US Justice Dept. Accuses Apple Of Malpractice

Apple along with publishers, Macmillan and Penguin are being accused by the US Justice Department for conspiring to fix prices of digital books or e-books.

In a calculated & determined effort to underplay Amazon.com Inc.’s dominance of the industry, Apple along with the publishers fixed the prices. The trio wanted to prevent Amazon from discounting the electronic version of books. Apple had vested interest in orchestrating the plan. It let publishers fix the prices of the books & not Vendors.

Amazon used to buy books & their rights in bulk. Thereafter, it used to fix the prices & then sell forward for its readers. Apple on the other hand let publishers set prices for e-books. As long as Apple got a 30 % cut, it was a silent  issue and in-turn the publishers agreed to offer their lowest prices through Apple.

Why Accuse Apple? The Justice Department stated in its complaint filed on Wednesday in federal court in Manhattan that, “Apple clearly understood that its participation in this scheme would result in higher prices to consumers”. US Antitrust Office has increased scrutiny of Apple’s Business practices especially since it has become the world’s most valuable company. The segments that will be part of the investigation are digital publishing, mobile computing and music retail.

The sale of e-books may not have picked up in India, but internationally, it rose 117% in 2011, generating US$ 970 Million. The digital media distribution is all set to re-define online commerce as companies scamper to offer innovative & gripping content to the masses.

With the advent of higher speed mobile broadband, we Indians could soon enjoy such services. But till then lets wait & see the outcome of this law suite.

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