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Judge Says Apple Guilty of Conspiring to Fix Prices of E-Books

Judge Says Apple Guilty of Conspiring to Fix Prices of E-Books

A federal judge on Wednesday has ruled that Apple did conspire to raise the prices of e-books. A trial for damages will be held at an unspecified future date.

Gavel

Reuters:

The decision by U.S. District Judge Denise Cote in Manhattan is a victory for the U.S. government and various states, which the judge said are entitled to injunctive relief.

Apple was accused of price fixing in 2012, along with five of the six major publishing houses. All parties other than Apple had agreed to settlements by 2013, leaving Apple to go it alone in the trial.

The Verge reported that Judge Cote in her ruling said that she found the Department of Justice’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, 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.”

She continued, saying Apple and the publishers 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.”

The ruling by Judge Cote follows a non-jury trial that ended on June 20.

(UPDATE 7/10/13) – Apple gave the following comment to AllThingsD in response to the court’s decision:

Apple did not conspire to fix ebook pricing and we will continue to fight against these false accusations. When we introduced the iBookstore in 2010, we gave customers more choice, injecting much needed innovation and competition into the market, breaking Amazon’s monopolistic grip on the publishing industry. We’ve done nothing wrong and we will appeal the judge’s decision.

  1. Paul Schram says:

    This is probably true. Before I got my first iPad I would by e-books from the Kindle store and read them on my iPod Touch. Books cost between $9.99 to $11.99 on average, or less. Then iBooks comes out with higher prices, so although I loved the iBooks app more than the Kindle one at the time, I continued to buy books from Amazon. Then a year later, new books on the Kindle store are $14.99 to $18.99 for a new release. Come on Apple!!!! Do you need all the money there is?????

    1. Eric M says:

      That doesn’t make any sense. Kindle prices went up so you think  Apple wants all the money? Amazon got greedy when they saw people would pay more. I paid more because the iBooks experience is simply much better. Not to mention ebooks books are still mostly 9.99. This judge doesn’t understand simple business. This ruling is a joke.

      1. Paul Schram says:

        Actually it makes perfect sense. The prices were very reasonable before the iBook Store. Then, if the charges are true, Apple, in collusion with the publishers raise the digital prices. So naturally they charge more to Amazon, so the Kindle prices have to go up. And it’s all so Apple can make more money on digital books. Don’t get me wrong, I have and iPod, iPad, and 2 Apple TVs. I love Apple over everything else. But in this case I think Apples’ getting a little too greedy. Just my opinion.

        1. Alexander says:

          This is absolutely wrong. Its not that Apple got greedy, actually, do you think they need money? come on, a company like Apple doesnt need to be doing wrong practices for money. This is a poor interpretetion of the judge. In any case Amazon is the one who got greedy for increasing the prices offering the same, ibooks offers a way better experience so the price is right I think. But Amazon just raised the price and offered no improvement of the experience THEY just wanted the money.

          1. My sentiments as well.

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