Apple Says eBook Price Fixing is Simply Not True

Apple has adamantly defended itself against claims that it is involved in colluding with publishers to fix the price of ebooks in its iBookstore.

The computing giant was sued by the US Department of Justice on 11 April as it is believed that Apple has worked together with book publishers to artificially inflate the retail price of ebooks in its store.

Apple said: "The DOJ's accusation of collusion against Apple is simply not true. The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry. Since then customers have benefited from eBooks that are more interactive and engaging. Just as we've allowed developers to set prices on the App Store, publishers set prices on the iBookstore"

The Californian company is being sued by the Department of Justice (DoJ) for allegedly breaching antitrust laws with five major book publishers - Penguin Group, Macmillan, Hachette, HarperCollins and Simon & Schuster.

Only Penguin Group and Macmillan - along with Apple - are yet to settle with the DoJ on the case.

The department has published a lengthy document outlining why it is bringing legal action against Apple, it includes extracts from emails between the company and publishers in which private meetings at an upmarket New York restaurant are arranged, where they are alleged to have discussed "business matters".

The document states: "Publishers saw the rise on ebooks, and particularly Amazon's price discounting, as a substantial challenge to their traditional business model [and] feared that lower retail prices for ebooks might lead eventually to lower wholesale prices for ebooks [and] lower prices for print books."

To combat this, the DoJ alleges, the publishers "teamed up with Apple, which shared the same goal of restraining retail price competition."

The late Steve Jobs was his usual blunt self when negotiating with publishers before the iBookstore went online, with the then Apple boss contacting one publisher to say it can "keep going with Amazon at $9.99" or "hold back your books". Jobs then presented a third option: "Throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99

Jobs knew that his proposed prices were higher than the benchmark set by Amazon and its Kindle store, but is reported by the DoJ to have told publishers: "You set the price, and we get our 30 percent, and yes, the customer pays a little more, but that's what you want anyway."