Lawsuit: Apple, Publishers Colluded On E-Book Prices

Five big publishers have been setting the price of their e-books, instead of retailers, like Amazon, which had been selling e-books below cost to attract people to the Kindle. It's legal for publishers to set the price — unless they conspired to do so. Class action litigator Steve Berman says that's what they did, with the help of Apple and the new iPad.

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STEVE INSKEEP, host:

A new lawsuit accuses publishers and Apple Computer of illegally fixing the price of e-books.

NPR's Martin Kaste reports from Seattle.

MARTIN KASTE: Class-action litigator Steve Berman loves his Kindle and he fondly remembers the days when e-books were cheaper.

Mr. STEVE BERMAN (Attorney): I love getting $9.99 books. And all of a sudden, I'm looking at my thing going, why is everything $12.99? What happened?

KASTE: A year and a half ago, five big publishers announced they would start setting the price of their e-books, instead of retailers, like Amazon, which had been selling e-books below cost to attract people to the Kindle. It's legal for publishers to set the price unless they conspire to do so.

Berman says they did, with the help of Apple and the new iPad. The companies won't comment.

But industry expert Mike Shatzkin says the publishers had good reason to want to break Amazon's ability to dictate the price of e-books.

Mr. MIKE SHATZKIN (Founder/CEO, The Idea Logical Company): After a while, Amazon would say: You know, we're really tired of you guys charging us $15 for these books we sell for $10. So you know what? We're going to start paying you six. And if Amazon had a big enough share of the business, they wouldn't have any choice.

KASTE: Publishers are now breathing easier. Shatzkin says since last year, Amazon's share of the e-book market has dropped from 90 percent to about 55 percent.

Martin Kaste, NPR news, Seattle.

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