“The Justice Department said on Tuesday it has reached a settlement with Pearson Plc’s Penguin Group in the government’s investigation of alleged price-setting in the e-book market,” David Ingram and Diane Bartz report for Reuters. “Apple is accused of convincing the five publishers to use the “agency model,” that allows publishers to set the price of e-books, and in turn Apple would take a 30 percent cut. Hachette, HarperCollins and Simon & Schuster opted to settle with the Justice Department in April but Apple, Penguin and MacMillan said they would fight the allegations.”

Ingram and Bartz report, “Many people in the book publishing and selling industry accuse Amazon of deeply discounting books to sell them below cost in order to drive other e-book sellers out of business, and then raise prices. Under the terms of the settlement announced on Tuesday, Penguin will drop any agreements with Apple and other ebook sellers that prevents price discounting. It will not be allowed to reinstate the deals for two years.”

“The settlement terms were similar to ones that the Justice Department reached with the other three publishers in April,” Ingram and Bartz report. “The impetus for the settlement could well be a joint venture of Penguin and Random House announced in October by Penguin owner Pearson’s and Random House owner Bertelsmann.”

Read more in the full article here.

MacDailyNews Take: The U.S. DOJ is plainly inept.

Killing real competition for the appearance of competition is just plain stupid.

[Thanks to MacDailyNews Reader “Rainy Day” for the heads up.]

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