Apple: E-Book Antitrust Charge "Simply Not True"

UPDATE: Apple responded publicly for the first time on Thursday to Justice Department charges of price-fixing, calling the antitrust allegations "simply not true."

The Wall Street Journal reports that the response came from spokeswoman Natalie Kerris, who compared the company's e-book pricing practices to those of its app store. "Just as we’ve allowed developers to set prices on the app store, publishers set prices on the iBookstore," she said, adding that the launch of its bookstore broke "Amazon's monopolistic grip on the publishing industry."

Read more over at the Wall Street Journal.

Wednesday, April 11: The Justice Department filed an antitrust lawsuit against Apple and five publishers on Wednesday, claiming collusion over the pricing of e-books, Bloomberg reports.

Sources familiar with the matter tell Politico and Reuters that several of the publishers are expected to agree to a settlement in the case before the end of the week. There has been no indication, however, that Apple will strike a deal to avoid what could be a highly-publicized and costly court battle.

Federal officials had reportedly previously warned Apple and the publishers that a lawsuit was potentially forthcoming. The five publishers named in the suit are: Hachette SA, HarperCollins, Macmillan, Penguin, and Simon & Schuster.

Under a traditional book selling model, publishers had previously sold books for half the cover price, allowing retailers to set their own store price. But around the time Apple introduced its first iPad in 2010, the company moved to an "agency" model, where publishers decide the book price and Apple takes a 30-percent cut. As part of that move, Apple also reportedly stipulated that publishers couldn't let rival retailers like Amazon sell the same book for less, in effect making the agency model the new standard for much of the industry.

Justice Department lawyers say that Apple and the publishers violated federal antitrust laws by enacting their e-book plan. The publishers, meanwhile, deny they acted jointly to hike up the prices.

Slate MoneyBox columnist Matt Yglesias will have more on the lawsuit shortly. In the meantime, you check out his last piece on the topic here. Here's a snippet to whet your appetite:

"[W]hatever the facts of the case, the Justice Department’s notion that we should fear a book publishers’ cartel is borderline absurd, on par with worrying about price-fixing in the horse-and-buggy market." Read more here.