WSJ: U.S. Department of Justice is Coming for Apple

[Michael Essany]

In a potential move that sounds particularly serious in nature, the Wall Street Journal is reporting that the U.S. Department of Justice may be coming after Apple. And this isn't over an alleged Proview trademark violation in China. This is pretty heavy.

According to the venerable financial publication, "The Justice Department has warned Apple Inc. and five of the biggest U.S. publishers that it plans to sue them for allegedly colluding to raise the price of electronic books."

It isn't clear as of this writing if the sources that leaked the information are associated with Apple or the DOJ. Regardless, it's a major developing story and one that could unfold shortly. In short, the Justice Department reportedly believes that Apple and the publishers (Simon & Schuster, Hachette Book Group, Penguin Group, Macmillan, and HarperCollins) should be sued for violating federal antitrust laws.

Although it isn't known if and how Apple could be punished for allegedly colluding to pump up eBook prices, settlement talks are believed to have already begun. And what could the eventual result be for consumers? Cheaper eBooks, says the WSJ.

Source: WSJ

[The Amazing Atheist]

What does Apple have to do with raising the prices of eBooks?

[techsn0w]

What does Apple have to do with raising the prices of eBooks?

It's a way to bring down the big guy. It makes great press.

[The6uest]

Well I'm all for lower eBook prices! I don't see why they're so much anyways since there's virtually no publishing costs..

[aidanharris]

What does Apple have to do with raising the prices of eBooks?

I'm assuming apple take a cut on all books sold through iBooks do say a book costs a dollar it would still cost a dollar but they could up the price to five dollars to take a four dollar cut while still giving the author his one dollar per book...

[ne0nlitez]

well you see they probably raised the price of their ebooks. wtf kind of question are you asking?

uh maybe because they raised the prices of their ebooks?

[swifty7]

lol I was thinking the same thing unless the e-book sellers have to raise their prices to compensate for fees imposed by Apple.....don't know really!!!!!

[Mrteacup]

What does Apple have to do with raising the prices of eBooks?

One word IBooks

[sziklassy]

What many people seem to be missing here is not the fact that Apple is actively hurting anyone now, but they are getting into a position where this might happen. Price fixing, etc. can be a very bad thing for the industry. Even if Apple's intents are not malicious, if they get into a position where malicious intents can effect the industry, that become a very, VERY big problem.

[Agent929]

What does Apple have to do with raising the prices of eBooks?

If its bought from apple that make money off it too

[ddonuts4]

Good. I dont know much about the subject, but from what i have seen, E-books are overpriced. It costs next to nothing to publish them. With paper books it costs money to print, bind, and ship them.

As for whether or not apple is involved in this... That remains to be seen. I wouldn't put it past them to collude with book publishers, but it's likely that something a little different happened. I think apple wanted a cut of the sales and publishers wouldn't have that. So the publishers had an idea and said: 'either you sell them at a higher price to make up for that percent cut, or you don't sell our books.'

[louee6]

F**k the Feds, them punks just mad Apple have more money than them!! Lol

[ohthatguyagain]

Interesting. Apple actually brought the price of books down. So low, you may remember, that the profit margins were too small for others to compete. So the end result is that ebook prices, will in fact, go back up, should this lawsuit succeed. (please reference the many articles posted here and on CNN about the subject). In addition, the publishers set the price of the book, not apple.

I agree with the idea of raising ebook prices. Though I believe in free digital media, I agree that folks who create and amass works of knowledge should be paid for their work.

[cmwade77]

Apple set up this new model for eBooks, which allowed the publisher, not the seller to set the price. Now this in and of it's self wouldn't be any violation of Anti-Trust laws, after all there were already a few stores (such as LuLu) that already worked using this model.

The difference is at the time LuLu would only take a 1%-2% cut from eBooks, while Apple would take a 30% cut. So, if you are a publisher, what would you do? Well, most would sell the book for less on LuLu than on Apple, since they would still end up with the same amount of money in their pocket and this would keep eBook prices down and get them in more hands.

This is where Apple comes in as potentially violating Anti-Trust laws. Their rules state that you can no longer sell a book cheaper than you are selling it through them. Well, since they take a larger cut, obviously prices must go up.

In addition, at the time Amazon was taking a much, much smaller cut, but was setting the prices of the books themselves rather than allowing the publisher to set the price. Amazon then changed their model to match Apple's as well, because that's what the publisher's demanded they do or else they would have to stop selling on Amazon, because they couldn't sell the books at a potentially lower price or they would get kicked out of iBooks.