A Seattle-based law firm has 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.
Apple worked with HarperCollins Publishers, Hachette Book Group, Macmillan Publishers, Penguin Group Inc., and Simon & Schuster Inc. to illegally fix prices on e-books, according to Hagens Berman. They did so in order to boost profits and stop Amazon from offering e-book prices that were cheaper than those on Apple's iBooks, according to the suit, which was filed in Northern California district court.
"The firm believes that Apple was involved in the scheme," Hagens Berman said in a statement. "The complaint alleges that Apple believed that it needed to neutralize the Kindle when it entered the e-book market with its own e-reader, the iPad, and feared that one day the Kindle might challenge the iPad by digitally distributing other media like music and movies."
If Amazon refused to ditch its e-book discounts, the publishers would deny Amazon access to their titles, the suit said.
Simon & Schuster and HarperCollins declined to comment, as did Hachette because it had not yet been served with a complaint. A Macmillian spokesperson said the company "denies the allegations and intends to defend the case vigorously." Apple and Penguin did not immediately respond to a request for comment.
The suit comes about a year after 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.
Blumenthal referenced a March 2010 article from The New York Times, which said that Amazon threatened to stop selling e-book versions of books from publishers unless they agreed to a list of terms that included a three-year contract and a promise that no other competitor will get a lower price or better terms.
This came after Amazon temporarily removed books from Macmillan in January 2010 after a battle over e-book pricing. Books from Penguin were also unavailable for almost two months amidst a similar argument; that issue was resolved in May 2010.
The Hagens Berman lawsuit, meanwhile, referenced a 2010 Wall Street Journal article in which Apple's Steve Jobs said "the prices will be the same" when asked why someone would buy a $14.99 iBook vs. a $9.99 Kindle e-book.
Earlier this year, Apple introduced a subscription billing platform for the App Store, under which it takes a 30 percent cut of revenues. That prompted Amazon, and other e-book providers, to pull support for e-book purchases from their iOS apps in order to avoid handing over that 30 percent. Kindle and Nook e-book purchases are now handled via the browser on Apple devices.
Editor's Note: This story was updated Friday with comment from Macmillan.