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Report: Apple, Publishers Warned Over E-Book Price Fixing

iStockphoto/Thinkstock(NEW YORK) -- The Justice Department is reportedly threatening to sue Apple and five big name publishers for allegedly fixing the price of electronic books, or e-books.

Citing people familiar with the matter, the Wall Street Journal reports that Apple and the publishers -- Simon & Schuster Inc., Hachette Book Group, Penguin Group, Macmillan and HarperCollins Publishers Inc. -- worked together to change the model under which e-books were priced right around the time when the first iPad was introduced.  This resulted in higher costs to consumers across the board.

Without the change, Amazon could have emerged as the leader in e-books with its bargain prices.

The publishers say that the shift in pricing warrants more competition and allows more electronic booksellers to thrive, according to the Journal, but they have denied teaming up to hike prices.

The Justice Department, publishers and Apple have declined to comment on the allegations.

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ABC News Radio