Apple Sued by Justice Department for E-Book Price Fixing

Is the DOJ's Antitrust Suit a Much-Needed Challenge to Apple?

Is the DOJ's Antitrust Suit a Much-Needed Challenge to Apple?

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April 11 2012 2:37 PM

Apple Sued by Justice Department for E-Book Price Fixing

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(Connecticut Attorney General George Jepsen (L) and U.S. Attorney General Eric Holder announce an anti-trust lawsuit filed against Apple at the Department of Justice on April 11, 2012 in Washington, DC.)

Photo by Brendan Hoffman/Getty Images

It's a good thing Apple has over a $100 billion in cash on hand, because it may need some of that money to fight the U.S. Department of Justice.

The DOJ filed suit against Apple along with five of its publishing partners including Penguin and Simon and Schuster, for allegedly conspiring to fix prices and force out competitors like Amazon. The "agency model" allowed publishers not vendors to drive up prices of e-books and garnered Apple a 30 percent cut of each sale.

The suit could prove a landmark case, establishing a precedent in the tech publishing market. Apple denies any wrongdoing and plans to fight allegations head on. The DOJ, which follows the EU Commission's antitrust suit, is likely hoping for a settlement that will let Amazon and other competitors back into the $969 million market.

 

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Video produced by Krishnan Vasuvedan.

Ben Johnson is the producer of Marketplace Tech from American Public Media.