US Brings Case Against Apple, 5 Publishers Over E-Books

This is the VOA Special English Economics Report from voaspecialenglish.com | facebook.com/voalearningenglish The United States government says Apple and five book publishers illegally fixed prices of e-books. Three publishers -- Hachette, HarperCollins and Simon & Schuster -- agreed to a settlement announced April eleventh with the Justice Department. The agreement says they must repay millions of dollars and stop giving Apple special treatment. Attorney General Eric Holder said the department will continue to take legal action against Apple and two additional leading publishers, MacMillan and Penguin. He says Apple and the publishers conspired to increase the prices that consumers pay for e-books. He said the Justice Department wants to make sure Americans can buy e-books at a fair price. The department says Apple and the five publishers made an illegal deal to set higher prices for electronic books. Because of this, it says, Americans paid millions of dollars more than they should have. The dispute centers on the influence of Amazon.com. The Internet store had been selling e-books for nine dollars and ninety-nine cents. But the government says Apple made a deal with the publishers two years ago as it prepared to launch the iPad tablet computer. The deal guaranteed Apple thirty percent of the money earned on each e-book sold. It also created a pricing model that required stores to sell at a price set by the publishers and Apple. The price was several dollars higher than the one offered by Amazon. Acting Assistant Attorney General Sharis Pozen said when companies get together and conspire to enter into agreements that eliminate price competition, it crosses the line. "This kind of agreement is illegal and anticompetitive," she said. She added that company officials -- including former Apple chief Steve Jobs -- knew what they were doing at the time. The Justice Department case involves antitrust laws, which aim to halt business methods that crush competition. Sixteen states and Puerto Rico are also bringing their own case. Apple and British publishers Macmillan and Penguin have decided to go to court rather than settle with the Justice Department. Apple says the accusation made against it in the department's lawsuit on April eleventh "is simply not true." It says the launch of the iBookstore in twenty-ten supported competition and broke what it called Amazon's "monopolistic grip on the publishing industry." For VOA Special English, I'm Alex Villarreal. For more business news and other stories for people learning English, go to voaspecialenglish.com. (Adapted from a radio program broadcast 13Apr2012)