US court finds Apple guilty of conspiring to raise e-book prices

Posted:
in General Discussion edited May 2014
The U.S. government has succeeded in its federal antitrust suit against Apple, as the judge presiding over the case has determined that Apple conspired with book publishers to raise the price of e-books.

Summation
Apple's closing slide in its e-book antitrust case. | Source: U.S. District Court


The decision was handed down by U.S. District Judge Denise Cote in Manhattan on Wednesday. Damages levied against Apple are to follow in a separate trial.

"The question in this case has always been a narrow one: whether Apple participated in a price-fixing scheme in violation of this country's antitrust laws," Cote wrote. "Apple is liable here for facilitating and encouraging the Publisher Defendants' collective, illegal restraint of trade.

"Through their conspiracy they forced Amazon (and other resellers) to relinquish pricing authority and they raised retail e-book prices. Those higher prices were not the result of regular market forces but of a scheme in which Apple was a full participant."

Cote also dismissed the possibility that her ruling will stifle competition in the e-book market. She said her ruling is based solely on events that occurred as Apple entered the e-book market, and she does not "seek to paint with a broader brush."

Closing arguments were presented in the trial last month, on June 20. In its case, the government accused Apple of colluding with five major book publishers to falsely inflate the prices of e-books sold on the iBookstore.

Apple, for its part, denied the charges, and remained steadfast in opposition even as all five book publishers reached out-of-court settlements with the government.

Apple led the charge in convincing publishers to switch to a so-called "agency" pricing model. That prevented content owners from being able to sell the same titles at a lower price elsewhere, without offering the same price on Apple's iBooks platform.

In contrast, the e-book industry prior to the launch of the first iPad was under the "wholesale model" preferred by market leader Amazon. In that model, resellers such as Amazon had the power to set prices, selling titles at or below cost if they chose to do so.

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Comments

  • Reply 1 of 163
    phone-ui-guyphone-ui-guy Posts: 1,012member
    Bullshit! The governments case was so damn weak. It was all basically disproved as Apple had negotiated significantly different contracts with the publishers. Can they appeal this?
  • Reply 2 of 163


    Now that's a surprise considering how Apple's lawyer pretty much dismantled every witness the FTC brought up. I guess the judge is a big Orwell fan where even an e-mail draft (or thought) is good enough to convict.

  • Reply 3 of 163
    philboogiephilboogie Posts: 7,377member
    That closing slide is too funny!
  • Reply 4 of 163
    isteelersisteelers Posts: 738member
    Surprise surprise. The government ruling for themselves. This was going to happen regardless of any evidence Apple presented. One way or another the government will get those tax dollars from Apple.
  • Reply 5 of 163
    kpomkpom Posts: 600member


    No big surprise since the judge basically admitted the whole thing was a show trial early on. It's a case of the DOJ choosing sides in a spat between two big businesses (and the one that had 90% market share on top of it).

  • Reply 6 of 163
    rob53rob53 Posts: 1,765member
    Time for appeal based on the judge's comments before the trial, if you could even call it a trial. Nothing I read showed Apple was guilty but the DOJ had this one in the bag from the beginning. Too many holes in what the DOJ presented. Hearsay, emails taken out of context. From the judge's point of view, any thoughts can be taken as conspiring even if they weren't voiced to someone outside of Apple. With this verdict, everyone in the world is guilt of everything. Time to find out who is funding these attacks on Apple. Apple wins a jury trial against Samsung and the courts refuse to award any damages. DOJ wins a judge-only trial and I bet the damages will be high and immediately demanded.
  • Reply 7 of 163
    jetlawjetlaw Posts: 156member
    Big government; as crooked as they are they can't even rule fairly for a company that seems, in many ways, to be a 'friend' of this administration.
  • Reply 8 of 163
    starbird73starbird73 Posts: 538member
    Land of the free. Home of the brave.
  • Reply 9 of 163
    I kinda hope apple moves all IP off shore and screws the gov't out of all and any tax revenue they can. Then when asked why, apple can simply show all the BS lawsuits it has had to pay through the nose for. This gov't we have loves taxes but seems to hate those who actually pay any
  • Reply 10 of 163
    rogifanrogifan Posts: 10,669member
    Obviously hiring Lisa Jackson didnt help Apple out here. I hope they stay away from getting in bed with the government in the future.
  • Reply 11 of 163
    wurm5150wurm5150 Posts: 763member
    This is far from over.. Apple will appeal this all the way to the Supreme Court..which happens to be a business friendly.
  • Reply 12 of 163
    I wish Apple would stop doing this kind of stuff, they make so much money why do they need to cheat. I'm a huge fan, but how much money do you need?
  • Reply 13 of 163

    Quote:

    Originally Posted by PhilBoogie View Post



    That closing slide is too funny!


     


    Instead of closing the book, I expect that Apple are about to have it thrown at them.

  • Reply 14 of 163
    nikiloknikilok Posts: 383member
    I dont think anyone with some brains would give a shit about such biased ruling made by the Government. Makes them look bad.
  • Reply 15 of 163
    ghostface147ghostface147 Posts: 1,629member
    Boom! Hahahaha...
  • Reply 16 of 163
    lkrupplkrupp Posts: 5,650member
    Was there ever any doubt? Not about Apple's guilt but about the predetermined outcome of the trial. Now that Barnes & Noble are circling the drain, abandoning the Nook, how long until we have only one place to buy real or electronic books? That place being Amazon.

    What a beautiful world it will be when all we have are Google and Amazon to fulfill our every need.
  • Reply 17 of 163
    island hermitisland hermit Posts: 6,217member

    Quote:

    Originally Posted by Gerald Thomas View Post



    I wish Apple would stop doing this kind of stuff, they make so much money why do they need to cheat. I'm a huge fan, but how much money do you need?




    Could somebody close the back door...  please...

  • Reply 18 of 163
    jkichlinejkichline Posts: 1,259member
    This is bullshit. A business trying to ADD competition gets slapped with anti-competition? Give me a break America. What a farce.
  • Reply 19 of 163
    malaxmalax Posts: 1,598member

    Quote:

    Originally Posted by Gerald Thomas View Post



    I wish Apple would stop doing this kind of stuff, they make so much money why do they need to cheat. I'm a huge fan, but how much money do you need?


    Welcome to AppleInsider; the waiting room for trolls is to the left around the corner.

  • Reply 20 of 163
    lkrupplkrupp Posts: 5,650member

    Quote:

    Originally Posted by stike vomit View Post


     


    Instead of closing the book, I expect that Apple are about to have it thrown at them.



     


    There are no financial penalties involved with this action, no fines. The hit will come from class action lawsuits sitting in the wings while waiting for this forgone conclusion.

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