Thirty-one states join antitrust suit against Apple

Bryan Cohen May 15, 2012, 5:00am


WASHINGTON, D.C. (Legal Newsline) - A group of 31 state attorneys general have joined a lawsuit against Apple Inc. and two other e-book publishers for allegedly violating federal and state antitrust laws.

Penguin, MacMillian and Apple Inc. allegedly conspired to fix the prices of e-books. The suit against them was originally filed by Connecticut and Texas. The lawsuit was joined by West Virginia, Vermont, Tennessee, South Dakota, Puerto Rico, Pennsylvania, Ohio, Missouri, Maryland, Iowa, Illinois, Colorado, Arizona and Alaska. More states joined the amended complaint on Friday, including Wisconsin, Utah, North Dakota, New York, New Mexico, Nebraska, Michigan, Massachusetts, Louisiana, Kansas, Indiana, Idaho, the District of Columbia, Delaware, Arkansas, Alabama and Virginia.

"We do not want businesses interfering with the markets by illegally conspiring to fix prices," Virginia Attorney General Ken Cuccinelli said.

The states filed a motion with the United District Court for the Southern District of New York that seeks permission to file an amended complaint against the defendants. The lawsuit alleges that the publishers conspired to raise the prices of e-books by coming up with a new model of distribution. The publishers were allegedly unhappy that retailer competition had pushed e-book prices to a level they deemed too low.

Previously, e-books were sold wholesale to booksellers who would then set the retail price. The publishers allegedly adopted an agency model of distribution by taking the authority to set prices away from the retailers and getting rid of price competition. The alleged agreement resulted in e-book consumers being overcharged by over $100 million.

The lawsuit seeks injunctive relief to eliminate the market effects of the alleged agreement in addition to restitution for consumers who were overcharged for the books.

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