Apple: We didn't stifle e-book rivals

Apple has responded to an antitrust lawsuit from the U.S. Department of Justice, saying it fostered, not quelled, competition in the electronic publishing industry. "The DOJ's accusation of collusion against Apple is simply not true," said Apple spokesman Tom Neumayr in a statement to CNN on Thursday. "The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry." The DOJ sued Apple and several publishers Wednesday, accusing them of scheming to fix e-book prices, an accusation that Apple denies. "Just as we've allowed developers to set prices on the App Store, publishers set prices on the iBookstore," said Neumayr. The suit refers to the 2010 release of the iPad, when Apple (APPL) made an agreement with five publishers to release books on its iBookstore. According to the DOJ, Apple conspired to raise e-book prices with CBS' (CBS, Fortune 500) Simon & Schuster, News Corp.'s (NWS) HarperCollins, Hachette Book Group, Pearson's (PSO) Penguin unit and Macmillan. The alleged conspiracy placed many books at so-called "agency pricing," putting them on the market for about $12.99 and giving Apple a cut of 30%. About three days later, Amazon allowed publishers to set their own prices, resulting in higher prices on the Kindle as well."This action drove up e-book prices virtually overnight," said Sharis Pozen, head of the DOJ's antitrust division, at a news conference. "Let me be clear: When companies enter agreements that prevent price competition, that is illegal."The Justice Department settled with three of the publishers -- HarperCollins, Simon & Schuster and Hachette -- forcing them to grant retailers such as Amazon and Barnes & Noble (BKS, Fortune 500) the freedom to cut prices.