The Justice Department has put Apple and five major publishers on notice that it will sue them for allegedly fixing the price of ebooks, the Wall Street Journal reports.
Penguin, Hachette Book Group, Macmillan, HarperCollins and Simon & Schuster all follow the agency pricing model.
According to Publishers Weekly, the agency model developed because the major publishers were worried Amazon’s $9.99 price for ebooks would erode the market for print books.
So they allegedly colluded with Apple to come up with the agency model to stabilize prices.
The Journal reports the feds believe Apple and the major publishers acted jointly to raise ebook prices and plan to sue them for violating federal antitrust laws.
Publishers Weekly reports a representative at one of the Big Six publishers pointed out the ebook industry has grown rapidly since the agency model was put into place because it allowed more e-tailers to enter the market.