U.S. Justice Department Probes Apple's, Publishers' eBook Sales Practices

WASHINGTON (Reuters) - The United States is looking into allegations that the electronic book industry has violated antitrust law, a top Justice Department official said on Wednesday.

In an oversight hearing, the Justice Department's top antitrust official Sharis Pozen, in an roundup of her division's work, said: "We are also investigating the electronic book industry along with the European Commission and with states attorneys general."

In Brussels, the European Commission said Tuesday that it had opened an investigation into whether e-book publishers owned by Lagardere, Pearson Plc, News Corp and two other firms fixed prices with Apple Inc, blocking rivals and hurting consumers.

It identified the publishers as French media-to-aerospace group Lagardere's Hachette Livre unit, News Corp's Harper Collins, CBS Corp's Simon & Schuster, Pearson's Penguin and Verlagsgruppe Georg von Holzbrinck, which owns Macmillan in Germany.

Publishers adopted the agency model last year when Apple launched the iPad, allowing publishers to set the price of e-books. In turn, they would share revenue with the retailer.

In the past, publishers would sell e-books on a wholesale model for 50 percent of the retail price.

Pozen, who is an acting chief of the antitrust division, noted that the investigation, along with other actions that the division has taken, without giving any details.

The division is fighting AT&T's plan to buy T-Mobile USA from Deutsche Telekom, has sued American Express regarding merchant fees, and is conducting a range of price-fixing investigations.

(Reporting by Jasmin Melvin and Diane Bartz; Editing by Richard Chang)

Comments

[OAK STREET MAFIA]

10:54 PM on 12/08/2011

Steve Jobs must have been absent ,when the teacher covered the sherman antitrust act of 1890.

[rann948]

08:38 PM on 12/08/2011

Why pick on Apple? Amazon is the biggest perp as far as I can see and they've been at it longer.

In fact, let's just review the whole "price-fixing" law. For example, the Dyson vacuum, a hot item right now, cannot be sold for less than the MSRP. The US is the only place Dyson, an English company, can get away with this. It's not the only company either. How they get around it: offering sweeter deals to those retailers who toe the line, charging through the nose wholesale to those who don't. Hey, price fixing is price fixing, period. It's illegal and it should stop. Who does it? Well just check the ads. When you see a product offered for the exact same price everywhere (maybe a penny or two difference}, that's a sure sign of price fixing.

These companies protect themselves with patents, and then rake in the dough with price fixing.
Sweet.

[Razerface]

07:40 AM on 12/09/2011

Don't buy it.............

[johnlvogt]

08:53 AM on 12/09/2011

I bought a Dyson on sale at HD this year for $100 off msrp.

[CaptD]

07:30 PM on 12/08/2011

Why is the DOJ worried about eBooks when the Energy Companies are scalping US?

[matt emerson]

04:57 PM on 12/08/2011

No surprise here. This administration has been attacking businesses daily with not only their rhetoric but with real threats like this "investigation". If you want to see why businesses are scared to hire people or expand, this story is a perfect example as to why we can't seem to emerge from this recession. At a critical time in our nation's history when we needed a strong, buisness savvy leader, we elect a community organizer who has no idea what a profit margin or making payroll means. Instead of encouraging companies to hire by giving them tax breaks, the constant threat of this administration is to tax them more. Instead of rewarding companies who offer health benefits, this administration forces a health care bill down the throats of Americans that even the authors can't decipher. If you want to see exactly how NOT to encourage business growth, we will use this administration as the example alongside the Carter administration later in history.

[o3mta3o]

04:34 PM on 12/12/2011

how many more tax breaks do we give to companies who are already in negative tax status? how about the fact that most of those companies have taken their jobs overseas any way? everything you're saying would sound great coming out of a fox commentators mouth. either that's what you are or you let someone feed you some bad info.

[jtmpmm]

01:20 PM on 12/08/2011

some of these posters need their medications adjusted. Please, stop with all the marxist baloney.Didn't you know that communism is dead and has been dead since china decided to become a state controlled capitalist system with a large strain of national socialism regarding energy currency valuation?

[Combat Marine]

05:39 PM on 12/08/2011

bing bing bing bing, bong...

[dontcopyit]

01:18 PM on 12/08/2011

Pc & android are the best

[dontcopyit]

01:17 PM on 12/08/2011

i like Google and yeah if its free search why not. Power well everyone has it on there hands just depends how you use it, i hate apple and device ( Pc and android)

[gh3b4]

01:11 PM on 12/08/2011

The IRS needs to get Apple to pay the taxes it owes.

[kranmar]

11:29 AM on 12/08/2011

What a crazy scheme; Sell a product that everybody wants and make a profit;

Sounds really Un-Amercan

[KBLAIR3]

11:25 AM on 12/08/2011

JUST,COZ,STEVE,SPOKE,OUT,AGAINST,THE,IDIOT

[Annie Colson]

11:17 AM on 12/08/2011

I see a lot of comments here bashing the government for going after Apple for anti-trust laws but I haven't seen a comment bashing the price of ebooks. You pay at least $100 for the convenience of an electronic reader and then still have to pay soft-cover prices for anything you download to read. Why? They have not had to pay anyone to cut down any trees to make paper, there's no shipping involved, no ink being used, so why the high price? I believe any company should be able to set their prices, but that it should be done without gouging the public.

[Marioth]

11:20 AM on 12/08/2011

Simple: because people are willing to pay for it. Ubiquity will soon see a normalization in prices. That $100 device will cost $50 next year.

[WordPusher]

12:08 PM on 12/08/2011

The reason is that those costs are not what make up the majority of the cost of producing a book. The real costs are paying the writers, copy editors, layout team, art director, cover artists, and the many other support personnel who help a publishing company function. In a word, OVERHEAD. Those costs don't go away just because a text is published electronically.

[Fee Leep]

07:38 PM on 12/08/2011

True, but they are much lower....

[Annie Colson]

01:04 PM on 12/09/2011

I understand the concept of OVERHEAD - I used to run my own business. But putting out that book electronically does reduce the cost of that overhead.

[user598486]

11:04 AM on 12/08/2011

Under Clinton administration he had Microsoft investigated, and they found nothing, Now under Obama administration there having Apple investigated. It cost hundred's of millions of tax dollars, cause it will take them a couple of years, and end up finding nothing wrong.Dems. don't like big
business.

[Eris23]

11:30 AM on 12/08/2011

They found nothing? Then why did it end with a settlement? LOL!

[ncinkman]

01:55 PM on 12/08/2011

So they could say they found nothing. The investigators have to be paid.

[mynameisGEOFF]

11:03 AM on 12/08/2011

GOOD! Take down the 1%!!!!!!

Sent from my iPhone

[pete2polly]

10:39 AM on 12/08/2011

You have to pay these politicians off like any other big business that wants to stay in businesses.

[pjvoperamom]

11:30 AM on 12/08/2011

Sickening thought.

[rvanta007]

10:30 AM on 12/08/2011

This all makes sense ! . . The Obama (un) Justice Department is investigating Apple, a company that does not fit the Marxist requirements and depend on government handouts, Apple is, up until now, a SUCCESSFUL, PRIVATE COMPANY ! . . . Why doesn't the Obama - Holder Justice Dept. concentrate on recovering the 1,050 guns that they let go over the border in their OOPS-eration called "Fast and Furious". . . . The only thing that is "fast and furious" about the Obama Justice department is to run through the taxpayers money and duck responsibility !

[Fee Leep]

07:41 PM on 12/08/2011

You just finished to listen to Fox News. Isn't?
And since you do not know what Marxism is, please refrain to comment on subjects who are beyond your understanding.

[rann948]

08:44 PM on 12/08/2011

Do you know? In Marxism, the government owns the whole production stream. Manufacture/growing, transportation, sales. The government sets the wages and the prices. It worked so well in the USSR, LOL, that the USSR is no more. Obama sure would go this route if he thought he could get away with it. He tried to buy a car company, and maybe still will, he's trying to set up government controlled (with $$) alternative energy. He would love to have the government rake in the health care dollars.

He must be stopped. Bring on 2012!