Lawsuit filed against Apple for inflating e-book prices
When the Kindle came out in 2007,
Amazon began offering e-books
at a lowered price, which caused
aggravation to the publishing
industry as publishers lost market shares.
The Department of Justice has filed a lawsuit against Apple Inc. and five other publishers, charging these organizations with conspiring against Amazon by manipulating e-book prices.
This civil antitrust lawsuit was filed against Apple, Penguin Group, Hachette Book Group, HarperCollins Publishers Inc and Simon & Schuster Inc. These groups have been accused of creating a plan to inflate e-book prices geared toward sinking Amazon's dominance in the e-book market.
When Amazon's Kindle came out in 2007, this company began offering e-books at a lowered price of $9.99, which caused publishers consistent market share loss. After several years, Amazon was able to gain 90 percent of the e-book market.
Amazon caused more aggravation to the publishing industry when the company urged authors to sell books directly to the business instead of publishing firms. Additionally, Amazon promised a 70 percent royalty payment to the authors.
Apple attempted to gain an edge by releasing the tablet iPad and moving into the e-book market. This company felt that Amazon's large market share and business strategies would make it challenging to compete against such a low-priced model.
Apple took it upon themselves to partner with publishers in an attempt to gain a greater advantage against Amazon, according to the filed lawsuit. Apple became an agent of the publishing companies, receiving 30 percent commission on every e-book sold.
This agreement included a clause in which publishers could not sell the same books to other retailers at lowered prices, in this case Amazon. The Department of Justice claims that this agreement has caused an inflation of ebook prices by an average of $2 to $3 and resulted in consumers paying millions more dollars for ebooks than necessary.
Other companies in Chicago that find themselves in a similar situation to Apple or Amazon may need the help of a Chicago business lawyer. A Chicago litigation lawyer with nationwide experience and financial expertise could be a useful resource for any company dealing with antitrust claims.