Thursday, April 12, 2012

U.S. Sues Apple and Publishers as E-book Set Price

Washington - The U.S. Justice Department sued Apple and five publishing companies on Wednesday, accused of conspiracy to raise prices and restrict competition e-book and immediately announced a partial settlement in this case.

After the anti-monopoly lawsuit was launched, officials said three of these publishers have agreed to terminate the plan to force retailers like Amazon to accept the new pricing plan to limit their ability to offer discounts for electronic books.

Hachette Book Group, HarperCollins and Simon & Schuster has reached an agreement, but this case will still proceed against both Apple and other publishers - Macmillan and Penguin Group - "for conspiracy to limit freedom of e-book retailers to price competition," said Department of Justice .
Attorney General Eric Holder said that as a result of the conspiracy, "customers have to pay millions of dollars more for some of the most famous title" and the competition has been eliminated.

POZEN Sharis, the head of the Justice Department's antitrust division, said the scheme aims to put an end to discount the efforts by Amazon, which sells e-book for $ 9.99 U.S. dollars (about Rp91 thousand) to the new pricing plan forced upon these giant retailers.

He said the executive in this conspiracy "knew exactly what they do. That is, taking steps to ensure that prices paid by consumers for higher e-book."

This step is almost automatically increase the price to be paid by consumers for an e-book, he said.

This settlement "will start by canceling the harm caused by anti-competitive policy of the company, and will mengambalikan competitive price, so customers can pay the e-book with a cheaper price," he added.

The lawsuit was filed in U.S. District Court in New York said konsprasi that have occurred since 2009 involving the "plan to limit the ability of Amazon to offer a discount on e-booknya," which resulted in consumers having to pay a higher price.

Companies other than Apple is sued CBS Corp Simon & Schuster; Hachette Book Group, a part of France's Lagardere, Pearson's Penguin Group, based in the UK; Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck, and HarperCollins News Corp. Unit.

Amazon praised the settlement and said that it means is a lower price for the e-book.

"This is a great victory for Kindle owners, and we hope to be allowed to provide lower prices on Kindle books," said Amazon spokesman Drew Herdener.

Apple spokesman Tom Neumayr declined to comment.

But the chief executive of Macmillan John Sargent said the company would resist settlement because "the term DOJ demanded too heavy" and will make the Amazon "to restore its monopoly position which had been built before Apple's pricing system to replace a model agency."

Hachette said in a statement the "reluctant" to join in the settlement but added that "we remain confident that we do not violate antitrust laws."

It said Apple plans to come because "two years ago, Amazon effectively controlled monopoly on the sale of e-books and e-reader, and sell products at below cost in an effort to get rid of a competitor."

The lawsuit comes amid an investigation on both sides of the Atlantic in an attempt to limit discounts on electronic books, which have been dominated by the Amazon to Apple iPad launching in 2010.

In Brussels, EU competition chief Joaquin Almunia said the bid to complete the investigation it came from Apple and four publishers are being investigated.

"We are engaging in useful discussions with them, without prejudice to the outcome of the talks," he said.

The lawsuit said the publisher had conspired with Apple to put an end to "wholesale model" that has happened so far in which the e-book is sold to retailers, who have the power to set their own prices.

They replaced this model with a "model office" in which the issuer has the power to set prices that will be used by retailers to e-book. In this arrangement, Apple promised a 30 percent commission from every e-book that has been sold.

Before the introduction of the Apple iPad, online retail giant Amazon to sell electronic versions of bestselling books for $ 9.99 U.S. dollars (about USD 91 thousand).

Having adopted the model agent, the price rose to 12.99 U.S. dollars (about Rp119 thousand) and higher, the lawsuit says, and price competition among retailers is "should not be eliminated." Retailers, including Amazon was forced to accept a new model for selling e-book.

Legal scholar Keith Hylton of Boston University School of Law said the price of the mode is "a common practice where the manufacturer controls the price of goods to be used by retailers" and "and in essence it is not illegal."

"The Court has recognized that there are pro-competitive reasons on which the industry adopted a resale price maintenance," said. (nn)