
When the Justice Department sued Apple and five of the nation’s largest publishers for anti-competitive behavior, it seemed a bit counterintuitive. Isn’t Amazon the real monopoly in the e-book business? Amazon may dominate the market, but it was those publishers that illegally colluded with one another and Apple to force a so-called agency model on e-booksellers, according to the Justice Department. In this model, the publishers set the retail price and the sellers took a commission. This enabled the publishers to raise the price of e-books and turn customers away from Amazon’s practice of pricing many books at $9.99, a model that the publishers thought was unsustainable. Of course, colluding to raise prices — even if it’s to combat the market power of a dominant competitor — is a big no-no, according to the Justice Department. Three of the publishers have settled with Justice, but Macmillan and Penguin will fight it out in court in 2013.