- Oct 23, 2004
- Dar es Salaam
Technology giant Apple and major publishers are being sued by the US Department of Justice over pricing of e-books.
The US accuses Apple and book publishers Hachette, HarperCollins, Macmillan and Penguin of colluding on prices of books on the iPad.
This lawsuit is over the agency model where publishers set the prices of e-books, rather than sellers.
For most physical books publishers set a wholesale price, often about half the cover price, and then let a retailer decide how much they actually want to charge for the title.
This model was initially adopted for e-books but has since been changed for what is known as an agency model.
Under this scheme, publishers set the price of a book and the agent selling it gets a 30% cut. This model was adopted by publishers largely at the prompting of the late Steve Jobs.