US authorities have launched an antitrust lawsuit against Apple and the largest book publishers, alleging that the companies conspired to raise the price of electronic books.
The much rumoured action is the result of a set of actions which Apple and book publishers set in place to move towards a so-called agency model with fixed pricing. The strategy is thought to have been aimed at stopping Amazon from heavily discounting electronic books.
Three US publishers have already settle the charges and agreed to dump the agency model so that Amazon can set their own prices for electronic books. Macmillan and Penguin, however, refused to settle and are now destined to do battle with US regulatory authorities in the courtroom.
The late Steve Jobs even described how Apple approached the publishers with the agency idea.
"So we told the publishers, ‘We’ll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that’s what you want anyway.’", Jobs was quoted in Isaacson’s biography.
Ironically Steve Jobs biography was Amazon’s top selling book last year. Apple has also resisted efforts to settle the dispute, despite the damning evidence in Jobs’ own autobiography.
In addition to the federal suit, the Wall Street Journal reported that no fewer than 16 states had filed their own action against Apple, Macmillan, Penguin and Simon & Schuster, raising the spectre of a payout to buyers of e-books that could cost the firms tens of millions of dollars.
In Europe, the EC is also investigating Apple and the major book publishers in a similar antitrust case. European authorities are negotiating with the firms to settle the dispute in what is also likely to bring an end to the agency model East of the Atlantic as well.
All of this is good news for bookworms with electronic books set to plummet in price. Maybe now they’ll actually cost less than the dead wood versions. That’d be nice, wouldn’t it?