Feds say Steve Jobs conspired on e-book pricing

This post has been corrected. See note below.

WASHINGTON — Former Apple Inc. Chief Executive Steve Jobs and top executives at five major book publishers illegally conspired to raise the prices of e-books, costing consumers tens of millions of dollars, federal and state officials alleged in antitrust suits filed Wednesday.

The collusion began in 2009 and price fixing took effect with the launch of the iPad in early 2010, boosting the average cost of e-books by $2 to $3 each “virtually overnight,” said Sharis Pozen, the acting head of the Justice Department‘s antitrust division.

“We allege that these executives knew full well what they were doing. That is, taking steps to make sure the prices consumers paid for e-books were higher,” she said in announcing the federal suit.

“‘The customer pays a little more, but that’s what you want anyway,'” Pozen quoted Jobs as saying at one point in the negotiations with publishers.

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The suit said Apple proudly described the price-fixing plan — which gave the iPad maker a guaranteed 30% commission on each e-book it sold through its online marketplace — as an “aikido move,” referring to the Japanese martial art.

The suit, and another by 16 state attorneys general, was filed against Apple, Simon & Schuster Inc., Hachette Book Group, HarperCollins Publishers, Macmillan and Penguin Group.

Hachette, HarperCollins and Simon & Schuster reached a settlement with the Justice Department that would require them to allow retailers such as Amazon and Barnes & Noble to reduce the prices of e-books they sell from the publishers, the Justice Department said.

The settlement, if approved by a federal judge, would restore competition to the e-book market, Pozen said.

In addition, Hachette and HarperCollins agreed to settle the states’ lawsuit and pay a total of about $51 million in restitution to e-book customers nationwide. The states are still negotiating restitution with Simon & Schuster.



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