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Forget High Gas Prices: Apple and Publishers Accused of eBook Price Hiking

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We’re already being price gouged at the gas pumps but now the U.S. Justice Department is worried that several publishing companies are trying to jack up the prices on eBooks too. Incredible. Maybe I should start following my mother’s advice and use the library more.

According to The Wall Street Journal, the Justice Department has alerted Apple, Simon & Schuster, Hachette Book Group, Penguin Group, Macmillian and Harper Collins of conspiring to hike up the prices of eBooks across the board. In such a scenario, all of the publishers win — especially since (I figure) eBooks are cheaper to make than good old dead-tree books, while consumers lose. It’s especially unfortunate given the incredible increase in sales of tablets and eReaders, such as the iPad, Kindle Fire and Barnes & Noble Nook.

The story, as The Wall Street Journal explains, goes a little like this: apparently publishers typically sold books to retailers, such as Barnes & Noble or Borders (R.I.P.) for half of the typical cover price. If a retailer decided to do so, it could then offer sales and then offer the books for less than that pre-determined cover price. Hence the Barnes & Noble Book Club deals, etc. That all changed with the eBook model, though.

Amazon hit the streets running and attracted its customer base by offering a large majority of eBooks for $9.99. A steal, considering new releases can often cost twice that. Publishers, of course, wanted the old model back. So when Apple entered the game, it decided it would allow publishers to dictate the price and that it would just take 30% of each book sold. That scenario allowed book publishers and Apple to win. If book publishers set higher prices, then Apple would be taking a higher cut of the revenues.

In the end, the Justice Department believes that Apple and the other publishers are violating antitrust laws. Am I a bit disgusted? Yeah, I suppose so. But that’s business. I’ll just continue buying my books from Amazon and Barnes & Noble instead.

[via The Wall Street Journal]

Todd Haselton

Todd Haselton has been writing professionally since 2006 during his undergraduate days at Lehigh University. He started out as an intern with...