Apple Found Guilty of Price Fixing and Collusion in eBook Market

Published on: 10th Jul 2013

?Apple has been found guilty of conspiring to fix the price of eBooks sold through its iTunes platform, although the company says that it plans to appeal the verdict.

Manhattan Judge Denise Cote ruled Apple had "conspired to restrain trade" in how it conspired with [other publishers] to eliminate retail price competition in order to raise e-book prices, and that Apple played a central role in facilitating and executing that conspiracy.

Five other publishers -- Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster -- originally named as defendants alongside Apple had previously reached out of court settlements with the Department of Justice.

"Without Apple's orchestration of this conspiracy, it would not have succeeded as it did in the spring of 2010," the Judge said.

The verdict is not unexpected though, as the Judge had already made pre-trial comments that Apple would struggle to defend itself based on the evidence presented at the time.

According to the Department of Jutice's complaint, the five publishers and Apple were unhappy that competition among e-book sellers had reduced e-book prices and the retail profit margins of the book sellers to levels they thought were too low.

To address these concerns, the DoJ alleges that the publishers worked together to enter into contracts that eliminated price competition among bookstores selling e-books, substantially increasing prices paid by consumers. Before the companies began their conspiracy, retailers regularly sold e-book versions of new releases and bestsellers for, as described by one of the publisher's CEO, the "wretched $9.99 price point."

As a result of the conspiracy, consumers were typically forced to pay $12.99, $14.99, or more for the most sought-after e-books, the DoJ has claimed.

Apple spokesman Tom Neumayr says Apple didn't conspire to fix e-book pricing and would continue to fight the "false accusations".

The court has still to set a hearing that will decide on the fine that Apple will have to pay.

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Tags: [apple]? [ebooks]? [USA]?

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