Saturday, April 21, 2012

Apple and publishers served with multiple Canadian class action lawsuits over e-book price fixing

Although Apple wants a trial in the e-book price fixing lawsuit levied against it by the Justice Department, meaning it feels confident it will win, the legal issues continue to spill into different countries. Not only is Australia investigating possible price-fixing, there are now three class action lawsuits in Canada over the same issue.

The DOJ lawsuit says that Apple and five publishers, three of which have already settled with the DOJ (Hachette, HarperCollins, and Simon & Schuster) engaged in collusion to force a move to the agency model for e-book sales. Prior to this, was the dominant force in e-books, and had enforced a wholesale pricing model.

In addition, the agreement between Apple and the five publishers gave Apple "most favored nation status," meaning that no one would be able to sell e-books at a price lower than Apple's.

The other two publishers who, like Apple, have not agreed to a settlement with the DOJ are Macmillan and Penguin.

Lawyer Normand Painchaud says his class-action suit filed in Quebec Superior Court is just one of three in Canada; two others were filed in Ontario and British Columbia. The suit, filed under the name Antoine Pontbriand, says:

"The anti-competitive nature of this conspiracy, and the Publisher Respondents’ motivation to control ebook pricing, is also revealed by the fact that the price of an ebook in many cases now approaches – or even exceeds – the price of the same book in paper even though there are almost no incremental costs to produce each additional ebook unit."

Painchaud said that if any of the three lawsuits is successful, any Canadians who bought e-books since April 1, 2010 would be eligible for damages. And since prices went from's fairly standard $9.99 to $12, $14, or even more, the sums could add up.

However, class action lawsuits take a long time. “It could take two, three or four years easily,” said Painchaud.

Of course, if the DOJ wins its case, which won't take nearly as long, it would accelerate a move toward settlement in the Canadian class action suits.

In addition to the Canadian class action lawsuits, Australia is also examining the same price-fixing charges.  Indeed, the issue seems to be increasing in scope, despite Apple's bravado.

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