DOJ Sues Apple Over Price-Fixing Scheme

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David Goldman, CNNMoney

NEW YORK — The U.S. Department of Justice on Wednesday brought a lawsuit against Apple and several publishing companies over a scheme to fix e-book prices, a source with knowledge of the investigation told CNNMoney.

The suit likely stems from the 2010 release of the iPad, when Apple reached an agreement with five publishers to release books on its then-new iBookstore.

A similar investigation led by the European Commission is probing whether Apple colluded to raise the price of e-books with CBS’s Simon & Schuster, News Corp.’s HarperCollins; Hachette Book Group; Pearson’s Penguin unit and Macmillan.

Before the release of the iPad, Amazon’s Kindle was the preeminent e-book reader on the market. Amazon forced publishers to sell most books at $9.99 — a price that came in below the cost of the books.

Apple’s agreement placed many books at so-called “agency pricing,” putting them on the market for about $12.99 and giving Apple a 30% cut. Soon after that, Amazon raised its prices as well.

The DOJ is set to announce its lawsuit at noon, the source said. Apple and the Department of Justice declined to comment.

— CNNMoney’s Aaron Smith and CNN Justice Department Producer Terry Frieden contributed to this report.

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