Apple iBook Price Fixing

Taken from:
http://www.knowyourmobile.com/features/1320985/a_complete_guide_to_the_apple_ibooks_price_fixing_scandal.html

The article notes: "Apple’s on-going legal dispute with the US government concerning the price of ebooks reached a head this week, following the news that the US Department of Justice plans to sue Apple.

The DOJ claims that Apple, along with several major book publishers, came together in secret to raise the prices of ebooks – a practice generally known as 'price-fixing'.

But it is not just Apple that’s in hot water with the US government. The antitrust compliant accuses several major publishers, including household brands like Penguin, Harper Collins and Macmillan, of openly colluding to raise the price of ebooks."

Seemingly the article suggests that the major publishers were more the instigators and Apple went along with the plan.  

The article goes on to say: "The main problem facing The Publishers was that Amazon was just too big. No one, including Apple, could complete with the scale of Amazon’s ebook business model. It had the Kindle, the market share, and, most importantly, the hearts and minds of consumers.

Apple, nonetheless, ‘believed it would be able to trounce Amazon by opening up [its] own ebook store’ in the form of iBooks. Obviously this didn’t happen, but it wasn’t for want of trying, and by 2009 the intense competition in the ebook market had driven the price of ‘popular ebooks’ down to $9.99, reducing retailer margins to a level that ‘Apple found unattractive.’  "

The ebook market has substantially grown in the past five years.  Amazon has said that it sold more ebooks in December than traditional books.  With the Kindle and Nook and iPad devices - the demand for ebooks is growing.

Will this get settled?  Yes.  Does it tarnish Apple's reputation?  Probably not.  Will it make ebooks cheaper in the long run?  Probably.