updated 05:10 pm EDT, Fri March 30, 2012
Leaks have Apple giving up lowest-price claue
Apple may be ready to make important concessions to settle a possible Department of Justice lawsuit over e-book pricing, a pair of sources claimed Friday. Although not concrete, a deal could come "in the next few weeks," the Reuters insiders said. The core of the deal would revolve around Apple dropping its "most favored nation" clause, which bars publishers from offering a lower price at other stores.
The deal might also reinstate the wholesale model, where the store sets the price and publishers are paid a flat rate for any book, regardless of its selling cost.
None of the involved parties would comment.
The DOJ is said to suspect that Apple may have colluded five top publishers in adopting the agency model just ahead of the launch of the iPad and the matching iBookstore. By letting publishers set the prices and having that be the new minimum, Apple gave publishers relief from concerns that Amazon was underpricing Kindle e-books but also forced every other store to raise its prices if it wanted to do business with Apple.
Apple has claimed that Steve Jobs' remarks as quoted by biographer Walter Isaacson have been misinterpreted. It has argued that Apple just wanted to be more competitive and pointed to Amazon having a near-monopoly of e-books at the time. Amazon still leads, but at 65 percent now faces substantial competition from Apple (10 percent) and Barnes & Noble (20 percent).