Apple Flags Amazon in Books Probe
08/16/2012| 06:26pm US/Eastern
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Apple Inc. (>> Apple Inc.) has complained that rival Amazon.com Inc. (>> Amazon.com, Inc.) was the "driving force" behind the U.S. Justice Department's investigation of Apple's alleged price fixing of electronic books, helping the "industry monopolist" to further strengthen its grip on the market.
The remarks came as part of antitrust litigation filed by the DOJ in April, alleging that Apple and a handful of book publishers conspired to fix prices for electronic books at a level higher than what Amazon had been offering.
In a filing in U.S. District Court for the Southern District of New York on Wednesday, Apple alleges Amazon hosted a two-day meeting with government representatives at its Seattle headquarters to discuss their investigation.
Ultimately, Apple argues, Amazon made at least 14 employees available to government investigators probing Apple, and was only required to turn over a "fraction" of the documents required by others involved in the case.
An Amazon spokeswoman didn't immediately respond to a request for comment. At the time the DOJ filed its antitrust suit in April, it also announced that three of the publishers had agreed to a proposed settlement--which Amazon termed "a big win" for owners of the company's Kindle e-reader devices.
The legal battle over electronic book sales comes as Apple and Amazon square off on a number of fronts. The technology giants also compete in tablet devices and the sale of online music and video.
However, book sales were Amazon's original business, and it remains far ahead of its rival in that market.
The DOJ's suit filed against Apple and others alleges that as the Cupertino, Calif. firm prepared to introduce its iPad tablet, it negotiated a model with Macmillan, Penguin Group and others that raised prices for electronic books to $12.99 or more for popular titles from the discounted price of $9.99 that Amazon had been offering--forcing Amazon to raise its own prices.
The alleged collusion resulted in consumers overpaying for popular books, the DOJ says.
In its filing Wednesday, Apple said it denies the allegations, adding it has never "sought to benefit from collusion."
In its own filing in the case Wednesday, the Authors Guild argued that the DOJ's proposed settlement with publishers over the alleged price fixing, which would ban them from constraining retailers from offering discounts for two years, could be devastating for traditional book retailers.
"The proposed judgment will drive trade out of traditional bookstores and into the proprietary world of [Amazon's] Kindle," the organization argued. "Of all the possible remedies to the alleged collusion, requiring three large publishers to allow Amazon to sell e-books at a loss is among the most destructive of competition that one could imagine."
Write to John Letzing at john.letzing@dowjones.com
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