Apple, publishers face e-book suit

The late Steve Jobs conspired with the bosses of the world's biggest publishers to mend the cost of electronic books, it was alleged within the Usa last night.

The government launched legal action against Apple and five book publishers for a scheme that it said jacked up the price of e-books, not only on Apple's iPad devices but around the industry and the arena.

Amazon, whose Kindle e-reader helped popularise digital books, was forced to follow Apple's lead and lift prices. The united states Department of Justice investigation unearthed an email from Jobs to the foremost publishing house bosses during which he discussed a brand new business model that will let them set prices, with Apple taking a cut of virtually one-third.

"We'll visit [an] agency model, where you place the associated fee, and we get our 30 per cent, and yes, the client pays a bit more, but that is what you will want anyway," Jobs allegedly wrote.

The US lawsuit coincided with developments in a parallel investigation within the European Union, that could bring down e-book prices within the UK. The ecu said it had received "proposals of possible commitments" from Apple and 4 international book publishers.

The european launched its investigation in December, several months after america Department of Justice began its inquiry.

In keeping with the lawsuit filed yesterday, executives on the publishing houses spoke regularly and met at "upscale Manhattan restaurants" to debate Jobs' offer.

They took pains to hide their tracks, ordering certain emails be "double deleted".

The price of the scheme to shoppers can be up to US$100 million ($122 million), in accordance with Connecticut Attorney General George Jepsen.

Eric Holder, the Obama Administration's Attorney-General, said US$2 or US$3 was added to the typical price of an e-book. "We believe that buyers paid millions of greenbacks more for many of the most effective titles," he said.

Apple's entry into the e-book market, with the launch of the iPad and the related iBookstore in 2010, revolutionised the market.

Until then, Amazon's e-book store operated like a high street bookshop chain, paying a wholesale price after which selling e-books at a value of Amazon's choosing. To reinforce sales of the Kindle within the US, they were being sold at a knock-down price of US$9.99.

That was a figure the publishers thought was too low. Apple's "agency" model would allow publishers to set the buyer price directly, at whatever level they wanted.

The business agreement, which all of the publishers signed within days of one another, stipulated that they wouldn't let anyone else sell e-books for under Apple.

The UK's Pearson Group, owner of Penguin books, is one of the five publishers sued within the US. The others are Macmillan, Hachette, Simon & Schuster and Rupert Murdoch's HarperCollins. The last three immediately agreed settlements with america Government.

- Independent

By Stephen Foley