US court rules Apple conspired with five publishers to fix e-book prices
Judge Denise Cote said the company "played a central role in facilitating and executing [...] conspiracy"
Thursday 11 July 2013
Apple colluded with five publishers to fix the price at which electronic books were sold over the internet, a US court ruled yesterday.
District Judge Denise Cote said there was "compelling evidence" that the technology giant played a "central role" in a conspiracy with the publishers to eliminate retail price competition and raise e-book prices.
The company is alleged to have started fixing prices in late 2009 and into 2010 – around the time in which it launched the iPad.
"Apple chose to join forces with the publisher defendants to raise e-book prices and equipped them with the means to do so," the judge wrote in a 159-page decision. "Without Apple's orchestration of this conspiracy, it would not have succeeded as it did."
The case was brought to the New York court by the US Department of Justice and 33 US states. The plaintiffs claimed the conspiracy was designed to undercut the online retailer Amazon's dominance of the e-book market.
The five publishers who were accused by the government of participating in the conspiracy – Macmillan, Simon & Schuster, Hachette, HarperCollins and Penguin – have already settled, paying out a total of $164m (£110m).
Earlier in the trial, Lawrence Buterman, a lawyer for the US Department of Justice, claimed that the price hike was encouraged by Apple's late co-founder, chairman and chief executive Steve Jobs.
The plaintiffs citied a passage from an authorised biography of Mr Jobs by Walter Isaacson, which it said proved that Apple had sought to inflate prices.
"We told the publishers, 'We'll go to the agency model, where you set the price, and we get our 30 per cent, and yes, the customer pays a little more, but that's what you want anyway," the book quotes Mr Jobs as saying.
Apple's court defeat could cost the iPad and iPhone maker heavily, experts said yesterday.
"Apple did not conspire to fix e-book pricing and we will continue to fight against these false accusations," a spokesman for the company said in response to the court decision.
"We've done nothing wrong and we will appeal the judge's decision," he added.
Shares in the company were unmoved at $422 in afternoon trade despite news of the court ruling.
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