Hagens Berman Files Class-Action Lawsuit Against Apple and Publishers

(Press Release) SAN FRANCISCO, August 9, 2011—Hagens Berman, a consumer rights class-action law firm, today announced it has filed a nationwide class-action lawsuit claiming that Apple Inc. and five of the nation's top publishers, including HarperCollins Publishers, a subsidiary of News Corporation, Hachette Book Group, Macmillan Publishers, Penguin Group Inc., a subsidiary of Pearson PLC, and Simon & Schuster Inc., a subsidiary of CBS, illegally fix prices of electronic books, also known as e-books.

Filed in the U.S. District Court for the Northern District of California, the lawsuit alleges that the publishers and Apple colluded to increase prices for popular e-book titles to boost profits and force e-book rival Amazon to abandon its pro-consumer discount pricing.

According to the suit, publishers believed that Amazon's wildly popular Kindle e-reader device and the company's discounted pricing for e-books would increase the adoption of e-books, and feared Amazon's discounted pricing structure would permanently set consumer expectations for lower prices, even for other e-reader devices.

"Fortunately for the publishers, they had a co-conspirator as terrified as they were over Amazon's popularity and pricing structure, and that was Apple," said Steve Berman, attorney representing consumers and founding partner of Hagen Berman. "We intend to prove that Apple needed a way to neutralize Amazon's Kindle before its popularity could challenge the upcoming introduction of the iPad, a device Apple intended to compete as an e-reader."

The complaint claims that the five publishing houses forced Amazon to abandon its discount pricing and adhere to a new agency model, in which publishers set prices and extinguished competition so that retailers such as Amazon could no longer offer lower prices for e-books.

If Amazon attempted to sell e-books below the publisher-set levels, the publishers would simply deny Amazon access to the title, the complaint details. The defendant publishers control 85 percent of the most popular fiction and non-fiction titles.