The Department of Justice is going after Apple and five publishing companies, suing them for colluding to raise e-book prices. Amazon, the current leader in e-book sales thanks to the Kindle and the company's early domination of the market, takes a loss on their $9.99 books in order to pull in customers. Apple took a different route with its e-book store, allowing publishers to set the price and then taking a commission, also known as agency pricing. These publishers became unwilling to offer Amazon wholesale priced e-books, and prices rose from $9.99 to $12.99 and $14.99. Three publishers have already settled with the Justice Department, and have allowed Amazon and other retailers to return to what they call the "wretched $9.99 price point." A group of 16 states filed its own suit against publishers, and came to a settlement of $51 million with two publishers is set to provide restitution to consumers who bought the higher-priced e-books.
Apple and the two other publishers are set to face the DOJ in court; one of the CEOs said that taking a settlement would help Amazon "recover the monopoly position it had been building" and "have a very negative and long-term impact on those who sell books for a living."
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Chart of the Day
President Obama and Vice-President Joe Biden are on the trail this week pushing the Buffett Rule, which would raise tax rates on the 1 percent. As this chart shows, current tax rates leave Americans with the highest incomes paying fewer taxes than lower brackets—mostly due to the fact that such high incomes usually come from investments instead of wages.
Reason to Get Out of Bed in the Morning
OMGPOP CEO Dan Porter hired back all his laid-off workers before the company, which makes the popular game Draw Something, was bought by Zynga for $210 million