Apple rejects e-book pricing conspiracy charges in U.S. lawsuit

Previously, we wrote about the United States Department of Justice and 15 states that sued Apple and two big book publishers for conspiring about the prices of e-books. Customers and competitors could be disadvantaged when companies make mutual agreements about the prices of their products, according to the U.S. government.

In a filing in U.S. District Court in Manhattan Tuesday, Apple claimed it has not conspired with anyone or fixed prices for e-books. Apple is rejecting charges that it conspired to fix prices of e-books, calling the U.S. government's antitrust lawsuit a "fundamentally flawed" endeavor that could discourage competition and harm consumers.

Rival Amazon, which makes the Kindle e-reader, has sold e-books for $9.99. The government complaint quoted Apple's co-founder Steve Jobs wanting to offer publishers a means to boost prices, and "create a real mainstream e-books market at $12.99 and $14.99." Apple denied that the government "accurately characterized" the comment of Steve Jobs.

Previously, the publishers stated the price of Amazon for the e-books is considerably lower than the price of a hardcover book and such low prices would set unrealistic customer expectations. The publishers believe that with respect to pricing, the ‘agency model’ works. The latter means the publishers instead of retailers determine the prices of e-books. Retailers would turn into 'agents' who could sell the books of the publishers, but not alter the price. The government however believes the ‘wholesale model’ works, where retailers (instead of publishers) determine the prices of e-books.

Surely to be continued.

Reference: Reuters