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Apple officially appeals ruling in e-books antitrust case

updated 09:40 am EST, Wed February 26, 2014

Claims verdict was a 'radical departure from modern antitrust law'

Apple has filed an official appeal with the US Court of Appeals for the Second Circuit, seeking to overturn District Court Judge Denise Cote's verdict in July, which found Apple in violation of antitrust laws through its handling of e-book deals. "The district court's ruling that Apple, in the very act of launching the iPad, inventing the iBooks Store, and entering the e-books market, violated the Sherman Act is a radical departure from modern antitrust law and policy. If allowed to stand, the ruling will stifle innovation, chill competition, and harm consumers," the company claims in its appellate opening brief.

Apple also points to Amazon's dominant position in the e-book market -- which was even stronger at the time the iBookstore was launched, representing nine out of 10 sales -- and states that the court "did not find that 'Apple itself desired higher e-book prices than those offered at Amazon,'" but instead found that the iPad "encouraged innovation and competition." Continuing, Apple charges that Cote "repeatedly" applied bad legal standards in her decision, resulting in a "false conclusion of a price-fixing conspiracy."

The company is accused of conspiring with five major book publishers to fix e-book prices with the launch of the iBookstore, inflating them over Amazon's then-typical $10 pricetag. This was allegedly arranged through the switch to an agency model instead of the previous wholesale model used with Amazon, and most controversially "most favored nation" clauses, which prevented any competing vendor from selling books for less than the iBookstore. In the aftermath of the iBookstore's launch, the standard price of e-books climbed to around $13 to $15.



By Electronista Staff
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Comments

  1. b9bot

    Fresh-Faced Recruit

    Joined: 12-22-08

    And the results later proved that the price of books actually went down to a low of $4 a book when Apple entered the market. Totally opposite of the ruling and what the DOJ claims. Coyte pre-determined Apple's guilt before the trial started. I thought that was against the rules of being a judge to begin with. I thought that a case had to heard fully with all facts and evidence presented in court before a judge could even mention of guilt or innocence. Her public statement before the trial even started seems to be a really good reason for Apple to have this case looked at again by hopefully a real judge that will not predetermine the verdict before all testimony and evidence is presented by both sides in court.

  1. b9bot

    Fresh-Faced Recruit

    Joined: 12-22-08

    And the results later proved that the price of books actually went down to a low of $4 a book when Apple entered the market. Totally opposite of the ruling and what the DOJ claims. Coyte pre-determined Apple's guilt before the trial started. I thought that was against the rules of being a judge to begin with. I thought that a case had to be heard fully with all facts and evidence presented in court before a judge could even mention of guilt or innocence. Her public statement before the trial even started seems to be a really good reason for Apple to have this case looked at again. Hopefully by a real judge that will not predetermine the verdict before all testimony and evidence is presented by both sides in court.

  1. chas_m

    MacNN Staff

    Joined: 08-04-01

    Apple, IMO, has a number of strong arguments for a reversal of Judge Cote's verdict -- starting with the fact that it is impossible in US antitrust law for a reseller (a "horizontal" party with multiple interests) to be involved in a "vertical" conspiracy (publishers forcing Amazon to switch to an "agency" pricing model). But it will be interesting to see if different judges (or a jury trial, which Apple is also requesting) make a big difference.

    I will be watching this particularly to see if the obvious contradictory information supplied by Google's witnesses is viewed with skepticism by the new judges (Judge Cote glossed over this problem), and whether Apple's testimony is given more credibility in the new trial (again, Judge Cote appeared to disbelieve everything the Apple executives said, without any clear reason).

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