DoJ files antitrust suit against Apple, publishers over e-book prices (Updated)

The US Department of Justice has filed an antitrust lawsuit against Apple and six e-book publishers over alleged collusion to fix e-book prices. The antitrust suit was filed in US District Court in New York on Wednesday morning against Apple, Hachette, Harper Collins, Macmillan, Penguin, Pearson, and Simon & Schuster, according to Bloomberg.

The European Commission began investigating Apple and the book publishers in December for allegedly trying to fix the prices of e-books in an attempt to cripple Amazon’s then-popular $9.99 e-book model. The EU was quickly followed by the US, and in late March, the EU and the US DoJ announced they were working together to pursue the case.

“Defendants’ ongoing conspiracy and agreement have caused e-book consumers to pay tens of millions of dollars more for e-books than they otherwise would have paid,” reads the lawsuit. The DoJ says Apple signed contracts with the publishers ahead of the original iPad’s introduction in 2010 that put other e-book vendors at a disadvantage when it came to pricing negotiations.

Rumors of a settlement have been floating about for weeks, but as of last week, Apple, Penguin, and Macmillan were still reportedly resisting engaging in settlement talks with the DoJ. According to sources speaking to Bloomberg, the three companies want to protect the e-book agency model, which allows the publishers to set their own prices on e-books instead of the seller. The DoJ is reportedly looking to change that with its proposed settlement, however—both Bloomberg and the Wall Street Journal seem to be in agreement that the government could try to invalidate the contracts between Apple and the book publishers in question, allowing Amazon (and other vendors) to set their own prices once again.

As we wrote last week, such a settlement would likely result in lower e-book prices on the consumer side. But while the DoJ acknowledged that a settlement proposal would be announced sometime on Wednesday, specifics were not yet available.

Update (11:30am CDT): Attorney Steve Berman, the lead counsel in a class-action lawsuit filed against Apple and book publishers last year, issued a statement after the DoJ lawsuit went public:

“We are pleased that the U.S. Justice Department and Attorney General Holder agreed with our analysis that Apple and some of the nation’s largest publishers engaged in anticompetitive practices.

“We’ve long held that Apple and this group of book publishers formed a cabal with the sole intent of extinguishing any competitive influences in the e-book marketplace.

“While Attorney General Holder’s actions, if successful, will put an end to the anticompetitive actions, our class-action is designed to pry the ill-gotten profits from Apple and the publishers and return them to consumers.

“One of the main engines of our economy today is technological innovation, including devices such as the iPad and Kindle. Any company—or conspiracy of companies—trying to illegally limit the benefit of these technologies is guilty of more than anticompetitive behavior. They are guilty of stanching future innovation in the marketplace.

“We are eager to move forward with our civil action against Apple and the publishers, and to show the court and the public the depth and breadth of the conspiracy they concocted at the expense of consumers.”