U.S. accuses Apple, publishers of e-book price fixing

(Reuters) - The Justice Department took Apple Inc and two major publishers to court for conspiring to push up the prices of e-books, while three other publishers agreed to settle the government's charges.

U.S. Attorney General Eric Holder told a press conference that the proposed settlement would give retailers such as Amazon and Barnes & Noble the freedom to reduce e-book prices.

The lawsuit, filed in the U.S. District Court for the Southern District of New York on Wednesday, said the conspiracy has caused e-book consumers to pay "tens of millions of dollars more for e-books than they otherwise would have paid."

The government alleged that Apple and the publishers had a common interest in fighting Amazon.Com Inc's practice of selling e-books for as little as $9.99, and decided to work together to raise prices by switching to an "agency" model where the publishers set the prices.

"To effectuate their conspiracy, the publisher defendants teamed up with defendant Apple, which shared the same goal of restraining retail price competition in the sale of e-books," the Justice Department complaint said.

Apple has not been part of the settlement negotiations, a person familiar with the matter had told Reuters.

The two publishers the Justice Department is proceeding to litigate against are Pearson Plc's Penguin Group and Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH.

News Corp's HarperCollins Publishers Inc, CBS Corp's Simon & Schuster Inc and Lagardere SCA's Hachette Book Group agreed to settle with the Justice Department. The settlement terms were not immediately disclosed.

Macmillan Chief Executive John Sargent said in a letter made public on Wednesday that settlement terms demanded by the Justice Department "were too onerous." He also said Macmillan did not act illegally and did not collude.