updated 09:10 pm EDT, Tue April 10, 2012
DOJ may decide Apple must be forced to change
A pair of sources said Tuesday that the Department of Justice may sue Apple over its e-book pricing concerns as soon as tomorrow, April 11. Deals were being wrapped up with "several" publishers this week, Reuters had heard, but Apple wasn't in discussions and could face legal action soon. No final decision had been made, which given the timing could see a lawsuit moved until later.
The repeatedly leaked investigation has pointed to the primary issue being Apple's war with Amazon over e-book pricing in the last few weeks and months before the iPad was unveiled in January 2010. To appeal to publishers frustrated with Amazon's price dumping, where it sold below cost to artificially boost market share, Apple offered publishers an agency model where they could set the price and paid Apple a flat rate. As a condition, however, Apple demanded "most favored nation" status, where no other e-book store could have a better price.
DOJ officials are believed suspicious that publishers and Apple colluded together, keeping prices artificially high. Publicly, the accusations have been denied, and Apple has contended that the iBookstore and its pricing helped break Amazon's 90 percent market share of e-books at the time.
What publishers would have settled on isn't clear, although they may have been most willing to compromise on no-lower-pricing deals, which with the agency model would let them discount books at will but put the normal prices higher.