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Price fixing on e-books

by EMILY FODOR Editor-in-Chief

After suspicions that Apple and five other major publishers were allegedly colluding prices of e-books, the Justice Department began seriously investigating the incident. As price fixing in any market is illegal, there is a threat of suing Apple and five of the six major publishing houses involved. The price fixing idea comes following Amazon’s stronghold on prices of books in their market. Apple, believing they found a way to offset that aspect, gathered the publishing houses and told them they could set the prices high if they did not sell lower to any other companies. By allowing publishing houses to create their own prices for the e-books, they can cash in along with their partner in crime, Apple, before the new iPad comes out. Sophomore Taylor Evanchik says, “If I were in the business, I wouldn’t know how to react. Apple already has an unfair advantage without this price fixing deal.” Not only does the colluding affect their e-book prices, but it shapes other publishers prices who are simply trying to compete. Due to the fact that they do not want a long drawn out process to fix this situation, a settlement would be ideal, but no one knows what it would entail. Trying to negotiate by sending lawyers to Washington DC would take a couple of years in the least, while the government wants to correct the problem immediately before things get even more out of hand. The ironic part of all of this is the fact that if publishers just lowered their prices to about $5.99 from the extremely high $12.99, more people would favor and purchase e-books. An interesting aspect of the case that may be brought to light if the case reaches a legitimate Justice Department lawsuit is what Steve Jobs told his biographer, Walter Isaacson, about taking down Amazon before his death. “We told the publishers, ‘We’ll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that’s what you want anyway,” Jobs told his biographer. “They went to Amazon and said, ‘You’re going to sign an agency contract or we’re not going to give you the books.'” Sophomore Marc Galluccio says, “I have an iPhone and I never knew what was behind the scenes in the Apple industry.” In addition,  many publishing companies, including Harper Collins, Penguin, and Simon & Schuster, fear that if their e-books are set as a typical internet book should be, people would see paperback prices as completely unreasonable and totally faze them out. The publishing industries are not ready for such an immediate change; however, this does not call for illegal action on either part.

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