Apple lawsuit may spark lower e-book prices

A return to lower e-book prices and additional industry probes could be forthcoming amid the U.S. antitrust lawsuit against Apple Inc. and several major book publishers.

Publishers Macmillan and Penguin Group also named in anti-trust lawsuit

The lawsuits against Apple and major book publishers could spark a drop in e-book prices as well as additional price-fixing probes. (Reuters)

A return to lower e-book prices and additional industry probes could be forthcoming amid the U.S. antitrust lawsuit against Apple Inc. and several major book publishers.

The U.S. Department of Justice filed an antitrust lawsuit against Apple and publishers such as Macmillan and Penguin Group in Manhattan on Wednesday, noting it had already reached a settlement with three others: Hachette, HarperCollins and Simon & Schuster. A separate antitrust suit was also filed against Apple and the book publishers by 15 states.

In a brief statement, Apple's e-book rival and leading online retailer Amazon described the settlement as "a big win" for owners of its top-selling Kindle e-reader.

"We look forward to being allowed to lower prices on more Kindle books."

The suits allege that Apple and the publishers conspired to fix the price of e-books in a scheme that cost consumers more than $100 million US over the past two years by adding as much as $5 to the price of each title purchased. There is a similar, ongoing European Union antitrust probe into Apple and the major book publishers.

Amazon is considered to hold a weighty 60 per cent of the e-book market, down from an estimate of approximately 90 per cent several years ago. The online retail giant previously sold most of its e-books (bestsellers and major titles included) for $9.99 US — widely considered an ultralow price near, at or below cost, as part of a strategy to solidify its Kindle as the dominant e-reading platform. Cut-rate e-book pricing has been a significant concern for the struggling publishing industry.

In the lawsuits, U.S. justice officials allege that, as Apple's iPad tablet approached the market, publishers colluded with their competitors and the tech powerhouse to set a higher norm ($14.99 US) and generally raise e-book prices.

Apple has declined comment on the lawsuit, while Macmillan CEO John Sargent denied colluding with his competitors, saying he made the decision to change pricing on his own, even citing a time and date.

Penguin Group's chairman and CEO John Makinson echoed that sentiment. "The decisions that we took, many them of them costly and difficult, were taken by Penguin alone," he said. 

International attention

Meanwhile, additional investigations into potential e-book price-fixing could also emerge elsewhere. According to Australian media reports, the Australian Competition and Consumer Commission is considering its options and asking local retailers with concerns about e-book price-fixing to get in touch with the agency.

Canada's Competition Bureau remained mum regarding whether a similar e-book pricing investigation would be forthcoming.

"By law, the bureau is obliged to conduct its investigations confidentially. Therefore, we cannot confirm whether or not the bureau has received any complaints on this subject," Gabrielle Tassé, Competition Bureau senior communications advisor, told CBC News in an email on Thursday.

"For the same reason, I am unable to confirm whether or not the bureau has any investigations in this area."  Both the Association of Canadian Publishers and the Canadian Publishers' Council said they are monitoring the ongoing situation for potential effects on their members.

Publishers in Canada don't necessarily have the same deals as in the U.S., noted Jackie Hushion, executive director of external relations for the Canadian Publishers' Council.

With files from The Associated Press