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Originally published August 9, 2011 at 6:39 PM | Page modified August 10, 2011 at 12:17 PM

Suit claims Apple, publishers colluded to fix prices on e-books

A Seattle law firm has filed a class-action lawsuit claiming Apple, along with five big publishing houses, colluded to illegally fix prices for popular electronic-book titles to boost their own profits and beat Amazon's prices.

Seattle Times technology reporter

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A Seattle law firm has filed a class-action lawsuit claiming Apple, along with five big publishing houses, colluded to illegally fix prices for popular electronic-book titles to boost profits and beat Amazon.com's prices.

The suit was filed Tuesday in U.S. District Court for the Northern District of California by the Hagens Berman law firm on behalf of plaintiffs Anthony Petru, of Oakland, Calif., Marcus Mathis, of Natchez, Miss. — both e-book purchasers — and "all others similarly situated."

In addition to Apple, the lawsuit names as defendants HarperCollins Publishers, Hachette Book Group, Macmillan Publishers, Penguin Group, and Simon & Schuster.

An Apple spokeswoman declined to comment, citing pending litigation. Representatives of the publishers could not immediately be reached.

The suit claims that publishers feared e-books would lead to lower consumer prices for books and threaten profit margins.

"So, faced with disruptive e-book technology that threatened their inefficient and antiquated business model, several major book publishers, working with Apple Inc., decided free-market competition should not be allowed to work — together they coordinated their activities to fight back in an effort to restrain trade and retard innovation," the suit says.

When Amazon released the Kindle e-book reader in 2007, it set the price for many of its popular new-release e-books at $9.99.

The suit claims the publishers then banded together to uniformly raise prices on all their first-release fiction and nonfiction titles, with the help of Apple.

Apple's motivation to do so, the suit contends, stems from the company's desire to distribute, store and access digital media — including e-books — through its iPads and iPhones.

"We intend to prove that Apple needed a way to neutralize Amazon's Kindle before its popularity could challenge the upcoming introduction of the iPad, a device Apple intended to compete as an e-reader," plaintiffs' attorney Steve Berman said in a news release.

A spokesperson for Amazon could not immediately be reached for comment.

Janet I. Tu: 206-464-2272 or jtu@seattletimes.com

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