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This article was published on April 13, 2012

Apple to DOJ: Amazon had a monopoly on ebooks and the iBookstore broke it

Apple to DOJ: Amazon had a monopoly on ebooks and the iBookstore broke it
Brad McCarty
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Brad McCarty

A music and tech junkie who calls Nashville home, Brad is the Director TNW Academy. You can follow him on Twitter @BradMcCarty. A music and tech junkie who calls Nashville home, Brad is the Director TNW Academy. You can follow him on Twitter @BradMcCarty.

Only a few days after the US Department of Justice filed suit against Apple as well as many other publishers over the pricing of ebooks, Apple has finally decided to break its silence on the matter.

According to All Things Digital, Apple spokesperson Tom Neumayr had the following to say:

“The DOJ’s accusation of collusion against Apple is simply not true. The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry. Since then customers have benefited from eBooks that are more interactive and engaging. Just as we’ve allowed developers to set prices on the App Store, publishers set prices on the iBookstore.”

The suit, which came after 2 years of investigation against the publishers, alleges price fixing in the ebooks market, as well as collusion between the publishing houses. Apple took on what it calls an “agency model” wherein the publisher (in this case Apple) would set the pricing rather than the retailer.

What’s probably most interesting here is Apple’s argument that it is using the App Store pricing scheme with ebooks. It would be hard to argue that developers and advertisers alike have profited greatly in Apple’s walled garden of the App Store, so it’s just as easy to argue that it’s the ideal model to take for iBooks as well.

In what seems to be a response to the controversy, Amazon today slashed prices on a number of its ebooks, in some cases by as much as $5. As the New York Times points out, the move is a strong one, which could end up setting the pricing precedent for ebooks across the market.