Justice Department Investigating e-Book Pricing

This week both the Justice Department and the European Commission announced investigations into e-book pricing tactics by publishers. At the same time, scores of lawyers are preparing class action lawsuits against both Apple and book publishers who sell e-books.

Congress heard the argument from the head of the Justice Department's antitrust division on Wednesday, where he confirmed that they are now officially investigating the electronic book industry for what they call "agency pricing" where the publishers set the price for e-books on the iPad and in return Apple collects a commission.

This all started when Amazon started selling best sellers for less than $10.00 per e-book most of the time selling at a loss to generate traffic to their site. Because of this, publishers and Apple decided to counter Amazon by keeping the prices high for e-books on iPad.

The class action suits so far say that "agency pricing" is illegal and anti-competitive, because it forces the price for e-books to stay high.

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