Publisher Settles in E-book Price Fixing Case

18.05.2012

All the lawsuits allege that Apple and the publishers to fix the price of e-books because of Amazon's dominance of the market. Prior to the implementation of the alleged conspiracy in 2010, Amazon had 90 percent of the e-book market. Afterward, its share dropped to 60 percent.

Many legal experts believe the antitrust case against the publishers is stronger than the one against Apple.

In its agreement with the publishers to sell e-books, Apple received favorable terms as a reward for its participation in the price-fixing scheme, the DOJ argues.

That agreement contains something called a "most-favored nation" clause. Typically, those clauses are included in contracts to protect a buyer from wholesale price fluctuations.

Apple's most-favored nation clause was different, according to the Justice Department. "[I]nstead of [a clause] designed to protect Apple's ability to compete, this [clause] was designed to protect Apple from having to compete on price at all, while still maintaining Apple's 30 percent margin," the Justice Department says in its complaint against Apple and the publishers.