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Apple accused over e-book pricing

Computer giant Apple is being sued for e-book price fixing by the American government.

It has filed an antitrust lawsuit in New York against the company and various major book publishers, claiming the publishers conspired with Apple to raise retail electronic-book prices to limit competition.

The lawsuit, filed in federal court in Manhattan, said the effort was a response to the success Amazon had in selling e-books for just under 10 dollars.

The lawsuit said the conspiracy came as Apple was preparing to launch the iPad and called for a guaranteed 30% commission on each e-book it sold.

At the heart of the e-book pricing debate is the industry's continuing concerns about Amazon.

Publishers see the "agency model" as their best, short-term hope against preventing the online retailer from dominating the e-book market and driving down the price of books to a level unsustainable for publishers and booksellers.

Since launching the Kindle in 2007, Amazon has made a point of offering best-sellers for 9.99 dollars (£6.28) in the US. The discount is so deep from list prices of 20 dollars and more that it is widely believed Amazon is selling the e-books at a loss to attract more customers and force competitors to lower their prices.

Amazon also has been demanding higher discounts from publishers, and stopped offering e-books from the Independent Publishers Group, a Chicago-based distributor, after they could not agree to terms.

When Apple launched the iPad two years ago publishers saw two ways to balance Amazon's power: Enough readers would prefer Apple's shiny tablet over the Kindle to cut into Amazon's sales and the agency model would stabilise prices.

Apple's iBookstore has yet to become a major force, but publishers believes the new price model has reduced Amazon's market share from around 90% to around 60%.