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Justice Department threatens Apple, publishers with lawsuits over alleged e-book price increases

Apple iPad 2 with Facetime

 (Apple)

The Justice Department has warned Apple Inc. and five of the biggest US publishers that it plans to sue them for allegedly colluding to raise the price of electronic books, according to people familiar with the matter.

Several of the parties have held talks to settle the antitrust case and head off a potentially damaging court battle, these people said. If successful, such a settlement could have wide-ranging repercussions for the industry, potentially leading to cheaper e-books for consumers. However, not every publisher is in settlement discussions.

The five publishers facing a potential suit are CBS Corp.'s Simon & Schuster Inc.; Lagardere SCA's Hachette Book Group; Pearson PLC's Penguin Group; Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH; and HarperCollins Publishers Inc., a unit of News Corp., which also owns The Wall Street Journal and NewsCore.

Spokespeople for the five publishers and the Justice Department declined to comment. Apple, which introduced a new version of its iPad tablet Wednesday, declined to comment.

Click here for more on this story from The Wall Street Journal.