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Apple sued, this time by the US, accused of eBook price fixing

by Alistair Lowe on 12 April 2012, 10:58

Tags: Apple (NASDAQ:AAPL)

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It's a little strange when seeing the tables turned, however, this time around, Apple is the one being sued and, by the US no less; as it and five of the country's biggest book publishers are being accused of eBook price fixing, leading to the launch of an Antitrust lawsuit.

Aside from Apple; HarperCollins, Macmillan, Penguin, Hachette SA and Simon & Schuster have all been implicated as active participants in price fixing, with the latter two firms reported to have already settled their suits with the New York district court yesterday.

The issue stems from publisher wishes to continue supporting the Agency pricing model, which sees publishers reserve the right to set eBook prices and not the retailer themselves, typically preventing competition between retail firms and in some cases, making it difficult for those firms to differentiate eBook prices against paperback, passing on savings and promoting the new electronic medium.

Both Apple, Penguin and Macmillan disagree, however, believing that the Agency pricing model allows publishers to avoid sales losses by preventing excessive eBook discounting from reducing sales margins below the established level for existing paperbacks. However, where the balance should be and where it's currently at in regards to eBook vs paperback sales-margins is a matter up for debate, with publishers accused, in some instances, of simply benefiting from improved eBook margins through reduced production overheads, as opposed to passing costs on to the consumer and/or retailer.

If publishers continue to fight against the Antitrust lawsuit, hopefully we may get a chance to peruse through some traditionally mist shrouded sales and costing figures, usually kept close to the hearts of publishing firms.



HEXUS Forums :: 15 Comments

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i`ve seen a number of cases where the ebook price has been more than the paperback price :S

IMHO The publishers do seem to be profiteering so hopefully they will be made to stop this .
Bit of an oxymoron, price fixing is inherent to artificially scarce (government-granted monopoly, at that) articles like books. And they're surprised this kind of thing happens?

..believing that the Agency pricing model allows publishers to avoid sales losses by preventing excessive eBook discounting from reducing sales margins below the established level for existing paperbacks.
Typical copytard ‘reasoning’. If hard copies aren't in demand then let them die off with dignity. People want eBooks, so be reasonable and give them eBooks.
aidanjt
(believing that the Agency pricing model allows publishers to avoid sales losses by preventing excessive eBook discounting from reducing sales margins below the established level for existing paperbacks.) Typical copytard ‘reasoning’. If hard copies aren't in demand then let them die off with dignity. People want eBooks, so be reasonable and give them eBooks.
There's the thing that I don't understand - surely the publishers set the cost that they're willing to have their product (whether eBook or real one) sold at, so if it's being sold cheaper than that, then surely it's the seller that's making the loss. In which case, why do publishers even care - as long as they get their five bucks (or whatever).

Did no-one point out that price fixing is the kind of thing that happened in Soviet Russia, so definitely “un American”? ;)
If the publishers had a modicim of common sense they`d see that by allowing ebooks to be cheaper people are more likely to buy a book on impulse rather than reading reviews/recomendations by friend etc.

Its the same with games. Most of the time I dont buy stuff on steam because its usually more expensive than in the shops but when they have the sale on i buy games that I wouldnt even have looked at before.
Apple and the music industry seem to have been able to get away with similar practices with online music sales for years.