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

March 9, 2012 by  

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

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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  • Thomas

    An “e-book cartel”?…oh please! OPEC has been screwing us for generations, but we have to waste time going after the e-book business model. Of COURSE that model is different than that for print books – you don’t have that huge upfront cost in paper and ink, for one. You don’t have to estimate sales in advance to minimize potential waste of such. One digital file can beget a million, on the fly, as consumers make orders. Any pricing model under those circumstances, while presumably what the digital publishers think the traffic will bear, is subject to instant revision in response to continued direct customer demand. This is a red herring. The government should stay out of it.

    • Sirian

      Thomas,
      I agree but they will carry on with this and so many other sly intrusions – the more the merrier for the government. It simply falls into their subversive plans for more extended and more powerful governmental “control”, period.

      • simian pete

        Sirian,

        I always find computer tech e-books for free in CyberSpace ! But they are always a version or two old and offered for free. I find the older free books as a good way to save money$$$ … Fo instance, you can find e-books on ADA 95 for free, but no free ones on ADA 2012 …

        There are older e-books on Java programming language offered for free. I read them on my Macintosh. You still can learn much. Then Oracle has a few free courses in html to bring you up to date.

        To bad these companies are price fixing.

        I still like learning Math with a real printed book. Math is very calming, a very good coping strategy for anxiety and stress.

  • Nobody’s Fool

    It is always best to leave the government out of it. If the e-books get too high, it will put a kink in the sales, and that will bring the price back down. Government, go home (to Russia or England or wherever oppression in the form of socialism lives).

  • http://personallibertydigest gottaplenty

    Justice dept like Eric Holder? gimme a break.

  • Chester

    At the same time they are raising E-book prices, actual hardbound or paperback books are going up as well, with far less profit margin. I think some publishers are trying to pull a fast one, but for sure see no sighs of collusion with anyone.

    • Centurion

      The “cost” or price of everything is going up thanks to the unprecedented creation of new fiat money. To put it another way, the cost of “stuff” including books isn’t rising. A chair is worth a chair and a book is worth a book. A gallon of gas is worth a gallon of gas. Have you noticed that the prices for food and automobiles and most other things seem to going up as well? The value of the money needed to purchase these things is going down. It simply takes more dollars that are worth less to equal the value of a chair, book or anything else.

      Every new dollar printed decreases the value of all of the dollars already in circulation by just a little bit. With tens of trillions of dollars being added in short periods of time to cover up deficits and the national debt, this really adds up. This only helps those at the top of the pyramid who print the dollars. As the dollars work their way trough the market, prices have to go up (in terms of dollars that is). Prices appear to be going up because most people can’t print their own money and therefore their income (again in dollars) grows more slowly than the depreciation of the currency. The government must intervene any time that this starts to become obvious. They have to try to keep us from seeing what they and the Fed are doing to steal the fruits of our labors.

      As a result of this inflation, most people are slowly growing poorer. That trend is now accelerating at an unprecedented pace. The only ways out of this now are probably 1) extreme deflation, 2) hyperinflation until the entire monetary system fails and we begin again with barter, or 3) tremendous reductions in spending and taxes, competitive currencies, a transition to hard money and likely a default on at least a portion of the national debt.

      God help us all. The next few years will likely be interesting but not much fun.

  • GRusling

    The e-book publishers probably are fixing prices, but so are many other organizations. Check the price of “Public Transportation” or any other service within a given area and you’ll find they differ very little, if at all.

    Any service (or product) will attempt to maximize profit without losing marketshare, because that’s what all businesses do. Their intent is to make money. As much money as possible, and I not only applaud that effort, I commend them for it.

    Whatever the market will bear… get-r-done…

  • FedUp

    What should people expect when the idiots in Connecticut elect a “person” like Blumenthal to Federal office.

    It wasn’t bad enough, the things he did to businesses in that State, they had to share with the Country.

    Check his record, and lean on Connecticut to get rid of the bum in the next election!

  • Ellen

    This is the same Justice Dept. that is suing states for enacting laws to enforce federal immigration laws, that itself refuses to follow the federal immigration laws, that refuses to deport illegals, that encourages cities and states to provide free housing/food/medical care for illegals, and that plans to cut staff at imiigration check points. They are a backward organization that upholds nothing remotely close to justice. As far as ebooks go, consumers don’t have to buy them. They can boycott. Or, they can rent ebooks from public libraries these days.

  • http://none Claire

    I will have to check this out–I work for a book publisher and we have ebooks. I think I will give my boss a call to make sure he is aware. Thanks for the info.

  • jimster

    My library has e-books, cost is ZERO. What is the big deal?

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