Apple Anti-Trust Suit Gets Underway in Court

Jun 04, 2013

In April of 2012 a suit was filed in New York by the Department of Justice against Apple and five publishers -- Penguin Group, Harper Collins, Simon & Schuster, Hachette and Macmillan - alleging that the companies colluded to keep ebook prices high. Over the past year the publishers have settled, but Apple refused and is now getting its day in court. The trial started on Monday.

The DOJ says Apple conspired with the publishers to set up agency pricing - where the publishers set a retail price and Apple gets to keep a percentage. Amazon - Apple's main competitor in the ebook market - has long bought books (and ebooks) wholesale and sold them at a price of their own determination.

Critics have been vocal that if the DOJ wins this case, Amazon will effectively have a monopoly when it comes to setting the price of ebooks. Authors and publishers alike have spoken out against the suit. In the meanwhile, Apple has maintained that it did nothing wrong, even when  district judge Denise Cote - who is hearing the case without a jury - urged it to settle saying she believed the prosecution could prove that Apple had "knowingly participated in and facilitated a conspiracy to raise prices of ebooks."

If the company is found guilty it will effect ebook pricing going forward, but Apple could also owe damages to states and consumers. The publishers have already paid a combined $164 million and are expected to testify against Apple.


Related Articles

At the outset of the antitrust lawsuit brought by the Department of Justice, things didn't look good for Apple. Even the judge hearing the case in lieu of a jury urged the company to settle, like its co-defendents had all done. But Apple refused, and in the second week of the trial, things are looking up for the company.