updated 10:39 am EDT, Wed July 10, 2013
Decision could impact Amazon, iBookstore, future of e-book prices
Apple indeed violated antitrust laws, conspiring with publishers to fix the prices of e-books, US District Judge Denise Cote has ruled in a Manhattan court. The company is said to have colluded with Hachette, Macmillan, HarperCollins, Penguin, and Simon & Schuster in order to undermine Amazon, which until the launch of Apple's iBookstore was able to sell e-books for a standard $10. Cote notes that the publishers' switch to an agency model, prompted by talks with Apple, forced a number of e-books to climb in price to $13 or $15.
"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," the judge comments in her ruling. "Without Apple's orchestration of this conspiracy, it would not have succeeded as it did in the spring of 2010." One of the aspects' of Apple's initial iBookstore agreements gave the company "most favored nation" status, ensuring that no title could be sold for less than it was at the iBookstore.
All of the publishers settled with the Department of Justice before trial, leaving Apple as the sole defendant in the case. Settlement terms banned the publishers from following some of the terms they forged with Apple, including most favored nation clauses.
A damages trial is now expected to take place at an as-yet unscheduled date. Any payments would be received by the federal government and various states, which Cote says are entitled to injunctive relief.