Apple accused of 'conspiring with publishers to hike price of e-books'

Apple has been accused of conspiring with major publishers to increase the price of e-books in a scheme that cost consumers hundreds of millions of dollars, a New York court has been told.

Lawrence Buterman, a lawyer for the US Department of Justice, told District Judge Denise Cote that Apple and five of the six largest American book publishers had "consciously committed to a scheme to raise e-book prices throughout the industry", reports The Independent.

Buterman claimed that the price hike, which came as Apple prepared to launch the iPad and take on Amazon, was encouraged by the late Steve Jobs.

Amazon set low prices on its e-books, charging just 9.99 dollars apiece and selling them at a loss as it sought to shift its Kindle devices, the court was told.

The US government claimed in court papers that Apple wanted to sell e-books to the public, but did not want to compete against the low prices Amazon was setting. Apple knew that the major publishers also disliked Amazon's low prices and saw Apple's potential entry as a pathway to higher retail prices industry-wide.

It also citied a passage from an authorised biography of Jobs by Walter Isaacson, which it said proved that Apple had sought to inflate prices.

The five publishers who were accused by the government of participating in the alleged conspiracy - MacMillan, Simons and Schuster, Hachette, HarperCollins and Penguin - have already settled, paying out a total of 164 million dollars.

Apple, however, has claimed it had done nothing wrong, and hence is taking a very principled position. The company's current CEO, Tim Cook, said last week that the case was "bizarre".

Apple's lawyer, Orin Snyder, said Apple did not conspire with any publisher individually, collectively or otherwise to raise industry prices.