Thursday, March 8, 2012

The Justice Department is Going After the Apple

Just as Apple announced their newest version of the iPad, the Feds announced that they are planning to sue Apple and five major publishers for violating anti-trust laws.

The Wall Street Journal has an excellent article today on the issue.  The Justice Department is arguing that Apple sat down with major publishers and convinced them to go to an agency model of distributing their eBooks, where the publisher would set the retail price and distributors (such as Apple, Amazon, and Little Shop of Stories) would act merely as agents of the publishers.

This allowed Apple to get into the market without having to compete with Amazon on price.  It also had the direct effect of allowing publishers to raise the price of their electronic book format.

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