Friday, April 13, 2012

Apple wanted to break Amazon's 'monoplistic grip'

Apple has broken its silence over allegations that it fixed the price of ebooks - painting itself as a hero for breaking Amazon's "monopolistic grip".

The US Department of Justice this week accused Apple of conspiring with five major book publishers to fix the price of ebooks, in an effort to loosen the stranglehold Amazon had established via its Kindle device.
However, Apple said that the charges are "simply not true" and that it had instead promoted competition.
"The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry," it said in a statement.
DoJ filings lodged this week in a Manhattan Court allege that Apple colluded with publishers to establish the so-called "agency model" of pricing at around the time Apple launched its iPad and the iBookstore.
Hachette, Simon & Schuster, HarperCollins, Penguin Group and Macmillan all signed up to the scheme, which allows publishers to dictate the price of an ebooks as long as they give 30pc of the revenue to the retailer.
The system was then adopted by retailers other than Apple.
By agreeing to the scheme, Apple wanted to establish its iPad as an alternative ereader to the Kindle.
Meanwhile, publishers were worried that Amazon's heavy discounting on ebooks would permanently shift customer expectations and force them to reduce the price on all books - whether digital or printed.
According to the DoJ filings, the chief executives of the five accused publishers met for a series of dinners in a private room of an upmarket restaurant in New York before the agency model was established, allegedly to discuss "business matters".
On at least one occasion, with the chief executive of a sixth publisher present, they discussed "the growth of ebooks and complained about Amazon's role in that growth".
HarperCollins, Hachette and Simon & Schuster have all settled the claims, but Penguin and Macmillan still face litigation. Macmillan has said the DoJ's settlement terms are "too onerous".
Penguin said it would not settle because "we have done nothing wrong. The decisions that we took, many of them costly and difficult, were taken by Penguin alone."

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