Apple Refuses to Give In On DOJ Price-Fixing Case


The Wall Street Journal is reporting this morning that Macmillian, one of the book publishers accused of colluding over e-book pricing by the Department of Justice, has decided to settle.

This means that all five book publishers named in the lawsuit have officially settled out of court with the DOJ, leaving Apple to fend for itself against the government agency.

The suit alleged that Apple, along with Macmillan, Pengiun, Simon & Schuster, HarperCollins, and the Hatchett Book Group, price fixed according to Apple’s pricing model that was released in the iBookstore, allowing publisher to set their own price instead of selling at wholesale priced.

All of the publishers have denied any wrongdoing, but have settled outside of court. Macmillan CEO, John Sargent, said in a statement that the company settled, “because the potential penalties became too high to risk even the possibility of an unfavorable outcome.

The terms of the settlement allow e-book retailers to discount Macmillan’s titles within three days of the settlement, even if a new contract has not yet been finalized. The discount option will continue until November, 2014.

The European Commission followed the U.S.’s lead and also filed an anti-trust lawsuit against Apple and the five major book publishers. Apple settled quickly with the EU and changed its pricing rules after the probe began.

The next question will be whether Apple will give in and settle with the U.S. DOJ, or will they continue to fight the system. While none of the book publishers feel they have violated anti-trust laws, they all seem to think that they could not have won against the government. What did the DOJ tell Macmillan to scare them into a settlement? What makes Apple so fearless?

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