Apple denies e-book pricing conspiracy, despite ruling

A federal judge Wednesday found that Apple violated antitrust law in helping raise the retail price of e-books, saying the company ?played a central role in facilitating and executing? a conspiracy with publishers.

?Without Apple's orchestration of this conspiracy, it would not have succeeded as it did in the spring of 2010,? the judge, Denise Cote of U.S. District Court in Manhattan, said in her ruling. She said a trial for damages would follow.

Government lawyers argued in court last month that Apple had colluded with five big U.S. publishers to raise prices for electronic books across the publishing market.

The Justice Department brought the antitrust case against Apple and the publishers a year ago. The publishers settled their cases, but Apple executives insisted that the company had done nothing wrong, and the company continued to insist that Wednesday.

?Apple did not conspire to fix e-book pricing and we will continue to fight against these false accusations,? said Tom Neumayr, an Apple spokesman. ?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.?

The Justice Department said the judge's decision was a victory for e-book buyers.

?Companies cannot ignore the antitrust laws when they believe it is in their economic self-interest to do so,? the Justice Department said in a statement. ?This decision by the court is a critical step in undoing the harm caused by Apple's illegal actions.?

It appears unlikely that the ruling will have an immediate effect on the book-buying public. The publishers who have already settled with the government are operating under the settlement's terms, which prohibit publishers from restricting a retailer's ability to discount books.

In his testimony, Eddy Cue, Apple's senior vice president of Internet software and services, who was in charge of negotiating deals with the publishers, conceded that Apple opened the door for book publishers to raise prices in its own e-book store. But he said that the company was not intending to push Amazon to raise its prices, too.

?Amazon could have negotiated a better deal,? Cue said in his testimony. ?They had a lot more power.?

But the Justice Department said Apple's deal with the publishers left Amazon with no choice but to raise prices. When Apple entered the e-book market in 2010, it changed the way publishers sold books by introducing a model called agency pricing, where the publisher ? not the retailer ? sets the price, and Apple took a cut of each sale. As a result, the publishers were able to set e-book prices higher. Apple proposed price caps of $12.99 and $14.99.

Apple also included a condition in its contracts, called the most-favored nation clause, requiring the publishers to allow Apple to sell e-books at the same price as the books would be sold in any other store. Apple has said the clause was intended to guarantee that its customers got the lowest e-book prices, but the government argued that it defeated price competition.

The Justice Department said that the publishers used their relationship with Apple, combined with the most-favored nation clause, to threaten Amazon to switch to the agency model so they could raise prices. If Amazon did not agree to those terms, the government said, the publishers intended to withhold their e-books from the retailer until the more expensive hardcover books had been on the market for a while.

Source: http://www.omaha.com/article/20130711/MONEY/707119936

black friday deals Sephora Cyber Monday 2012 Walmart.com detroit lions Thanksgiving Day cooking a turkey