"Terrified" by Amazon's Kindle e-reader and discounted e-book pricing, five major publishers allegedly acted together to increase e-book prices and compel Amazon to abandon its discount sales strategy. That's the gist of a new class action antitrust lawsuit filed in the US District Court for the Northern District of California by the Hagens Berman litigation group.
The five book sellers named in the suit are HarperCollins, Hachette Book Group, Macmillan, Penguin Group Inc., and Simon & Schuster Inc, plus one more defendant: Apple.
"Fortunately for the publishers, they had a co-conspirator as terrified as they were over Amazon's popularity and pricing structure, and that was Apple," charges Hagen Berman attorney Steve Berman. "We intend to prove that Apple needed a way to neutralize Amazon's Kindle before its popularity could challenge the upcoming introduction of the iPad, a device Apple intended to compete as an e-reader."
The essence of the claim is that these publishers, in coordination with Apple, conspired to nix the low price e-books that Amazon launched in 2007. Amazon wanted to quickly gain market share with its Kindle, the court filing observes, the first version of which sold out in less than a quarter of a day. And so, capitalizing on its "first mover" advantage, Amazon sold e-books at prices conspicuously lower than physical books—many titles were made available for $9.99.
This had to be stopped, the class action charges.
"What is most loathsome about the behavior of Apple and the publishers is that it is stifling the power of innovation, the very thing Apple purports to champion," Berman's press release observes. "A few big business heavyweights are taking a powerful advancement of technology that would benefit consumers and suffocating it to protect profit margins and market-share."
Story continues in more detail at the page linked.
Very much looking forward to seeing how this plays out.
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