Apple Found Guilty of Ebook Price Fixing, Vows to Appeal
Posted on July 10, 2013
As expected, Apple lost big time in the ebook price fixing case in which the U.S. Justice Department prosecuted the company for colluding with major book publishers to illegally fix the price of ebooks sold to consumers. U.S. District Judge Denise Cote ruled that the U.S. government had presented "compelling evidence" that Apple violated federal antitrust laws and was a ringleader of a conspiracy with book publishers to raise prices sold to consumers on Amazon.com. She found the company guilty of price fixing. Judge Cote made short shrift of Apple's defense saying, "Apple chose to join forces with the publisher defendants to raise e-book prices and equipped them with the means to do so. Without Apple's orchestration of this conspiracy, it would not have succeeded as it did."
Apple was furious at the ruling and has vowed to appeal. It couldn't possibly have been surprised by the ruling, however. There was overwhelming testimony from the late Steve Jobs discussing how he and the book publishers created a plan so that they could keep the ebook prices higher. Unfazed by the avalanche of evidence against it, Apple released a statement released today in which it denied that it conspired to fix ebook pricing and said it would continue to fight against "false accusations." Apple seemed especially upset at the judge's ruling which discussed how Apple conspired to force readers to pay higher prices. Apple said that its iBookstore, "gave customers more choice, injecting much needed innovation and competition into the market, breaking Amazon's monopolistic grip on the publishing industry." Apple added, "We've done nothing wrong and we will appeal the judge's decision."
Needless to say, the government was extremely happy at the verdict. Bill Baer, Assistant Attorney General of the Department of Justice Antitrust Division, had this to say: "This result is a victory for millions of consumers who choose to read books electronically...Companies cannot ignore the antitrust laws when they believe it is in their economic self-interest to do so. This decision by the court is a critical step in undoing the harm caused by Apple's illegal actions." You can see the 159 page ruling in a pdf file here.