Publishers and Apple warned over ebook pricing

Five US-based publishers have been threatened with legal action by the Department of Justice (DoJ) over the pricing of ebooks.

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The DoJ claims that Simon and Schuster, Hachette, the US arm of Penguin, Macmillan and HarperCollins Inc. have conspired to raise the price of ebooks.

Apple is also included in the threat of legal action because the company's "agency" selling model is the reason for the claim that the companies are effectively colluding.

The story centres on the difference between the traditional "wholesale" model of bookselling - where the manufacturer sells books to the retailer at roughly half the RRP and then the retailer chooses the selling price - to the "agency" way of selling promoted by Apple.

This sees the publisher setting the price at which the ebook must be sold and the retailer taking a slice of around 30 per cent.

The DoJ claims that this leaves retailers unable to discount books, thereby inflating the price.

It also says that, as one of the dominant platforms, Apple has the influence to drive up book prices across the market.

And it also fears that publishers could force rivals such as Amazon to change pricing policy - and it is claimed that this has happened.

The DoJ claims that consumers end up losing out by paying more then they might otherwise have to for books, but others claim the move was necessary to prevent Amazon gaining a stranglehold on the market and undercutting all its rivals.

What do you think? Is the system a fair one? Comment below...