Justice Department turns antitrust eyes toward pricing of ebooks

Investigators investigating whether Apple, ebook publishers colluded to fix prices

Publicly confirming media reports for the first time, the U.S. Department of Justice on Wednesday said it was investigating whether publishers and retailers (well, one retailer) colluded to fix the prices of ebooks.

Justice Department acting antitrust chief Sharis Pozen told a hearing of the House Judiciary Subcommittee on Intellectual Property, Competition and the Internet that the DoJ is "investigating the electronic book industry, along with the European Commission and the states attorneys general."

Pozen appeared at the hearing to elaborate on the agency's recent efforts to enforce antitrust laws, including its lawsuit to block AT&T's $39 billion purchase of T-Mobile USA and its settlement with Google that allowed the search giant to purchase ITA Software. (If you have two hours to kill, here's Pozen's statement to the House panel.)

Pozen's comments at the hearing come a day after European Union antitrust investigators said they were looking into how Apple and five major publishers determined pricing for ebooks.

According to the Wall Street Journal:

The issue that [DoJ] antitrust enforcers are examining is the agency pricing model, which Apple employed when it introduced its iPad tablet in April 2010. The model allowed publishers to set the prices of their books sold through Apple's iBookstore, avoiding the kind of discounting employed by Amazon.com Inc.'s rival service.

While Pozen on Wednesday mentioned no specific targets of the antitrust probe (including Apple), the five publishers under investigation by the EU are Hachette Livre, Harper Collins, Simon & Schuster, Penguin and Verlagsgruppe Georg von Holzbrinck.

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