Apple, leading US publishers, charged with collusion
Two plaintiffs in an anti-trust lawsuit claim that Apple and five publishers colluded to drive up Amazon's low e-book prices, raising profits for publishers and making Apple's iPad more competitive against Amazon's Kindle.
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If the Hagens Berman claims are true, then Apple and five publishers are guilty of collusion and violating anti-trust laws by preventing free trade and driving up prices.
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It sounds like a good argument, but where's the proof?
Unfortunately for Apple, there might be some. A conversation between Apple founder, Steve Jobs, and Walt Mossberg from The Wall Street Journal at the unveiling of the iPad was documented in The New Yorker, and shows evidence that Apple knew about Amazon's price hike before it happened, reports Ars Technica. Mossberg apparently asked Jobs why anyone would pay more for an e-book from Apple when they could pay less and get it from Amazon. Jobs said that the price difference would soon be eliminated because publishers were unhappy with Amazon's low pricing.
If the case is approved, Hagens Berman says the lawsuit would cover anyone who has purchased an e-book from Amazon after the price hike and seeks to stop the agency pricing model as well as claim as damages all the illegal profits made by the six defendants.
That could means tens of millions of dollars being paid out by Apple and the five publishers.
However, there are a few odd things about this lawsuit. One is that the plaintiffs are two seemingly unconnected people from different parts of the US. If this really is an anti-trust issue, why aren't Amazon or the FTC bringing it to court?
Another is that Apple allows iPad owners to download Kindle apps onto their iPads, basically allowing Amazon to sell its e-books on the iPad. Doesn't sound much like competition. Furthermore, many of Amazon's e-books are still priced at $9.99 or well below.
In the eyes of some observers, this looks more like an attempt by Hagens Berman to pull in some billable hours than a serious lawsuit based on irrefutable proof. But only time (and the courts) will tell if there is an actual case to be had here.
Megan Wasson is a Monitor contributor.
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