Justice Department Threatens Tech Giant Over Alleged E-Book Price Increases

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The Justice Department has warned Apple Inc. and five of the biggest U.S. publishers that it plans to sue them for allegedly working together to raise the price of electronic books, people familiar with the matter told The Wall Street Journal.

According to the news outlet, several of the parties have held talks to settle the antitrust case and head off a court battle that could be potentially damaging for the companies. If the Justice Department is successful, such a settlement could have wide-ranging repercussions for the industry.

The Journal reported that this may eventually lead to cheaper e-books for consumers. The five publishers facing a potential suit are CBS Corp.’s Simon & Schuster Inc.; Lagardere SCA’s Hachette Book Group; Pearson PLC’s Penguin Group; Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH; and HarperCollins Publishers Inc., a unit of News Corp., which also owns The Wall Street Journal and NewsCore.

BBC News reported that the issue has flared up because electronic books are sold according to a different formula than the one that is used to govern the sale of physical books.

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