Ebooks looking for a class (action) of their own

Ars Technica is reporting a new class action lawsuit in the ebook market:

The essence of the claim is that these publishers [HarperCollins, Hachette Book Group, Macmillan, Penguin Group Inc., and Simon & Schuster Inc.], in coordination with Apple, conspired to nix the low price e-books that Amazon launched in 2007.…

The accusation is that the publishers and Apple fixed prices via two means. First, the publishers embraced an "agency model" arrangement with Apple in which Apple would act as an agent for the publishers, accepting their pricing and simply taking a cut of the proceeds. (Compare this to a model where a company agrees to "buy" each e-book at a set price, but it can then offer those e-books at any price it chooses. Amazon, in fact, was widely believed to be taking a loss on many e-books in order to encourage adoption of e-readers like the Kindle and e-books at the $9.99 price.)

Second, the publishers allegedly agreed not to sell books to any other online venue (like Amazon) at prices lower than those offered to Apple (a "most favored nation" agreement).

It’s far too early to tell whether the Hagens Berman litigation group will able to prove any of this.  Each publisher had the incentive to raise their own prices, and that’s not illegal.  The question thus becomes whether they colluded with Apple and/or the other publishers to do so.  Only time (and very expensive discovery) will tell…

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