Apple found guilty of violating antitrust laws by raising e-book prices

  • 10/07/2013 AT 18:41 by It's a Gadget Staff
  • News

JudgeIn a case that has been watched with interest from people in both the publishing and technology industries, a judge has ruled that Apple conspired to illegally raise ebook prices and keep down competitors.

The lawsuit was filed by the Department of Justice in 2012, alongside 33 states and territories of the US. Five publishers had also been sought and settled with massive penalties for each. But Apple held on through a trial, one that early on experts warned the company they would not win.

Now, Judge Denise Cote has made her ruling, stating that there was substantial evidence to support the claims that Apple violated anti-trust laws. This evidence included phone calls, emails, recalled conversations with the accused publishers, and even words from the late Steve Jobs who appears to have been at the center of the scheme.

“The evidence is overwhelming that Apple knew of the unlawful aims of the conspiracy and joined that conspiracy with the specific intent to help it succeed,” the 160-page ruling read.

During the course of this scheme, Apple specifically targeted Amazon, which once held a 90% share in ebook sales. Publishers had long since been angry over the low prices offered by Amazon, which averaged $9.99 or less. Based on the conspiracy, publishers ended up raising prices between 14% and 42%.

Apple spokesman Tom Neumayr released a statement denying the accusations, making it clear that the company intends to appeal the decision.

“Apple did not conspire to fix e-book pricing. 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.”

It doesn’t seem likely that an appeal will work, based on the overwhelming evidence that was provided at trial. Not to mention the settling of each of the five publishers, which doesn’t exactly look good for Apple. But big businesses have managed to get out of worst cases, and often it is a matter of finding the “right” judge. Who knows what will come of their appeal in the next couple of years?

Apple released a statement thorough their spokesperson:

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.

In any case, I doubt people are terribly surprised to find Apple engaging in unethical practices. It is a common enough accusation that they face, and anti-trust violations are par the course for technology companies these days.

Or maybe I am just being cynical. Either way, this is a pretty clear victory for consumers.

Source: Reuters


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