The federal government on Wednesday filed suit
against Apple and some of the largest book publishers in the U.S.,
alleging that the companies colluded to fix the price of electronic
books on Apple's iTunes digital store, Bloomberg News reported.
An official press conference to announce the legal action was expected to take place later in the day.
The suit in the New York District Court targeted the U.S. electronics giant as well as Hachette SA, Macmillan, Penguin and Simon & Schuster, the report said. All the respondents, apart from Apple, Penguin and Macmillan, settled their suits.
Apple and Macmillan, which is owned by Verlagsgruppe Georg von Holtzbrinck GmbH, refused to enter negotiations with the Justice Department, claiming that their pricing agreements enhanced competition in the electronic book market which had previously been dominated by Amazon.com, the report said. Penguin was also prepared to fight the suit in court.
The legal action had been widely expected following reports last month that government lawyers were looking into the terms of Apple's deals with the publishers whereby publishers set minimum retail prices for books. The agreements were signed prior to the launch of the iPad in April 2010 and gave pricing power to publishers with Apple guaranteed 30 percent of the retail price.
Prior to that deal, retailers like Amazon bought books at wholesale prices and were able to sell them at a discount. Amazon was forced to accept the new terms after publishers threatened to boycott the retail giant unless it agreed to the new model.
Update: In the U.S., competition authorities have reached a deal with Simon & Schuster, Harper Collins and Hachette, but not with Apple and Verlagsgruppe Georg von Holtzbrinck, according to German wire service Deutsche Presse-Agentur.
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