In a decision that could reshape how books are sold on the Internet, a federal judge ruled that Apple Inc conspired to raise the retail prices of e-books in violation of antitrust law, and called for a trial on damages.
The decision by U.S. District Judge Denise Cote in Manhattan is a victory for the U.S. government and various states, which the judge said are entitled to injunctive relief.
Only Apple went to trial, while the publishers – Lagardere SCA’s Hachette Book Group Inc and Macmillan, News Corp’s HarperCollins Publishers LLC, Pearson Plc’s Penguin Group (USA) Inc and CBS Corp’s Simon & Schuster Inc – settled with the U.S. government and the states.
Cote said the conspiracy resulted in prices for some e-books rising to $12.99 or $14.99, when Amazon had sold for $9.99.
“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 said.
Full Text of Decision
- Apple is guilty in the ebook case. For consumers, not much changes; for Apple, a lot could (via paidContent)
Analysis from Laura Hazard Owen
On Wednesday, Apple remained defiant. “Apple did not conspire to fix ebook pricing and we will continue to fight against these false accusations,” an Apple spokesman said. “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.”
The antitrust battle underscores the turmoil in the book industry as readers shift from ink and paper to electronic devices like tablets and smartphones, where they can buy content with the push of a button. While the publishers want to embrace new media, they are also trying to protect their profits and retain control of their businesses. Apple’s lawyers noted at the trial that the publishers had long complained that Amazon.com’s uniform pricing of $9.99 for new e-book titles was too low.