The Next Chapter: DOJ Sues Apple and Publishing Companies for Alleged e-Book Conspiracy

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How much should a consumer pay for an electronic book (“e-book”)? Amazon used to sell e-books for $9.99. After Apple, Inc. (“Apple”) entered the market with its e-book application for the iPad, and entered into different distribution arrangements with publishers, $14.99 became the new norm. However, with the arrival of the antitrust enforcers, lawsuits, and simultaneous consent decrees with some, but not all, defendants, $9.99 may again become standard.

In the culmination of antitrust/competition investigations by the U.S. Department of Justice Antitrust Division (“DOJ”), state attorneys general, and the European Commission, the DOJ on April 11, 2012 filed a lawsuit against Apple and five of the six largest U.S. book publishers (“Defendant Publishers”) alleging a per se violation of Section 1 of the Sherman Act for conspiring to raise the retail price of e-books. United States v. Apple, Inc., No. 1:12-cv-2826 (S.D.N.Y. filed April 11, 2012). Three of the Defendant Publishers (Hachette, HarperCollins, and Simon & Schuster) agreed to consent decrees with the DOJ, but Apple and the remaining two Defendant Publishers (Macmillan and Penguin) have not reached a settlement. Several states have also filed a lawsuit against Apple, Penguin, Macmillan, and Simon & Schuster. The State of Texas v. Penguin Group (USA) Inc., No. 1:12-cv-00324 (W.D. Tex. Filed April 11, 2012). These enforcement actions follow a number of consumer class actions filed against Apple and the Defendant Publishers across the U.S. in 2011.

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Published In: Antitrust & Trade Regulation Updates, General Business Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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