Apple defend over allegations of price fixing

Apple have been defending themselves over allegations from the US Justice Department that they have been working with publishers in regards to book pricing. They claim the charges are ‘simply not true'.

Apple launched the iBookstore in 2010 to target the very successful Amazon bookstore. Natalie Kerris, a spokeswoman for Apple spoke to the Wall Street Journal “The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry.”

She also said that the pricing structure is fair, and works in a similar fashion to the Apple AppStore. “Just as we have allowed developers to set prices on the App Store, publishers set prices on the iBookstore.”

The US Department of Justice however have different feelings on the matter and are suing Apple for apparently breaking antitrust laws with five major book publishers, HarperCollins, Hachette, Penguin Group, Macmillan and Simon & Schuster.

The DoJ report claims that in September 2008 and January 2009 the chief executives of the five publishers met up for dinners in a private room in a New York restaurant where they discussed business matters. Another time they met with a sixth publisher in a private room to discuss “the growth of e-books and complained about Amazon's role in that growth”.

The Telegraph in the UK add “Apple signed up to the so-called “agency model” of pricing, under which they dictate the price of an ebook as long as they give 30pc of the revenues to the retailer.

“Publishers saw the rise on e-books, and particularly Amazon's price discounting, as a substantial challenge to their traditional business model [and] feared that lower retail prices for e-books might lead eventually to lower wholesale prices for e-books [and] lower prices for print books,” the DoJ said. To combat this, they “teamed up with Apple, which shared the same goal of restraining retail price competition”, it added.”

Kitguru says: Amazon dominate this market and for once, Apple are finding it hard to win market share.

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