A judge has found Apple Inc. (NASDAQ:AAPL) guilty in the e-book price fixing case. Judge Denise Cote ruled that the company did collude with five U.S. publishers to push up e-book prices just before the company entered the market three years ago, reports Reuters’ Jonathan Stempel.
Details On Apple’s Trial
The trial lasted for about three weeks, and the Department of Justice said Apple Inc. (NASDAQ:AAPL) conspired with the five publishers in January 2010 in an effort to push prices higher for new releases and best sellers. The publishers were reportedly concerned about Amazon’s pricing model, which was $9.99 for books in those categories. The DoJ said that as a result of the conspiracy between Apple Inc. (NASDAQ:AAPL) and the publishers, prices of bestselling e-books jumped to $12.99 and $14.99.
The publishers in the case settled with the DoJ earlier, but Apple Inc. (NASDAQ:AAPL) decided instead that it would go to trial. The judge ruled that Apple was the leader of the conspiracy.
Both Sides Of The Case
In presenting its case, government lawyers presented a series of emails and other communications between Apple Inc. (NASDAQ:AAPL) executives and the publishers. They also had testimony from representatives from the five publishers which conspired with Apple, while Apple brought testimony from some of its top executives, including Eddy Cue, who the government said was the leader in the e-book price fixing case.
Apple Inc. (NASDAQ:AAPL) argued that it simply used the agency pricing model for books and that it was a legitimate pricing model apart from the wholesale model used by Amazon.com, Inc. (NASDAQ:AMZN). At the time of the company’s entry into the e-book market, some publishers were holding back their bestsellers from Amazon because of the lower prices, and Apple Inc. (NASDAQ:AAPL) felt like it wouldn’t be able to compete successfully if it did not receive the bestsellers as soon as possible.
Next Steps For Apple
Next there will be a separate trial for Apple Inc. (NASDAQ:AAPL) to determine the amount of damages that should be awarded. The judge ruled that some states and the U.S. government are entitled to injunctive relief.
