iPhone News Desk
DOJ To Sue Apple: Multiple Reports Say
Ironically Apple hit an all-time high Tuesday and had a market cap worth $600 billion
By: Maureen O'Gara
Apr. 12, 2012 03:00 AM
The Justice Department is fixing to sue Apple, Macmillan and maybe Penguin for antitrust maybe as soon as Wednesday by all reports.
The iPad-centered charges are supposed to be collusion and fixing the price of that newfangled invention, e-books.
The DOJ essentially destroyed Microsoft at the height of its powers a generation ago with its antitrust suit. Ironically Apple hit an all-time high Tuesday and for one bright shining moment had a market cap worth $600 billion.
The DOJ’s got a burr under its saddle because Apple and Macmillan won’t settle – or even talk anymore about settlement.
They deny colluding to jack up the price of e-books and are expected to argue that Apple’s two-year-old agreements with publishers were good for competition. The deals let publishers, not vendors, set the price.
That’s called the agency model and limits discounting.
Bloomberg says Washington wants a deal that would let Amazon and other retailers decide what to charge and void the “most-favored nation” clauses in Apple’s contracts requiring booksellers to provide it books at their lowest prices so Apple could reap a 30% return as opposed to Amazon, which buys at a discount and set its own cheap prices.
As has been in the news, Simon & Schuster, Hachette Book Group and HarperCollins have also been under the gun. They might settle Wednesday.
Bloomberg said e-book sales were up 117% last year to $969.9 million according to estimates from the Association of American Publishers, returning a higher margin than paper books.
The Consumer Federation of America says consumers will pay about $200 million extra for e-books this year.
People didn’t have this kind of problem when we went from the scroll to the codex.
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