I want someone to have the ability to alter my book once in my possession?
I only buy hardcover books so that I can have them on my book shelf. No outside person can access them, no one can change the content and if the power is out, I can still read them. Even if it is by candlelight.
Report Post »Doctor Nordo
Posted on April 12, 2012 at 1:46pmI don’t know. It belies explanation. This is why I pirate all of my e-books. If they were reasonably priced I would have no problem paying for them, but I refuse to spend $10-$20 for a virtual copy.
Report Post »Brooke Lorren
Posted on April 12, 2012 at 4:09pmI generally will only buy the eBook if I get a significant price discount for it. Otherwise I’ll get the physical book.
Report Post »Mutiny
Posted on April 11, 2012 at 9:30pmSupply and demand?
Report Post »Doctor Nordo
Posted on April 11, 2012 at 9:37pmNo. Supply is not the issue here. If it was then e-books would be cheaper than physical copies, since you can produce an unlimited quantity of them for zero cost. It’s just greed.
Report Post »dmforman
Posted on April 11, 2012 at 10:06pmDoctor Nordo, You have a choice of not purchasing a product if you don’t like the price. That’s what capitalism is all about.
Report Post »barber2
Posted on April 11, 2012 at 10:32pmDF: Yes. Capitalism means choices. Marxism means commands.
Report Post »kcinco
Posted on April 11, 2012 at 9:28pmAre you kidding me? You mean to tell me that holder has nothing better to do than suing Apple over the cost of e-books? It is yet another smoke screen from holder’s desk to divert attention from Fast & Furious, his unwillingness to prosecute domestic terrorists like the new black panther party, etc etc etc. Give me a break!
Report Post »rawmilker
Posted on April 11, 2012 at 9:35pmYup,you nailed it KCINCO……IMPEACH OBAMA! And his cabinet of course…
http://www.youtube.com/watch?feature=player_embedded&v=b76mBlnm86w
Report Post »Dde13
Posted on April 11, 2012 at 9:26pmI bought Tim Tebow’s “through my eyes” I thought it was a good deal otherwise I wouldn’t have paid for it. (my choice). On the other hand, I filled up my gas tank and I feel like I got ripped off. ( I no other choices).
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