NEW YORK—The U.S. filed an antitrust lawsuit Wednesday against Apple Inc. AAPL +0.65% and five of the nation's largest publishers, alleging they conspired to limit competition for the pricing of e-books.

The lawsuit, filed in Manhattan federal court by the U.S. Department of Justice's Antitrust Division, alleges Apple and the publishers reached an agreement where retail price competition would cease, retail e-books prices would increase significantly and Apple would be guarantee a 30% "commission" on each e-book sold.

A settlement involving some of the publishers is expected to be filed Wednesday, according to a person familiar with the matter. U.S. Attorney General Eric Holder is expected to discuss "a significant antitrust matter" at a press conference later Wednesday.

"Defendants' ongoing conspiracy and agreement have caused e-book consumers to pay tens of millions of dollars more for e-books than they otherwise would have paid," the lawsuit said.

Will Apple's game plan beat the trustbusters? ...

The relationship of competition

Fair competition is at the very heart of the Justice Department's case against Apple and the publishers. The government accused the publishers of illegally holding private meetings to fix e-book prices, and later teaming up with Apple to crack Amazon's dominance of the market. Bundling all the companies together in one complaint has its own problems, though. Indeed, Hurwitz noted that Apple is not a competitor with e-book providers.

"If e-book publishers decided to collude and break the law, that's not Apple's problem. They were free to break the law and come to Apple as a cartel," he said. "That's not illegal on Apple's part."

The relationship between Apple and the publishers is crucial as far as antitrust laws are concerned, says Joseph Bauer, professor of law at the University of Notre Dame. Bauer noted that under the very first section of the Sherman Anti-Trust Act -- which Apple and others are alleged to be violating -- there is a marked distinction between business relationships, which are broken into two categories: vertical and horizontal. Where horizontal covers the behavior between or among competitors, vertical is that behavior between suppliers and customers.

"Historically, the antitrust law has been much harsher in dealing with horizontal behavior," Bauer said in a phone interview Friday. "At its core, the allegations by the DOJ are against the five publishers who allegedly conspired to adopt uniform pricing policies. That might be different, and only slightly less problematic from actually having agreed on price."

How Apple's battle over e-books helps consumers

(MoneyWatch) COMMENTARY The battle lines over e-book pricing are dug deep, and the verbal attacks are flying. The Department of Justice last week sued Apple (AAPL) and five major publishers for alleged price-fixing. Apple, in turn, says it and the publishers were trying to break Amazon's (AMZN) "monopolistic grip on the publishing industry."

Some claim that the ultimate result will be to let Amazon dictate e-book prices for everyone. Others say that the government's move may be good for readers, because prices will drop. But looking at this through a consumer's eyes misses what it really going on: a battle for control that pits an old business model against an emerging one. And this is one case where the business establishment may lose, no matter what happens. ...

Consumers say heads we win, tails you lose

Does Amazon want to control the industry? Absolutely. But it also provides an approach to self-publishing that a growing number of authors are embracing. They don't see that there's anything left to lose in the conventional publishing model, no matter who sells the titles. Instead, a growing number have decided to sell their own books through Amazon and Barnes & Noble (BKS).

Ironically, consumers are likely to win no matter what happens with the case because the self-publishing gate is open and the horses are out of the barn. If the government wins, Amazon discounts like crazy, twisting the arms of publishers and other retailers like Apple. Prices drop, publishers become even less effective in selling books, and writers increasingly go off on their own. And most writers can sell e-books for much less and still make more money per copy than they ever could with a publisher.

If Apple and the publishers that haven't inked a deal with the DOJ prevail, consumers still win. Publishers push their prices up for the near future and continue to absorb as much profit as they can. People tire of the prices of e-books and start buying more independently produced titles. Bigger names in writing notice the hoi polloi making significant money, so they go independent as well, reducing prices to levels that bring in the sales they want -- and consumers still win.

US class-action ebook price-fixing suit can proceed

NEW YORK: A judge on Tuesday allowed a class-action case to proceed against Apple and six publishing houses alleging a price-fixing scheme for electronic books, citing "ample" indications of a conspiracy.

The suit, file last August, is separate from a US government complaint last month which makes similar allegations, that Apple colluded with publishers to boost the price of ebooks and wrest control from Amazon.

The evidence presented of an agreement between Apple and the publishers "is unlawful per se because it is, at root, a horizontal price restraint," Judge Denise Cote of US District Court in New York said in an opinion, which allows the case to move forward. ...

"There are ample allegations that Apple became an integral member of this conspiracy and well understood that the upshot of its participation would be the elimination of price competition at the retail level, forcing consumers to... 'pay a little more' for ebooks," the judge wrote. ...

New documents filed in the government case suggest Jobs played a key role in the conspiracy and told one publisher in an email, "Hold back your books from Amazon" and "Throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99."

In denying the request, Judge Denise Cote of the United States District Court in Manhattan wrote that the lawsuit “plausibly alleges that these motives converged to cause the publishing defendants and Apple to join a single conspiracy to eliminate price competition at the retail level and raise the prices consumers would pay for e-books.”

Hagens Berman Sobol Shapiro, a Seattle-based law firm, filed the lawsuit in August, seeking compensation for a class of people, namely consumers who have purchased e-books.

Book publishers first came under scrutiny by the Department of Justice and others in 2010, when five of the six biggest publishers moved from a wholesale pricing model to an agency model, effectively setting their own prices for e-books. The new system disrupted Amazon’s practice of charging $9.99 for most newly released and best-selling e-books.

Steve Berman, a lawyer for Hagens Berman, applauded the judge’s decision in a statement. “We thought that Judge Cote’s ruling was spot on, especially when she noted that we’ve gone above and beyond in illustrating the legitimacy of our case,” Mr. Berman said. “We are eager to push forward with the case.”

And at the end of this suit, American consumers will be worse off because American courts side with American consumers on important cases almost never and as long as kkkorporations purchase court rulings American consumers will continue to lose.

Macmillan, sole e-book publishing holdout, settles with Justice

Back in December, Penguin became the penultimate publisher to settle with the United States Department of Justice (DOJ) in the alleged e-book price-fixing scheme. On Friday, Macmillan and the DOJ came to a settlement agreement, leaving only Apple in the government’s sights.

Macmillan has agreed to other sales restrictions, including a prohibition until December 2014 on entering into new discounting agreements for e-book titles. As others who have agreed to similar settlements, Macmillan must regularly report to the DOJ on future e-book ventures and any communications it has with its rivals.

“As a result of today’s settlement, Macmillan has agreed to immediately allow retailers to lower the prices consumers pay for Macmillan’s e-books,” said Jamillia Ferris, chief of staff and counsel at the Department of Justice’s Antitrust Division, in a statement. “Just as consumers are already paying lower prices for the e-book versions of many of Hachette’s, HarperCollins’ and Simon & Schuster’s new releases and bestsellers, we expect the prices of many of Macmillan’s e-books will also decline.”

The DOJ still has an ongoing case against Apple—a trial date has been set for June 2013.