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Apple and four other major book publishers are being sued by the US Department of Justice over the pricing of ebooks.The USA accuses Apple and Hachette, HarperCollins, Macmillan, Simon and Schuster and Penguin of colluding over the prices of ebooks they sell.

This lawsuit is over the firms’ move to the agency model where publishers rather than sellers set prices.

Hachette, HarperCollins and Simon and Schuster have already settled.

The case will proceed against Apple, Macmillan and Penguin “for conspiring to end ebook retailers’ freedom to compete on price”, the Justice Department said.

“As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles,” Attorney General Eric Holder said.

“To effectuate their conspiracy, the publisher defendants teamed up with defendant Apple, which shared the same goal of restraining retail price competition in the sale of ebooks,” according to papers filed in New York’s Southern District court.

“Apple facilitated the publisher defendants’ collective effort to end retail price competition by coordinating their transition to an agency model across all retailers.”

In addition, the European Commission has also been probing e-book price fixing.

Apple, Hachette, HarperCollins, Macmillan and Simon and Schuster have now made proposals to settle that probe.

“The European Commission has received proposals of possible commitments from Apple and four international publishers,” said the EU’s competition commissioner Joaquin Almunia.

Electronic books are sold according to a different formula from that governing the sales of physical books.

For most physical books publishers set a wholesale price, often about half the cover price, and then let a retailer decide how much they actually want to charge for the title.

This model was initially adopted for ebooks but has since been changed for what is known as an agency model.

Under this scheme, publishers set the price of a book and the agent selling it gets a 30% cut. The agency model was adopted by publishers largely at the prompting of the late Steve Jobs.

The shift to agency pricing was also seen as a protective measure to head off attempts by Amazon to corner the market in ebooks. It had been aggressively cutting prices to win customers over to its Kindle ebook reader.

Shares of smartphone maker HTC plummeted on the Taiwan Stock Exchange after the company reported a sharp drop in its profits for the first quarter of 2012.Its shares dipped as much as 6.8% to 545 New Taiwan dollars.

The firm said net profit for the first three months of year fell 70% from a year earlier to £95 million (NT$4.46 billion).

The numbers come as the firm faces increasing competition from rivals such as Samsung and Apple.

HTC also reported a 35% drop in revenue for the period. Analysts said the weak results had raised concerns about the impact of increasing competition on the firm’s future growth.

HTC, which used to be a contract electronics manufacturer, started making phones under its own brand just five years ago.

The firm made rapid progress and was one of the early market leaders in the Android sector. It gained valuable share in key markets such as the US, and at one time was the world’s third-largest mobile phone maker.

However, the company failed to hold on to its dominant position and has been losing ground to other Android phone makers, as well as Apple’s iPhone.

The firm is launching a new series of phones, dubbed HTC One, in a bid to regain its market share.

Analysts said that even though the company had suffered a setback, it had a good chance to bounce back.

Art galleries and curators are increasingly using the internet to sell art at affordable prices.Some websites are even letting people rent out works of art for less than the price of a monthly mobile phone bill.

Young artists are hoping that this will help them reach an entirely new audience.

They also rent out original works of art to people to try out on their living room wall before they commit to buying it.

The pictures are delivered with a curator’s description of the piece and a pair of white gloves to minimise damage.

The social networking part of the site encourages potential customers to join the online community and talk to the artists about their work.

This gives the artists a chance to promote their work to a new generation of collectors.

Some galleries are now just using their studio space as a marketing tool to promote their e-business.

DegreeArt is both a physical shop in Bethnal Green and a website, which allows art lovers to buy the works of art students, and those who have recently graduated.

It is co-directed by friends Isobel Beauchamp and Elinor Olisa.

The women realised there was a gap in the market for a company that could promote and sell graduate art work.

Both of them advise students on how to brand themselves post-university and surrounded by a colourful exhibition of pictures of rats and amphibians Ms Beauchamp stresses the importance of online promotion. If you don’t have Facebook, Twitter, Tumblr or Flickr then you’re missing a massive trick.

Ms Beauchamp says that artists now have to be business savvy and appeal to buyers with less disposable income.

Samsung Electronics has said it’s profit for the first three months of the year to almost double as its smartphone sales continue to grow.The company said it expects an operating profit £3.2 billion (5.8tn won) for the period.

The success of Samsung’s Galaxy range has seen it become the world’s biggest selling smartphone maker.

Analysts said the firm had benefited from keeping its margins healthy, despite growing competition.

With memory chip prices rising, chips will play a big part in second quarter profits. Expectations for operating profit will reach somewhere between 6.5tn to 7.5tn won.

While Samsung’s phone unit has prospered, other divisions, including memory chip manufacturing, have been going through a tough time.

Prices for memory chips have been falling globally, not least due to oversupply.

Analysts said that natural disasters last year in Japan and Thailand had resulted in a fall in production of various electronics products, which use these chips, resulting in high inventory levels putting pressure on prices.

At the same time, slowing demand from key markets such as the US and Europe hurt chipmakers.

However, analysts said that as the global economy recovers and supply chains in the region get back on track, chip prices were likely to recover, boosting Samsung’s profits further.

While the company is expected to grow further, analysts warned that Samsung will have to overcome potential hurdles on the way.

To begin with, it will have to fend off competition from its biggest rival Apple, they said.

The fear is that increased competition may force Samsung to lower its prices in a bid to attract customers, a move which, if implemented, would impact on its profit.

At the same time, Samsung is also involved in a legal battle with Apple over patents involving technology it uses in its smartphones and tablet PCs.

A big rise in online betting via mobile phones has helped Paddy Power to increase it’s profits with a 16% rise annual rise.The bookmaker, which makes most of its profits in the UK, said pre-tax profits for the year to 31 December 2011 rose to £100.9 million (121.2m euros).

Paddy Power expanded its High Street network, opening 41 outlets in the UK last year to bring its total to 165.

Online revenue increased by 26%, driven by a 225% rise in turnover from betting on mobile phones to £304.7 million.

The company said that 49% of its online sports betting customers used their mobile phone to place bets.

Online betting accounts for 79% of Paddy Power’s profits and the company said it had increased the number of UK online customers by 50% to 710,043.

“Our class leading mobile product, married to the strength of our brand and strong value offering has driven acquisition and retention, leading to 1.1 million active customers online,” said chief executive Patrick Kennedy.

Although the company now has 165 shops in the UK it plans to open another 35 to 40 each year.

Microsoft’s profits in the three months to the end of March dropped slightly but the results still beat analysts’ expectations after a surprise rise in sales of its Windows operating system.The world’s largest software firm made a net profit of £3.2 billion ($5.11 billion), compared with £3.3 billion a year earlier.

Sales rose by 6% to £10.875 billion.

Windows sales rose 4% against forecasts of a 4% decline, though sales at its entertainment division, which includes the Xbox console, fell 16%.

Its business division saw revenues increase 9% “reflecting the continued strength of Office 2010″, the company said.

Microsoft shares rose 3% in after-hours trading in New York.

The company also noted that the results for the same quarter a year ago had been boosted by a £288 million tax benefit.

Windows is facing competition from the growth of tablet computers such as Apple’s iPad and mobile devices using Google’s Android system.

However, Microsoft is hitting back with the release of Windows 8, an operating system for PCs and mobile devices.

Earlier this week Microsoft said this next operating system would come in three different types.

For those with Intel-compatible machines, the OS will be available in two versions – Windows 8 and Windows 8 Pro.

And for those with devices, largely tablets, powered by ARM-designed chips, there will be a Windows RT version.

CD sales have seen a significant year-on-year drop in the first three months of 2012, according to figures from the BPI and the Official Charts Company.Sales fell 25% from 20.5 million in the first three months of 2011, to 15.3 million this year.

Digital sales continue to rise with almost a third of all albums now being bought digitally.

The organisation represents stores like HMV and online sites such as Amazon.

One idea being suggested is a system whereby the music transfers automatically to your MP3 player, tablet or computer as soon as the CD is scanned at the till.

The latest figures come from the BPI, which represents the music industry, and the Official Charts Company.

They show that digital now accounts for 33.1% of all UK albums sales, up from 23.6% in the first three months of 2011.

Singles are doing well too with 46.7 million being sold this year so far, an increase of 4.4% on last year.

Adele’s album remains the year’s best selling album this year with sales of 21 now exceeding four million in the UK.

Sales of computer games in the UK have surpassed those of videos for the first time according to new research.The Entertainment Retailers Association (ERA) said sales of £1.93 billion in 2011 made the gaming industry the country’s biggest entertainment sector.

By contrast, sales of DVDs and other video formats totalled £1.80 billion, while music sales came only third with only £1.07 billion in UK sales.

However, in the first 11 weeks of this year, the ERA said video sales were worth more than two times those of games.

By comparison over the whole of last year games accounted for 40.2% of the entertainment market, video for 37.6% and music for 22.2%.

Total sales in 2011 for games, video and music fell year-on-year by 3.3% to £4.80bn.

“This is a dramatic time for the entertainment market,” said Kim Bayley, director general of the ERA.

“It is an historic development for the games sector to have overtaken video last year. Video has long been the biggest entertainment sector. Sales so far this year, however, suggest video is not going down without a fight.”

“The UK is the most competitive retail games market in Europe – as such I don’t believe gaps in the market will be left unplugged for any length of time.”

However it not all profits for gaming companies. The Game Group has today gone into administration.

The business has been hit by competition from online only retailers.

Game Group employs 385 staff at its headquarters in Basingstoke in Hampshire, and about 5,100 in its stores in the UK and Ireland.

The rapid rise in shopping online – and the use of electronic media – has prompted a major review of contract law in Scotland.The Scottish Law Commission said the law must be updated to take account of modern technology and ensure consumers and businesses are fully protected.

The current law is based on traditional oral and paper contracts.

But the commission has asked how they can be formed online, and whether electronic signatures are valid.

It has launched a discussion paper to discover if the law should be updated.

Few people realise they are entering into contracts every day, whether they are buying a bus ticket or a loaf of bread.

But this review has been prompted by the rapid growth of electronic contracts, for example downloading a ringtone or music or purchasing books or clothes from an online retailer.

The commission said that in most cases they work perfectly but said it was unclear whether electronic transactions carried the same weight of legal protection as written contracts for a house purchase or agreement to build a new hospital.

Because of the rapid rise in the use and importance of electronic media, it said answers were needed urgently to questions such as how a contract was formed in the electronic age and what role electronic signatures play.

It has asked: “Do the rules which were designed for oral and paper contracts still work for e-contracts?”

The lead commissioner, Prof Hector MacQueen, said: “With the rise in new technology it is high time that our law on how contracts are formed is reviewed and updated.

“Our proposals would lead to a clear and modern law in line with developments in technology and its usage.

“We think that the innovations would be particularly attractive for commercial parties, for whom the proposals offer world-class levels of certainty and convenience.”

Responses to the discussion document should be received by 29 June.

After 244 years the reference book firm Encyclopaedia Britannica has decided to stop publishing its famous and weighty 32 volume print edition.It will now focus on digital expansion amid rising competition from websites such as Wikipedia.

The firm, which used to sell its encyclopaedias door-to-door, now generates almost 85% its revenue from online sales.

It recently launched a digital version of its encyclopaedias for tablet PCs.

“The sales of printed encyclopaedias have been negligible for several years,” said Jorge Cauz president of Encyclopaedia Britannica.

Companies across the globe have been trying to boost their online presence in a bid to cash in on the fast-growing market.

Various newspapers, magazines and even book publishers have been coming up with online versions of their products as an increasing number of readers access information on high-tech gadgets such as tablet PCs and smartphones.

Britannica said while its decision to focus on online editions was influenced by the shift in consumer pattern, the ability to update content at a short notice also played a big role.

“A printed encyclopaedia is obsolete the minute that you print it,” Mr Cauz said.  “Whereas our online edition is updated continuously.”

At the same time, frequent users of the encyclopaedia said they preferred using the online version more than the print one.

Encyclopaedia Britannica, the company, has largely moved away from its encyclopedia work focusing most of its energies in recent years on educational software.