May 29th, 2013, 1:26 pm

In less than a week, Apple could meet Connecticut and Texas in court to face allegations that the tech giant colluded to fix prices of electronic books.


Connecticut Attorney General George Jepsen's office refused to comment on the pending court date with Apple on June 3 over the company's alleged role in a conspiracy with five publishers to fix eBook prices and wrest dominance of the market away from online bookseller Amazon.com.


Just last week, Penguin Group settled allegations related to its part in the controversy by agreeing to pay $75 million. Penguin was the last publisher to settle accusations, which were filed in federal court more than a year ago. The company did not admit to any wrongdoing. So far, the publishers have agreed to $164 million in payments and consumers who were affected are entitled to rebates.


"Consumers are entitled to a fair, open and competitive marketplace," Jepsen said in a press release announcing the Penguin deal, before pledging with Texas to "aggressively seek to obtain additional compensation for consumers in our respective states who have been injured by the illegal conspiracy we allege in our complaint."


Thirty-one states, Puerto Rico and Washington, D.C., are part of the lawsuit that claims Apple, with MacMillan, Penguin, Simon and Schuster, Hachette Books and Harper Collins, agreed to fix the price of best sellers. Some of the publishers were accused of participating in a conspiracy as early as 2008 with the rest joining in 2009 and Apple facilitating in January of 2010.


At the heart of the allegations, the states say that the publishers with Apple moved to a system where retailers like Amazon and Barnes & Noble would have to act more like agents of the publishers rather than retailers. The difference, according to court documents, is that in an agent model the publishers set the price, while in a retail model, the retailer sets the price. Prior to 2010, Amazon and Barnes & Noble priced the books as they saw fit, which the states claim was hurting some publishers' print book sales.


Amazon in particular was identified as a concern to the publishers for providing deep discounts on best sellers as a way to bring people to its website and gain sales on other items.


Prices for eBooks went up as much as 30 percent, the states claim.


Apple, which did not return requests for comment Tuesday, has filed a reply in court claiming it did nothing wrong. In particular, its attorneys took umbrage at the claim that the computer maker's entry into the ebook market increased retail prices. Overall, Apple contends prices have fallen and the company noted, "Apple also fundamentally transformed the e-reading experience, leaving rudimentary, black-and-white, and expensive single-purpose e-readers (e.g., the Kindle) in the dust."


The California-based company is asking the judge to rule in its favor, calling Jepsen's and Texas' case a flight from reality.


There are other battles in this case beyond whether prices were fixed. Amazon has filed a motion to have certain information redacted from the record regarding its business practices, which Apple has strenuously fought to keep in, according to court documents.


Ultimately, this case could provide a better read on how eBooks are made and sold.


Consumers who think they might have been affected by this alleged conspiracy can visit www.ebookagsettlements.com.

May 29th, 2013, 1:26 pm