Apple Guilty In E-Book Price-Fixing Lawsuit

A New York district judge has found Apple guilty of conspiring to price-fix the cost of e-books sold on behalf of various book publishers. The courts ruling finds Apple guilty of antitrust and state laws.

The court will soon award damages in a date that has yet to be determined.

The trial was brought forth after Apple was accused of colluding with five book publishers that included Hachette, HarperCollins, Macmillan, Penguin, and Simon & Schuster. Those companies worked together to raise the cost of bestsellers from an Amazon standard of $9.99 to an average level between $12.99 to $14.99.

According to the lawsuit, Apple met with those publishers for two months leading up to the January 2010 release of its own iBookstore platform.

US District Judge Denise Cote claims Apple helped double the cost of some e-book prices.

In the ruling, Cote writes:

“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.”

Apple attempted to argue that its role in e-book price-fixing was passive while Cote’s in the ruling says the publishers would never have gathered together to fix prices without Apple’s assistance.

Cote’s further writes:

“Apple did not want to compete with Amazon (or any other e-book retailer) on price; and the Publisher Defendants wanted to end Amazon’s $9.99 pricing and increase significantly the prevailing price point for e-books. Apple decided to offer the Publisher Defendants the opportunity to move from a wholesale model — where a publisher receives its designated wholesale price for each e-book and the retailer sets the retail price — to an agency model, where a publisher sets the retail price and the retailer sells the e-book as its agent.”

Following the judge’s decision, Apple released the following statement:

“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.”

What we know at this time is that e-book prices most certainly rised after Apple’s iBookstore was introduced.

Thirty-three states will be eligible for injunctive relief after damages are awarded.

Do you think Apple is guilty of e-book price-fixing practices?