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US Justice Department also investigating Apple and others for ebook price fixing

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The US Department of Justice has joined the European Commission and confirmed that it's investigating Apple and publishers for ebook price fixing.

ipad ibookstore
ipad ibookstore

We heard just yesterday that the European Commission was investigating possible ebook price fixing by Apple and five major book publishers, and now the US Department of Justice has confirmed that it's investigating the situation. (To be clear, the news is the confirmation, not the investigation — that's been rumored since last year.) Like the European investigation, the DOJ is interested in the "agency model" of selling books, whereby the publishers set the final prices and Apple takes a cut; that's in contrast to the wholesale model used by Amazon in which the publishers sell the books to the retailer and Amazon decides the final prices at will. By agreeing to the agency model, Apple gave the publishers enormous leverage against Amazon, leading to what the Wall Street Journal says has been a year-long investigation into "effectively an industry-wide price increase."

For their part, the publishers deny any price-fixing activity and have defended the agency model, but that's an awful lot of heat on their tactics — we'll see how this all shakes out.