There seems to be a fuzzy fine line between business-savvy measures and illegal business-savvy measures. It's a line the U.S. Justice Department is saying that Apple Inc. crossed, alleging that the technology giant colluded with five other publishers to fix the prices of electronic books and prevent competition from Amazon.
The U.S. Justice Department filed the antitrust lawsuit on Wednesday against Apple Inc, Hachette, HarperCollins, Simon Schuster, Macmillan and Pearson, and PLC’s Penguin Group (USA). The crux of the suit involves the publishers’ shift from a traditional wholesale pricing model which allowed retailers to set the price of electronic and physical books to an agency model under which publishers set the price and retailers only receive a commission of that price.
“As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles,” said Attorney General Eric Holder at a Washington news conference.
While Hachette, HarperCollins and Simon Schuster have settled with the Department of Justice, other publishers such as Macmillan have protested the antitrust lawsuit, saying that the agency model wasn’t wrong and was motivated by fear of Amazon’s dominance over the e-book market.
The settlement that the publishers have agreed to allows Amazon and other retailers to set the consumer price of e-books and a separate settlement with states could lead to tens of millions of dollars in restitution to consumers who bought e-books.
Apple spokesman Tom Neumayr denied the charges in an email to Reuters, stating that the charges were ‘simply not true’ —a statement that we found less than news-worthy since major businesses like Apple hardly ever cave in to charges of business misconduct, especially not after the major supply chain embarrassment of Foxconn.
"The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry," Apple spokeswoman Natalie Kerris told the Wall Street Journal.
Blocking competition to prevent a monopoly somehow doesn’t make sense; doesn't blocking competition to prevent a monopoly create another monopoly?
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Meanwhile, French designer Philippe Starck has popped out of the woodwork to hint at a mysterious ‘revolutionary’ new product that he is working on with Apple, according to PC Magazine and AppleInsider. Starck let the cat out of the bag during a radio interview Thursday with France Info but did not release any further details. The full translation of the interview can be found here.
"Indeed, there is a big project together which will be out in eight months," Starck said.
This report has fueled rumors of a new Apple television or a new Apple iPhone, setting Apple lovers aflame with tech-lust---“Must have new Apple thing NOW!”
We question whether Starck’s announcement was fueled by his own desire to set the Apple world alight with product desire. Or was it a diversionary tactic by Apple to turn the public’s fickle and short attention span to a shiny new product rather than a messy antitrust lawsuit? Of course this lawsuit is merely a small flea on a big dog, but probably any good publicity is helpful for Apple right now.