Apple Found to Have Conspired to Fix E-Book Prices
Breaking news today from New York had Apple once more trending worldwide, but this time it was not for the release of a new iPhone or iPad, but rather because, as Mashable reports, a New York district judge has held up a complaint that Apple was guilty of conspiring with publishers to fix the retail prices of e-books, and thus breaking antitrust and state laws. Here’s what U.S. District Judge Denise Cole said about the ruling, courtesy of Mashable:
Apple was the only one of the named companies that defended the case in court, with the five publishers in question (Hachette, HarperCollins, Macmillan, Penguin, and Simon & Schuster) all settling with the Department of Justice and the 33 relevant states out of court. Damages to be paid by Apple will be determined in another trial.
"The Plaintiffs have shown that the Publisher Defendants conspired with each other 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," Cote wrote in the ruling. Without Apple's involvement, the publishers would not have been able to work together to raise prices and battle against Amazon, she added. Apple argued during the trial that its role was more passive.
"Apple did not want to compete with Amazon (or any other e-book retailer) on price; and the Publisher Defendants wanted to end Amazon’s $9.99 pricing and increase significantly the prevailing price point for e-books," Cote wrote. "Apple decided to offer the Publisher Defendants the opportunity to move from a wholesale model — where a publisher receives its designated wholesale price for each e-book and the retailer sets the retail price — to an agency model, where a publisher sets the retail price and the retailer sells the e-book as its agent."
Apple has issued the following statement strongly denying the result of the ruling and saying that it intends to appeal.
“Apple did not conspire to fix ebook pricing and we will continue to fight against these false accusations. When we introduced the iBookstore in 2010, we gave customers more choice, injecting much needed innovation and competition into the market, breaking Amazon's monopolistic grip on the publishing industry. We've done nothing wrong and we will appeal the judge's decision.”