Jul 10th, 2013, 2:25 pm






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After a trial and several settlements with other publishers, a judge has ruled that Apple conspired to raise the price of ebooks from major publishers. Reuters reports that a trial for damages will be held at an unspecified future date. Apple was originally accused of price fixing in 2012, along with five of the six major publishers. Several publishers quickly caved, and all had agreed to settlements by early 2013, leaving Apple the only company facing a trial.


The Department of Justice accused the companies of banding together to keep ebooks above Amazon's rock-bottom discounts and chip away at its Kindle-fueled runaway lead in the ebook market. To do so, they relied on an agency model, which allowed publishers — not retailers — to set prices. The case hinged not on the agency model directly, but on the allegation that Apple's Eddy Cue and others met with publishers and suggested they accept the model, then helped them share pricing plans to coordinate pricing. By doing so, Apple could boost its market share, and publishers could avoid the dreaded $9.99 price point that Amazon offered.



In her ruling, Judge Denise Cote said that she found the Justice Department's case compelling. "The Plaintiffs have shown that the Publisher Defendants conspired with each other to eliminate retail price competition in order to raise e-book prices," she wrote, "and that Apple played a central role in facilitating and executing that conspiracy. Without Apple's orchestration of this conspiracy, it would not have succeeded as it did in the Spring of 2010."


Apple and publishers, she said, shared an "overarching interest" in cutting down Amazon's lead, and "Apple seized the moment and brilliantly played its hand. Through the vehicle of the Apple agency agreements, the prices in the nascent e-book industry shifted upward, in some cases 50 percent or more for an individual title." And some of the most damning evidence, she said, came all the way from the top of Apple.


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