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Apple Suffers Defeat in E-Book Price Fixing Case
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On Wednesday, a federal judge ruled that Apple was guilty of having colluded with five major U.S. book publishers to drive up the price of e-books. If there is no review or appeal and the ruling becomes final, then there can be a trial for damages in a separate lawsuit brought by 33 US states against Apple.

On top of the lawsuit filed by the attorney generals of 33 states seeking to recover money paid by customers due to price-fixing, Apple is also facing a private class action suit. If plaintiffs in the private class action are able to prove that their claims are distinct from those made by the states, they will be free to proceed.

  
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The other actions were waiting to see the result of the case in federal court, and whether the federal court pronounces Apple breaking U.S. antitrust laws. Now with Wednesday’s decision by U.S. District Judge Denise Cote in Manhattan, that issue is settled unless appealed against.

Holding Apple guilty in the matter, the judge observed in her ruling, “Understanding that no one publisher could risk acting alone in an attempt to take pricing power away from Amazon, Apple created a mechanism and environment that enabled them to act together in a matter of weeks to eliminate all retail price competition for their e-books.”

While the book publishers had settled charges made by federal agencies against them, Apple went ahead alone instead of settling government charges.

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The decision cited many facts including comments made by Steve Jobs as “compelling evidence of Apple’s participation in the conspiracy.”

In 2010, Apple tried to create an agency model where the publishers set the prices of e-books, and Apple received a 30 percent commission on each book sold. Under the model, the publishers also had to provide books at the price the same was available on Amazon or other competitors. This led some publishers to pull their books off other outlets, or require other outlets to accept higher prices.



Apple has expressed its intention to appeal.



 

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