It is anticipated that the U.S. Department of Justice will file suit today against Apple, as well as several publishing companies. The reason? A scheme to fix e-book prices.
In 2010, when iPad was released, and iBookstore was new, Apple reached an agreement with five publishers to release books on iBookstore. Before the release of the iPad, Amazon’s Kindle was the preeminent e-book reader. Amazon forced publishers to sell most books at $9.99, a price that came in below the cost of the books. Apple’s agreement placed many books on the market for approximately $12.99, and gave Apple a 30% cut, resulting in Amazon raising its prices.
The European Commission, in an investigation similar to the DOJ, is probing whether Apple conspired to raise the price of e-books with CBS’s Simon & Schuster, News Corp.’s HarperCollins; Hachette Book Group; Pearson’s Penguin unit and Macmillan.