Feds accuse Apple of price fixing of e-books

FEDS TARGET APPLE IN MAJOR ANTITRUST SUIT: The U.S. has just filed an antitrust suit against Apple and five of the nation's largest publishers—Macmillan, Simon & Schuster, HarperCollins, Hachette and Penguin—alleging they conspired to limit competition for the pricing of e-books, the Wall Street Journal reports. "Defendants' ongoing conspiracy and agreement have caused e-book consumers to pay tens of millions of dollars more for e-books than they otherwise would have paid," the lawsuit said. The agreement between Apple and the publishers allegedly occurred ahead of the introduction of the iPad in 2010 and as Amazon had driven e-book pricing down to $9.99 for newly released and best-selling e-books, according to the lawsuit. The conspiracy was allegedly aimed to limit Amazon's ability to discount e-books. To achieve their goal, the publishers shifted from a "wholesale" model to sell books and e-books and replaced it with a so-called agency model, in which the publishers would set the retail price and give retailers no power to alter that price. According to the suit, iTunes Store head Eddy Cue telephoned each of the five publishers on or around Dec. 8, 2009, to schedule exploratory meetings in New York City on Dec. 15 and Dec. 16. "It appears that Hachette and HarperCollins communicated with each other about moving to an agency model during the brief window between Mr. Cue's first telephone calls to the Publisher Defendants and his visit to meet with their CEOs," the suit reads. "The plan—what Apple proudly described as an ‘aikido move’—worked…changing the industry permanently." Atty. Gen. Eric Holder and the DOJ antitrust division chief Sharis Pozen have scheduled a news conference in Washington for 9 a.m. PDT to announce "a significant antitrust matter." Whoa. (4/11a)