The US Attorney General has filed a civil antitrust action against Apple and a number of publishers, accusing them of colluding to sell e-books for higher prices.
In a filing submitted yesterday in New York, the US Justice Department accused Apple and a range of publishers - including HarperCollins Publishers and Hachette Book Group - of limiting price competition by changing the way e-books were sold.
The filing claims Apple and the publishers agreed to alter the existing business model for selling e-books and tablets, replacing the wholesale retail model with a system that saw publishers appoint retail groups as agents, who were powerless to cut prices.
The Attorney General alleges the move was done to combat Amazon - the online retailer - which was selling e-books for $9.99.
In the suit it claims the resulting agreements between Apple and the publishers cost consumers "tens of millions of dollars", after prices were typically hiked to between $12.99 and $14.99.
It adds: "The purpose of this lawsuit is to enjoin the Publisher Defendants and Apple from further violations of the nation's antitrust laws and to restore the competition that has been lost due to the Publisher Defendants' and Apple's illegal acts."
The filing even quotes the late Steve Jobs, CEO of Apple until his death last year, as saying "We'll go to an agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that's what you want anyway."
Yesterday Apple's shares shrugged off the lawsuit, closing at $626.20, after falling just $2.24 or 0.4%.
Three publishers - News Corp's HarperCollins, CBS Corp's Simon & Schuster and Lagardere SCA's Hachette Book Group - have agreed a settlement to end the dispute.
Publishers Hachette and HarperCollins also settled with a group of U.S. states, agreeing to pay $51 million to consumers who bought e-books.
Publishers Macmillan and Pearson's Penguin Group plan to fight the Justice Department charges, along with Apple, according to reports.
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