Texas Joins Suit Against Apple, Publishers for E-Book Price-Fixing

Texas joined 15 other states and the feds today in suing Apple and three publishing companies for alleged price-fixing e-books.

"Colluding to fix prices violates antitrust laws and raises costs for customers," Texas Attorney General Greg Abbott said. "In this case, three of the nation's largest publishing companies worked together to gain control of retail prices and raise the price of e-books. The defendants colluded to use the agency distribution model to effectively eliminate free market competition and allow publishers -- rather than the marketplace -- to set the price of e-books."

The defendants in the suit include Penguin, Macmillan and Simon & Schuster. The federal Department of Justice has announced settlements with Hachette, HarperCollins and Simon & Schuster.

More than $100 million in overcharges is alleged in the suit.

"Penguin, Simon & Schuster and Macmillan conspired with other publishers and Apple to artificially raise prices by imposing a distribution model in which the publishers set the prices for bestsellers at $12.99 and $14.99," Abbott's office said.

It said, "When Apple prepared to enter the e-book market, the publishers and Apple agreed to adopt an agency distribution model as a mechanism to allow them to fix prices. To enforce their price-fixing scheme, the publishers and Apple relied on contract terms that forced all e-book outlets to sell their products at the same price."

A DOJ rep said the companies all colluded to add two to three dollars to the price of some books.

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