U.S. Government Sues Apple Over E-book Price Fixing.

Rumors swirling over the last few days pointing to a U.S. Department of Justice lawsuit against Apple over e-book price fixing rang true this morning. The official lawsuit was filed in New York and includes a number of book publishers as well: Hachette SA, HarperCollins, Macmillan, Penguin and Simon & Schuster. Apple and Macmillan in particular maintain that the pricing scheme setup between them helps competition as it allowed them to break off a chunk of Amazon’s book/e-book empire.

The big rift between the DoJ and the defendants revolves specifically around the “agency” model that Apple and friends adopted; this model removes the right of retailers to decide what to charge customers and instead places the pricing rights on the shoulders of the publisher. (If Apple were to lose the case, Bloomberg says the agency model wouldn’t necessarily be killed and other publishers could still use it.)

Simon & Schuster, Hachette Book Group and HarperCollins all allegedly want to “avoid a costly court battle and could settle as soon as today”, according to Bloomberg. It remains to be seen how far Apple will go, though considering they have built up a pretty robust and profitable business around their e-book business on the iOS ecosystem, we don’t think they’ll roll over easily.

Source: Bloomberg