Attorneys representing e-book purchasers, in a case that claims five major publishers conspired with Apple to fix the price of e-books, last week filed an updated complaint that includes new information and allegations.
The complaint names five top publishers, including HarperCollins Publishers, a subsidiary of News Corporation; Hachette Book Group; Macmillan Publishers; Penguin Group, a subsidiary of Pearson; and Simon & Schuster, a subsidiary of CBS; as well as Apple, as defendants.
The US Department of Justice has indicated it has opened an investigation into possible price-fixing in the e-books industry. The European Commission (EC) also launched a probe into whether Apple and the five publishers connived to fix the prices of the devices.
While Amazon decides the price of books and has imposed heavy discounts on electronic titles, sometimes selling them for less than the wholesale price, publishers have signed deals with Apple in which they set the retail price themselves, with the Cupertino-based company taking a 30% cut.
Publishers began using what is called the “agency model” when Apple released its first iPads in 2010, and have signed them with other retailers including Kobo and Waterstone's. Amazon has campaigned against the deals, saying they result in higher prices for customers.
Hagens Berman, the law firm chosen in December to consolidate the class, argues that the adoption of the “agency model” has driven up the cost of e-books by as much as 30%, costing consumers millions of dollars.
The complaint cited a statement made by David Young, chairman and CEO of Hachette Book Group USA, to The New Yorker: “If it's allowed to take hold in the consumer's mind that a book is worth 10 bucks, to my mind, it's game over for this business.”
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