Did Apple conspire with publishers to keep e-book prices high?

Did Apple conspire with publishers to keep e-book prices high? -

While everyone is consumed with deciphering how Google’s bid to acquire Motorola will affect Apple’s (a aapl) dominance in the smartphone market, Apple has other fights on its hands elsewhere. Among them is a class-action lawsuit filed recently that alleges the company conspired with major book publishers to keep e-book prices high, by implementing the so-called “agency model,” which allowed publishers to set the price instead of Apple. But was this an actual conspiracy, or was it just a way for Apple and the publishers to compete with Amazon’s dominance over the growing market for electronic books?

The seeds for this particular battle were sown early in 2010, after Apple launched the iPad with its built-in iBooks library application. At the time, Amazon was fighting with a number of publishers — including Macmillan — over what prices it could charge for e-book versions of their titles. The online-retailing giant, which dominated the electronic book market thanks to its Kindle reader, wanted to keep prices no higher than $9.99, but Macmillan and other publishers wanted to maintain a pricing structure that was tied to their traditional print business, with prices starting at around $14.99, then declining over time as new versions of the book were released.

At one point, Amazon actually yanked all the electronic versions of Macmillan’s titles from its online store as a way of punishing the publisher, which took out a full-page ad accusing Amazon of unfair behavior. Eventually, Amazon relented and restored the publisher’s books, but the atmosphere in the industry remained tense.

(Via TheAppleBlog.)