Apple Ebooks Lawsuit Could Settle

Apr 02, 2012

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The U.S. Department of Justice could reach a settlement in the next few weeks with Apple and some of the major publishers suspected of planning to raise ebook prices, Reuters has reported, citing people close to the negotiations.

The potential settlement is expected to eliminate Apple's agreements with five publishers from 2 years ago, which had prevented the publishers from selling lower-priced ebooks through rival retailers such as Amazon or Barnes & Noble. Reuters reported the publishers are Simon & Schuster Inc., a unit of CBS Corp.; Lagardere SCA's Hachette Book Group; Pearson, PLC's Penguin Group USA; Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH; and HarperCollins Publishers, Inc., a unit of News Corp.

The deal could also force a shift, at least temporarily, from an agency model back to a wholesale model, according to Reuters. A switch back to the wholesale model could increase Amazon's revenues by more than $1 billion this year alone, Reuters reported. The impact on Apple is expected to be minimal: According to Reuters, Apple generates about $50 million from ebook sales, a tiny portion of its revenue of more than $100 billion.