Publishers Deny Claim of E-Book Price Fixing with Apple

iBooksSeveral book publishers, including Penguin and Macmillan, were sued by the Justice Department alongside Apple for alleged price fixing after Apple implemented its agency pricing model with the release of the iBookstore, allowing publishers to set the price of their own titles rather then selling at wholesale prices. The DoJ says this cost consumers tens of millions of dollars.

Both Penguin and Macmillan have denied colluding with Apple to fix e-book prices, and say that the accusation is based “entirely on the little circumstantial evidence [the government] was able to locate.”

Three other publishers (Simon & Schuster, HarperCollins and the Hachette Book Group) also denied the price fixing, but entered into a settlement with the government last month.

Penguin and Macmillan, who refused to settle, filed responses in the United States District Court in New York earlier this week. In addition to denying that they violated antitrust laws, the two are taking aim at publishing giant Amazon.

In a 74-page response, Penguin referred to Amazon as “predatory” and “monopolist,” accusing the company of being responsible for anticompetitive behavior, not Penguin, Macmillan, or Apple. Penguin was “concerned that Amazon’s below-cost pricing strategy for certain new release titles would be detrimental to the long term health of the book industry.”

Macmillan’s 26-page response is similar, reading, “Absent any direct evidence of conspiracy, the government’s complaint is necessarily based entirely on the little circumstantial evidence it was able to locate during its extensive investigation, on which it piles innuendo on top of innuendo, stretches facts and implies actions that did not occur and Macmillan denies unequivocally.”

Macmillan adds that the company adopted the agency pricing model of its own volition because the wholesale model “led to Amazon’s monopolization of e-book distribution.”

Apple’s own response was filed last week, and the Cupertino-based company also took aim at Amazon, saying the DoJ is choosing “monopoly, rather than competition.”

If found guilty of violating antitrust laws and price fixing, Apple, Macmillan, and Penguin stand to face hefty fines.

[via The New York Times]

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