Apple's alleged e-book price fixing: What you need to know

Damon Brown | March 9, 2012
The Justice Department has thrown a wet blanket on Apple's iPad announcement week, warning Apple and the five biggest publishers that it will sue them for e-book pricing collusion. The threat has been on the horizon for months, but today's news was the first formal statement from the government.

The Justice Department has thrown a wet blanket on Apple's iPad announcement week, warning Apple and the five biggest publishers that it will sue them for e-book pricing collusion. The threat has been on the horizon for months, but today's news was the first formal statement from the government.

What Apple Did

Apple's e-book controversy began in late 2009, when it finalized plans for the upcoming iBookstore. Here's how it unfolded:

The DOJ's Charges

The Justice Department claims that Apple's agency model approach is essentially collusion, according to a Reuters report. Here's the DOJ's evidence:

The result is that consumers lose, since they're left with higher prices and lukewarm competition. A parallel class action lawsuit is also occurring through the Seattle law firm Hagens, Berman, Sobol, Shapiro. Announced in late 2011, the lawsuit argued the same points and may have put the issue on the Justice Department's radar.