Judge finds Apple guilty in ebooks conspiracy
NEW YORK CITY — A judge Wednesday found Apple guilty of a price-fixing conspiracy for electronic books, saying the company “conspired to restrain trade” with publishers to boost the price of ebooks.
Judge Denise Cote, who presided over a bench trial in New York, said in her opinion that “Apple is liable here for facilitating and encouraging the Publisher Defendants’ collective, illegal restraint of trade.” She ordered a new hearing to determine damages.
Each of the five publishers originally named in the US government’s civil lawsuit settled the case, leaving Apple to stand trial alone.
Apple’s chief executive Tim Cook had said ahead of the trial that the California firm would not settle, claiming it had done nothing wrong but was merely pursuing normal business practices.
The trial focused on a six-week period in late 2009 and early 2010 during which Apple negotiated contracts with publishers ahead of its iPad launch and proposed a new and more profitable business model.
At the time, publishers were furious at the state of the market dominated by Amazon, which sold most bestsellers for just $9.99.
Amazon held “wholesale” contracts with publishers in which it set prices. Apple’s contracts shifted to an “agency” model where publishers set the price in exchange for a 30 percent commission to Apple.
Prior to Apple’s entry, the publishers — all of whom have settled in the case — would complain about Amazon’s $9.99 price at private dinners in fancy New York restaurants, but each feared taking on the Internet giant alone.
Among the publishers settling the case, the largest was with Penguin for $75 million, while a settlement with Hachette, Harper Collins and Simon & Schuster created a $69 million fund for refunds to consumers. Macmillan settled for $26 million.
Get Inquirer updates while on the go, add us on these apps:
Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94