Apple Rejects Justice Dept. Allegations Over E-Book Pricing

By Cynthia Herbert :: 1:29 AM

The Wall Street Journal has reported that Apple has rejected allegations by the U.S. Justice Department’s that it had colluded with publishers over electronic book pricing, saying that the charges were “simply not true.”

Apple spokeswoman Natalie Kerris told the Journal, “The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry.”

In an antitrust lawsuit filed on Wednesday, the Justice Department alleged that CEOs of book publishing companies met regularly to discuss how to respond to steep discounting of their e-books by Amazon, a practice they did not like

The executives allegedly worked with each other to come up with a solution to what one of them called a “wretched $9.99 price point,” according to the suit.

The publishers and Apple then put together  an agreement that lifted the price of many best-selling e-books to $12.99 or $14.99, according to the Justice Department. The publishers then banded together to force that model upon Amazon, the government alleged.

Three of the publishers have reached a settlement with the Justice Department, that agrees to let Amazon and other retailers resume the discounting of e-books. Settlement of a separate lawsuit brought by other U.S. states could lead to tens of millions of dollars in restitution being paid to consumers who bought e-books when they had higher prices.

Amazon called the settlement a “victory for consumers and users of its Kindle e-reading device.” The company promised to renew discounting, which could put pressure on its rivals, like Barnes & Noble.

“We look forward to being allowed to lower prices on more Kindle books,” Amazon said in a statement on the matter.