Apple and five publishers are under pressure from the Justice Department over the way they price e-books.
According to a Wall Street Journal report, Apple and Simon & Schuster, Hachette Book Group, Penguin Group, Macmillan, and HarperCollins are meeting with the department in order to avoid a lawsuit.
Cupertino and the publishers are accused of colluding to raise e-book prices.
In the past, publishers would sell books to retailers at half the cover price. Booksellers could then set whatever price they wanted. When Amazon first started selling e-books, it sold them for less than what it bought them for, offering deep discounts in order to cover the market. That practice had publishers, as well as Apple, concerned that Amazon would control the market – similar to the fears felt by record companies when Apple started selling songs through iTunes at $0.99 a pop.
So Apple changed the system when it first introduced the iPad in 2010 to an "agency model." This provides that publishers set the price and the seller takes a 30 percent cut - resulting in the price of e-books on Amazon jumping from $9.99 to $14.99.
The DOJ claims Apple and these publishers acted in concert to raise prices, a violation of antitrust laws. It hasn't sued yet, but the Journal said it plans to, though a settlement is also being considered.
Apple, which unveiled a new iPad yesterday, hasn't spoken on the matter and did not respond to a request for comment. Publishers have be silent on the matter, too, as has the DOJ.
Meanwhile, in December, the European Commission opened a formal antitrust probe against Apple and the five publishers for the similar reasons. The commission said it will investigate whether "these publishing groups and Apple have engaged in illegal agreements or practices that would have the object or effect of restricting competition" in Europe.
Earlier in 2011, 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.