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Apple named in e-book price-fixing scheme

The U.S. Justice Department has named Apple and five book publishers in an e-book price-fixing scheme. Shoppers line up outside an Apple flagship store in London. UPI/Hugo Philpott
The U.S. Justice Department has named Apple and five book publishers in an e-book price-fixing scheme. Shoppers line up outside an Apple flagship store in London. UPI/Hugo Philpott | License Photo

WASHINGTON, April 11 (UPI) -- The U.S. Justice Department said Wednesday it has filed a lawsuit against Apple Inc. and five book publishers for colluding to fix prices for electronic books.

At a news conference in Washington, Attorney General Eric Holder said the suit was filed in the Southern District of New York against the electronics giant and publishers Hachette, HarperCollins, Simon & Schuster, Macmillan and Penguin.

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The first three publishers, Holden said, had already agreed to a proposed settlement, leaving Apple, Macmillan and Penguin to face further litigation.

The settlement includes allowing retailers, "such as Amazon and Barnes & Noble, the freedom to reduce the prices of their e-book titles," Holden said.

In addition, the companies have agreed to discontinue "anti-competitive most-favored-nation agreements with Apple and other e-books retailers," he said.

The Justice Department alleges "executives at the highest levels of the companies … worked together to eliminate competition among stores selling e-books, ultimately increasing prices for consumers."

The "conspiracy" began in the summer of 2009 with executives holding "regular, near-quarterly meetings" to discuss confidential business matters, the department said.

"Make no mistake, the antitrust laws are flexible and can keep pace with technology and a rapidly changing industry," acting Assistant Attorney General Sharis Pozen said in prepared remarks.

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However, she said, chief executive officers of the publishers "bemoaned the 'wretched $9.99 price point.'"

She quoted one CEO as saying, "The goal is less to compete with Amazon as to force it to accept a price level higher than 9.99."

She also attributed a quote to the late Steve Jobs, a co-founder and CEO at Apple. Jobs allegedly said, "The customer pays a little more, but that's what you want anyway."

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