The U.S. accused Apple and five of the nation's largest publishers Wednesday of conspiring to raise e-book prices, in a case that could radically reorder the fast-growing business.
In a civil antitrust lawsuit, the justice department alleged that CEOs of the publishing companies met regularly in private dining rooms of upscale manhattan restaurants to discuss how to respond to steep discounting of their e-books by amazon.com inc., a practice they disliked. The executives also called and emailed each other to craft a solution to what one of them called "the wretched $9.99 price point," the suit said.
The five publishers and apple hatched an arrangement that lifted the price of many best-selling e-books to $12.99 or $14.99, according to the suit. The publishers then banded together to impose that model on Amazon, the government alleged.
"As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles," said attorney general Eric Holder.
The publishers and apple denied any wrongdoing. Some publishers said the government's action could harm consumers by giving Amazon excessive control of the industry.
The lawsuit upends an industry already undergoing wrenching change as printed books give way to electronic books that can be transmitted anywhere in seconds. Publishers want to keep their role as gatekeeper and ensure that e-books are profitable.
Three of the publishers settled with the justice department, agreeing to let Amazon and other retailers resume discounting of e-books.
settlement of a separate suit filed by 16 states and U.S. Territories could lead to tens of millions of dollars in restitution to consumers who bought e-books at the higher prices.