16 U.S. states join DOJ’s eBook antitrust action against Apple, publishers

“Sixteen states have piled lawsuits on top of Apple, Macmillan, Penguin, and Simon and Schuster, four companies which were served with an antitrust lawsuit this morning by the Department of Justice.,” Meghan Kelly reports for VentureBeat.

“The suit is led by Texas and Connecticut, which, unlike the DOJ, are demanding financial damages be paid,” Kelly reports. “Other states include Alaska, Arizona, Colorado, Illinois, Iowa, Maryland, Missouri, Ohio, Oregon, Pennsylvania, South Dakota, Tennessee, Vermont and West Virginia and the Commonwealth of Puerto Rico.”

Kelly reports, “The Department of Justice sued Apple and publishers Hachette, HarperCollins, Macmillan, Simon and Schuster, and Penguin this morning for its new ‘agency pricing’ model… Thus far Hachette, Harper Collins and Simon and Schuster are said to have agreed to settle the case with the Department of Justice. Hachette and Harper Collins are the only two to have settled with the states thus far, offering a restitution to consumers. Macmillian, however, says it will follow the cases to court.”

Read more in the full article here.

[Thanks to MacDailyNews Readers “Fred Mertz,” Sarah,” and “Ottawa Mark” for the heads up.]

MacDailyNews Take: Okay, Connecticut, we get it. The bottomless vapidity in Dick Blumenthal’s eyes gives us hideous vertigo every single time. Enough said.

Now, as for Texas, if he hasn’t already, Tim ought to get good ol’ Rick on the horn and explain to him how that proposed Austin campus and all of those high-paying jobs just skedaddled on over to one of 34 other U.S. states that happen to possess at least an ounce of common sense. We can only imagine the phone call Steve Jobs would have placed.

You see, you can’t have it both ways and you shouldn’t enter into a gunfight if all you’ve got is a peashooter and a bad haircut. Especially when the other side has thermonuclear options.

Note to every government entity that might think they want to play games: Apple has plenty of potential moves.

Related articles:
Travis County considers giving Apple 80% tax break for Austin campus – April 5, 2012
Austin city council unanimously approves $8.6 million dollars in incentives for Apple Inc. – March 23, 2012
Texas Governor Rick Perry announces Apple to invest $304 million, create 3,600 new jobs in Austin – March 9, 2012

Australian gov’t considers suing Apple, five major publishers over eBook pricing – April 12, 2012
DOJ’s panties in a bunch over Apple and eBooks, but what about Amazon? – April 12, 2012
Antitrust experts: Apple likely to beat U.S. DOJ, win its eBook lawsuit – April 12, 2012
Why the market shrugged off the Apple antitrust suit – April 11, 2012
What’s wrong with the U.S. DOJ? – April 11, 2012
Macmillan CEO blasts U.S. DOJ; gov’t on verge of killing real competition for appearance of competition – April 11, 2012
U.S. DOJ hits Apple,major publishers with antitrust lawsuit, alleges collusion on eBook prices – April 11, 2012
U.S. DOJ may sue Apple over ebook price-fixing as early as today, sources say – April 11, 2012


  1. Thank you for pointing out this isn’t just your ( I’m a greasy Canuck) federal government pursuing this suit. Without going through the merits (or lack thereof) of the case, this is more about fair business practices, and not some socialism v. capitalism battle.

    1. Ottowamark,
      With respect to Apple, at least, “socialism v. capitalism” is EXACTLY what this is all about. State politicians, apparently including good ‘ole boy Rick Perry, looking to screw “big corporations” out of their money/freedom in order to persuade the gullible that they’re “looking out for you” so they get re-elected. Or did you think that “socialism” only occurs at the federal level?

      1. Please, for the love of God, look up the word “socialism” in a dictionary. Maybe even read the Wikipedia article. Or a book.

        Even the broadest conception of “socialism” does not encompass antitrust law, which you obviously know nothing about (you probably think monopoly power is all that’s required for monopolization suits…). Not even the most libertarian anti-interventionist wing of antitrust theory and practice would agree that it has a damn thing to do with “screw[ing] ‘big corporations.'” And as for your theory that it’s about Rick Perry getting re-elected, it suggests you also know nothing about how politics work. You need money to get re-elected. Big corporations are the ones that give it to you, especially if you are Rick Perry. Also, Texas just spent an insane amount of money to get Apple to expand its Austin campus rather than another on.

    1. I have to be missing something here.

      I believe Apple’s rules are:
      • Can’t sell it cheeper somewhere else.
      • If it isn’t free then they want 30% of sale.
      • I assume no porn (but have not read that yet).

      So, nothing wrong here. Maybe it is missing the kick back to the key federal government politicians or employees. The old common street thugs use to call that protection money. Now it is campaign donations and stuff like that. So, who investigates the street thugs or gangs at the Department of Justice?

  2. Feeding frenzy. I hope they all go home disappointed. The biggest problem is that they are spending my tax dollars to pursue this crap, supposedly for my benefit. Yeah, right.

  3. quiviran, I am proud of being a fiscal conservative and I do believe in States rights. I also believe in your rights and you can bring a lawsuit against somebody if you want to just like these state did.

    On the other hand, I think this is a bizarre suit that should never have been pressed. I fail to see the problem with the agency model and actually think it fits well within good old conservative capitalism.

  4. I think it would be fine to sue the publishers — they were colluding to set prices it seems like. But why Apple, an e-book upstart with low marketshare, should be sued is beyond me. They didn’t force anyone to sign the contract.

    1. uh,  has the money…this isn’t about states rights, consumer rights, anti-monopolism…this is about money.  has it, the cock-sucking government and its cadre of cock-sucking lawyers want it. When a private company has more capital than the United States federal government, it is truly that simple. The blood-suckers despise success.

      1. Sounds like a drunk bud of mine after way too many beers. No logic, but really really loud. Government wanting Apple’s money? Or is it states wanting Apple’s money? Maybe read the details is a good idea, just not today.
        As long as you’re on the trail of government, don’t forget to include sixteen (and growing) states of both stripes, suing as well.

      2. I was unaware that Apple was a private company.

        Sadly there are a different set of rules when you get big and have a lot of money. We saw it with MS and the DOJ in the past (not saying that MS was in the right, just that they became a target when they got big).

        Once you reach a certain size every decision you make will be looked at by the government as an attempt to manipulate your industry or control your competition.

        Standard oil experienced it
        AT&T was there
        MS went down that road

        Now it just might be Apple’s turn..

        Expect the lawyers and bean counters to have a more vocal role in running apple in the years ahead.

        1. The difference is that all of those companies you mentioned were monopolies in their field. Amazingly, Apple is as huge as it is and not really a monopoly in anything. The laws are specifically in place to restrain the unfair use of monopoly powers, not just the moves of a “big” company.

  5. Someday they will get it through their heads that it was Amazon acting in a monopolistic fashion by undercutting all competitors by selling below value. They were on a path to wipe out independent sellers in all states. Only a Monopoly can fund sales at below cost to keep a competitive advantage. It doesn’t matter that a digital product has no material cost, if the sellers – (authors and publishers) cannot control the value of their product, then the monopoly can devalue it to nothing – funded by other sources of revenue. Apple evened out the playing field for everyone. The DOJ and 16 states have their collective heads up their Hind quarters.

    1. Agreed. Scott Throw, a lawyer and good author (Presumed Innocent, Burden of Proff and others) as well as prez of Authors Guild summed the case up: “We have no way of knowing whether publishers colluded in adopting the agency model for e-book pricing. We do know that collusion wasn’t necessary: given the chance, any rational publisher would have leapt at Apple’s offer…Amazon was using e-book discounting to destroy bookselling, making it uneconomic for physical bookstores to keep their doors open.”
      “Our government may be on the verge of killing real competition in order to save the appearance of competition.”

  6. Hey, DOJ: I’ve MADE more money owning AAPL than I’ve all total ever spent on eBooks. With the upcoming dividend, I only need to own about 10 shares to get a quarterly eBook for “free”

    So I get it that you’re mad that Apple will be paying a dividend to stockholders and you and your paymasters only get a small tax off of that, but I’d seriously suggest you take a page from 2008 and just buy shares of AAPL to get your payout.

  7. It’s well known that Steve Jobs wanted to use the base price of $9.99 for ebooks (following the $.99 pattern for music), which, coincidentally, is the same price Amazon wants to offer.

    Both Apple and Amazon are consummate customer-oriented companies, and they know what needs to happen for impulse-buying. At $9.99 I know I’d buy a lot more books than, say, $12.99 or $14.99. Keeping prices at ‘impulse’ levels puts these products in the hands of a far larger base of customers; the last thing that should happen is to have monopolistic plutocrats price books out of the hands of the masses, and to make them a luxury elite product. Steve Jobs knew this, just like Bezo, which is why the DOJ suit is a win-win for everyone. Steve Jobs would be very pleased right now, because the DOJ is forcing the publishers to play fair.

    1. The DOJ suit is a win-win for nobody but Amazon. Forcing the publishers back to a wholesale model instead of an agency model goes right back to what Amazon wanted: allowing them to sell e-books at a loss until they regain their monopoly, at which time they are free to jack the prices back up to wherever they want, while they make 70% and the authors make less than half what they would make selling through Apple (which takes 30%).

      Who exactly is winning again?

  8. As I mentioned in the other thread, the problem here is NOT about the agency model, and NOT about any arbitrary setting price at $9.99, or lack of such arbitrary pricing.

    The problem is Apple’s requirement that if a publisher wants to sell books at Apple for a certain price, those books CANNOT be sold cheaper ANYWHERE else.

    As I said, when a retailer such as Best Buy negotiates retail pricing for the product it sells with manufacturers, they DON’T prohibit those manufacturers from selling their products at lower (or higher) prices.

    This may be the sticking point here.

    1. “The problem is Apple’s requirement that if a publisher wants to sell books at Apple for a certain price, those books CANNOT be sold cheaper ANYWHERE else.”

      NOT TRUE! The agreement was if books are sold for less elsewhere Apple has the right to sell them for that price too.


  9. MDN is wrong on their take. Just because someone like Apple is big doesn’t mean that they should abuse that strength to bully governments around. After all, we are the government and even though I think the government is wrong on this issue, Apple should not use the tactics that MDN suggests.

  10. Most states are bankrupt and it’s no wonder they are eying the big cash pile of Apple. Attorney Generals everywhere are getting at the chance of their lives to jump onto the political bandwagon to enhance their future political credentials. Apple is easy meat for any unscrupulous politicians to hog the limelight. It’s no wonder that America is sooooo screw up because of personal agendas of incompetent bureaucrats and politicians. American jobs were lost and the economy went into a tailspin because of the collusion of politicians with Wall Street’s money bags with the blessings of the DoJ, and most glaring of all, they are protected from prosecution for making terrible past mistakes.

  11. LOL @MDN

    WHAT thermonuclear options? You do realize this is the government here, not some competitor right?

    If John Rockefeller couldn’t slap the US government around with a near monopoly on oil distribution in the united states then Apple has a snowballs chance in hell if the Feds get serious and play hardball.

    Seriously the government is the kind of enemy that breaks large and rich companies apart and feeds the pieces to a cesspool of small fry competitors when they set their targets fully.

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