Apple Inc. (NASDAQ:AAPL) has finished its closing arguments in its e-book price fixing trial. The Los Angeles Times’ Andrew Tangel and Chris O’Brien report that the company maintained its innocence in the case, stating that it did not conspire with publishers to fix prices.
Updates On Apple Inc. (AAPL)’s Trial
The case has lasted three weeks, and it centers around Apple Inc. (NASDAQ:AAPL)’s price setting plan back in 2010 when it entered into the e-book market. The iBookstore was launched as a competitor to Amazon.com, Inc. (NASDAQ:AMZN)’s Kindle store. The U.S. government alleges that Apple Inc. (NASDAQ:AAPL) convinced five major e-book publishers to fix the prices of their books higher, specifically using an agency pricing model rather than the wholesale model Amazon uses.
The five publishers Apple Inc. (NASDAQ:AAPL) is accused of conspiring with to fix e-book prices settled with the U.S. government before the trial. The U.S. government will give its closing arguments later this afternoon.
Apple Inc. (AAPL)’s Closing Arguments
In Apple Inc. (NASDAQ:AAPL)’s closing statements, the company’s attorney said that the government has overreached because it doesn’t have enough clear evidence. He also said that the government is attempting to punish business practices that have been used legitimately in the past.
He said the e-book business was entirely new to Apple Inc. (NASDAQ:AAPL)’s Eddy Cue, the company’s chief negotiator, and co-founder Steve Jobs, who was also involved in the negotiations. He stated that when Apple Inc. (NASDAQ:AAPL) entered into the e-book market, there was controversy over prices because publishers were annoyed with Amazon.com, Inc. (NASDAQ:AMZN)’s wholesale pricing model.
Another issue he had with the government’s case was its use of what he said were simple phone calls and emails between Apple Inc. (NASDAQ:AAPL)executives and the publishers. The government claimed they showed a conspiracy to fix prices, but he said they were just evidence of the companies’ negotiations.
He also emphasized that Apple Inc. (NASDAQ:AAPL) didn’t know if the publishers were fixing e-book prices and that before late 2009, it didn’t even know which companies were the major players.
The Implications For Apple Inc. (AAPL)
If the judge rules in favor of the government, Apple Inc. (NASDAQ:AAPL)’s attorney told the judge that it would have a “chilling and confounding” impact on content markets and commerce around the country.