Apple refutes collusion charge

Apple refutes collusion charge

Apple has joined Penguin and Macmillan in defending itself against accusations of collusion over the move to the agency model in 2010, claiming the launch of the iBookstore broke "Amazon's monopolistic grip on the publishing industry". 

The US Department of Justice filed a suit on Wednesday that alleged a conspiracy between Apple and five US publishers over e-book price fixing. But in a statement released two days later, Apple spokesman Tom Neumayr said the "accusation of collusion against Apple is simply not true".

Neumayr added: "The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry. Since then customers have benefited from eBooks that are more interactive and engaging. Just as we've allowed developers to set prices on the App Store, publishers set prices on the iBookstore."

Three publishers have already settled with the DoJ, with HarperCollins, Hachette Book Group, and Simon & Schuster now having to tear up their contracts with Apple, having agreed not to enter into any deals that prevent retailers from setting their own e-book prices for a two-year period, and not entering "into any agreement with an e-book retailer relating to the sale of e-books that contains a price Most Favoured Nation".

Penguin and Macmillan have both stated that they did not conspire and made the decisions to enter into the agreements with Apple independently.

The leader column of the Times today (13th April) says the US Department of Justice was right to bring its case against Apple and five publishers over e-book pricing because "any cartel that inflates prices is bad for consumers". However the newspaper says that Amazon has "shamelessly used books as loss leaders" to lure in customers, "undermining publishers, with little regard for the value of writing", and cites arguments by Penguin and Macmillan that the Apple pricing model promotes competition by allowing a range of booksellers to thrive which would otherwise be wiped out by Amazon. "A comprehensive investigation is needed which includes Amazon in its sights and preserves competition in a market which matters to readers everywhere," the Times said.