The Justice Department has filed suit against Apple and five major publishers for alleged e-book price fixing.
As reported by the Wall Street Journal and Bloomberg, the DOJ filed in Manhattan federal court today, arguing that Apple and the publishers - Simon & Schuster, HarperCollins, Hachette, Pearson, PLC's Penguin Group (USA), and Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH - agreed to a deal whereby there would be no price competition, e-book prices would increase, and Apple would receive a 30 percent cut of each e-book sold.
The DOJ did not immediately have a comment on the reports, but Attorney General Eric Holder is scheduled to hold a press conference on a "significant antitrust matter" at noon today in Washington, D.C.
He will be joined by Sharis A. Pozen, acting assistant attorney general with the antitrust division, and George Jepsen, Connecticut Attorney General.
Reports of a price-fixing DOJ probe were reported in March, but the issue picked up steam last year. In August, a Seattle-based law firm filed a class-action lawsuit against Apple and several major publishers, accusing them of colluding to increase e-book pricing and forcing Amazon to ditch e-book discounts.
In December, European Commission announced that it had opened a formal antitrust investigation into the matter. At the time, Pearson said it "does not believe it has breached any laws." Simon & Schuster said it had no comment beyond the fact that it is cooperating with the investigation. A Harper Collins spokeswoman also said the company was cooperating. Hachette said the company had no comment, and Macmillan did not immediately respond to a request for comment.
In 2010, Sen. Richard Blumenthal, then attorney general for Connecticut, penned a letter to Amazon and Apple, expressing concern that the companies' e-book deals with publishers might be anti-competitive. Negotiating a price floor for e-books would prevent competitors or new entrants to the market from offering discounts on certain e-books, Blumenthal said at the time.
Stay tuned for more details as they are revealed.