A US judge has ruled that electronic giant Apple conspired with five publishers to raise the retail prices of e-books. The anti-trust ruling sought by the US Department of Justice could expose Apple to damage claims.
Apple Inc. vowed on Wednesday to appeal a ruling by US District Court Judge Denise Cote who found that the giant violated retail price competition among e-book publishers in 2010 when it launched its iPad device.
Judge Cote, who presided over the two-and-half-week, non-jury trial in the US District Court in Manhattan, ordered a further hearing to determine damages.
The case against alleged price-fixing was brought by the US Department of Justice and 33 US states.
Only Apple went to trial. The publishers, including New Corp’s HarperCollins Publishers LLC and Georg von Holtzbrinck publishing house division Macmillan, settled by agreeing to make compensatory payments to benefit consumers.
‘Illegal restraint of trade’
“Apple is liable here for facilitating and encouraging the [publishers’] collective, illegal restraint of trade,” Cote wrote in her verdict.
She rejected arguments from Apple, which claimed its entry into the e-book market in 2010 had promoted competition. Its innovations, while admirable, were irrelevant to the case, Cote ruled.
The judge also determined that comments from Apple’s late chief executive, Steve Jobs, proved the government’s allegations of a conspiracy.
Apple was accused of conspiring to erode the-then 90 percent e-book market share of online retailer Amazon.com Inc’s, which typically charged $9.99 (7.78 euros) for bestsellers for its Kindle reading device under “wholesale” contracts with publishers.
Under Apple’s so-called “agency agreements” with the five publishers, mainstream e-books were sold for $12.99 and $14.99.
The Department of Justice hailed the ruling: “Companies cannot ignore antitrust laws when they believe it is in their economic self-interest to do so,” said Assistant Attorney General Bill Baer.
No conspiracy, says Apple
“Apple did not conspire to fix e-book pricing and we will continue to fight against these false accusations,” said Apple spokesman Tom Neumayr.
“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,” Neumayr said.