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Apple faces investigation over iBooks price rigging, says report

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iBooks
Apple could be facing a lawsuit from the US Justice Department over price rigging claims concerning its iBooks service.

The Wall Street Journal says that the iPhone maker and five publishing houses are about to be sued for colluding to raise the price of electronic books.

The publishers facing legal action along with Apple are Simon & Schuster Inc, Hachette Book Group, Penguin, Macmillan and HarperCollins Publishers Inc. Representatives from several of the firm are said to have held meetings to agree an out-of-court settlement.

Apple and its partners could be investigated over claims that they conspired to 'strong arm' distributors into following a set of guidelines for e-book publishing laid down when the original iPad arrived on the market.

The Cupertino-based firm operates on an 'Agency Model', in which publishers set their own prices and Apple takes a 30% cut, on the condition that no other distributor is able to undercut them. This has led to publishers demanding the same business model from other distributors, such as Amazon.

The US Justice Department is allegedly seeking evidence that Apple and the five publishers agreed to the 'Agency Model' with full knowledge of the repercussion it would have on the industry. All parties have denied collusion.

Apple and its publishing partners came under scrutiny by the European Commission's Antitrust watchdog for the same reason late last year. The investigation remains ongoing.

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