Federal judge finds Apple guilty of e-book price fixing

[JURIST] A judge for the US District Court for the Southern District of New York [official website] on Wednesday ruled [opinion] that Apple [corporate website] violated the Sherman Act [text] and various state statutes in an e-book price-fixing conspiracy. The US Department of Justice (DOJ) [official website] accused Apple of working with major publishers to increase the price of their e-books. Five publishers, Hachette Book Group Inc., HarperCollins Publishers L.L.C., Simon & Schuster Inc., Penguin Group (USA) Inc. and Macmillan, were originally named in the complaint [text, PDF] but since reached a settlement with the government. Assistant Attorney General Bill Baer called the ruling [AP report] a victory for consumers. Apple spokesman Tom Neumayr, however, continues to deny the accusations and stated that the company will appeal the decision. Among other requests for damages, the DOJ is requesting that Apple establish an antitrust compliance program as well as antitrust training for executives. The ruling stated that a scheduling order will now follow in order to determine damages.

In May Judge Denise Cote gave a tentative opinion [JURST report] that the government would be successful in its antitrust claim. The DOJ alleged that Apple, Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster conspired to fix the prices of e-books in response to Amazon's discount pricing strategy. The DOJ originally brought the suit in April 2012, and the court denied a motion to dismiss [JURIST reports] in May of last year. Commentators had been very mixed in response to the proposed settlement agreement. Some have suggested that the DOJ's lawsuit is merely "superficial" [JURIST op-ed] and that the effect of the agency agreements may actually have been a net-positive to consumers if Amazon was selling e-books at a loss in order to drive the sale of Kindles.

 

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