Iowa files antitrust lawsuit for price fixing with 15 other states

BY KRISTEN EAST | APRIL 12, 2012 6:30 AM

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Following several antitrust lawsuits filed against Apple and numerous major book publishers Wednesday, one University of Iowa law professor said the government needs more sufficient evidence to move forward.

"The government does not have explicit evidence that they agreed with each other, through something like a secret wiretap or something else," said Herbert Hovenkamp. "… What it does have is a lot of circumstantial evidence."

Iowa was one of 16 states to file a civil antitrust lawsuit Wednesday against three book publishers and Apple on claims of price fixing.

"We're alleging that these publishers deliberately manipulated e-book prices," said Iowa Attorney General Tom Miller in a news release. "That means consumers paid more than they should have. And that's against the law."

According to the release, the lawsuit action follows a two-year investigation — led by the Texas Office of the Attorney General — of allegations that these companies colluded to raise e-book prices.

The investigation revealed that Penguin, Simon & Schuster, and Macmillan worked with other publishers and Apple to raise prices, including setting the costs for bestsellers at $12.99 and $14.99.

But one UI Press official said prior investigations against Apple kept the UI from signing with the company.

"Apple is working with publishers to set one fixed price across the board … that's collusion," said Jim McCoy, the UI Press director. "We sign with almost everyone that is working in this marketplace except for Apple — this lawsuit is why."

McCoy said he doesn't know of any university presses that have signed with Apple because of the ongoing investigation.

"I can't speak for my colleagues, but I thought there needed to be a lot more clarification on [Apple's] price structures," he said. "I like to control how I price a book."

McCoy told The Daily Iowan in February the press has approximately 800 books in print, with roughly 75 percent of those books digitized. E-books represent around 5 percent of total book sales.

The U.S. Department of Justice also filed a similar lawsuit Wednesday in a U.S. district court against Apple and major book publishers.

Retailers have been allowed to set their own prices on books, but publishers adopted a pricing policy for e-books two years ago that instead allowed them to set e-book prices.

The Justice Department filed a suit against five national book publishers, but three — Hachette, HarperCollins, and Simon & Schuster — have agreed to a proposed settlement.

"As part of this commitment, the department has reached a settlement with three of the nation's largest book publishers — and will continue to litigate against Apple and two additional leading publishers — for conspiring to increase the prices that consumers pay for e-books," said U.S. Attorney General Eric Holder at a press conference Wednesday.

Hovenkamp said the Justice Department needs to prove the publishers not only arranged prices with Apple but also with each other.

"Each of them know that they were all talking to Apple — the agreements made with Apple were virtually identical," he said. "It's a question of whether that's enough evidence if publishers agreed with each other to warrant an antitrust claim."

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