Apple sued over ebook pricing The Department of Justice sued Apple and five of the largest book publishers on Wednesday, alleging that they colluded to increase the price of ebooks and saying that a change to the industry's model at the time Apple launched its iPad tablet has cost consumers "tens of millions of dollars." The complaint, filed in the Southern District of New York, alleges that Apple and publishing executives used phone calls, emails and meals in "private dining rooms of upscale Manhattan restaurants" to agree on a common response to Amazon's $9.99 maximum ebook prices. Amazon is not named as a defendant. The introduction of an "agency" business model in which publishers set retail prices raised the price of best-selling titles by $3 to $5 each. Apple's insistence on a "most favoured nation" clause in which publishers agreed not to sell on cheaper terms elsewhere, while giving Apple a 30 per cent commission on every sale, forced other retailers to adopt the same terms, the DoJ said. The publishers named in the suit are Hachette Book Group, part of Lagardère; HarperCollins, owned by News Corp; Holtzbrinck, owner of Macmillan; Simon & Schuster, a CBS subsidiary; and Penguin, owned by Pearson, the parent company of the Financial Times. "Executives at the highest levels of the companies included in today's lawsuits, concerned that ebook sellers had reduced prices, worked together to eliminate competition among stores selling ebooks, ultimately increasing prices for consumers," said Eric Holder, US attorney-general, announcing the suit in Washington. Three of the five publishers, Hachette, HarperCollins and Simon & Schuster, immediately settled with the justice department. The settlement leaves Apple, Macmillan and Penguin to fight the case in court. A separate suit brought by US states made similar claims against Apple, Macmillan, Simon & Schuster and Penguin. The states settled with Hachette and HarperCollins, who will together pay up to $52m in damages. Joaquín Almunia, the European Commission vice-president for competition policy, said it had received proposals of possible commitments from Apple, Simon & Schuster, HarperCollins, Hachette and Holtzbrinck in connection with its parallel ebooks investigation. Not all publishers were immediately available for comment, but they have previously denied conspiring to increase prices and defended the "agency" model as having promoted competition by challenging the dominance of Amazon in the fast-growing ebook market. The US suit claims that Steve Jobs, the late chief executive of Apple, personally facilitated the move to the agency model. "Apple clearly understood that its participation in this scheme would result in higher prices to consumers," the suit says, citing quotes from Jobs as saying "the customer pays a little more, but that's what you [publishers] want anyway." Apple did not reply to requests for comment. From September 2008 through 2009, the chief executives of the publishers allegedly met once per quarter to discuss "confidential business and competitive matters, including Amazon's ebook retailing practices," the DoJ said. It highlighted dinners between executives including John Makinson, chief executive of Penguin, and John Sargent, chief executive of Macmillan at "the chef's wine cellar," a private room at Picholine, a New York restaurant. The settlement, which must be court approved, would require the three publishers to let retailers including Amazon and Barnes & Noble set their own prices for ebooks. It would also require them to end their "most favoured nation" relationships with Apple and refrain from sharing competitively sensitive information with each other for five years. HarperCollins announced its settlement without admitting guilt, calling it "a business decision to settle the DoJ investigation in order to end a potentially protracted legal battle." Additional reporting by Shahien Nasiripour in Washington and Chris Nuttall in San Francisco