District judge rules Apple is guilty of anti-competitive behavior
A judge ruled Wednesday that Apple conspired to fix e-book prices.
U.S. District Judge Denise Cole in Manhattan found the technology giant violated antitrust law by aligning itself with publishers in an effort to undercut Amazon's hold on online book sales. She called for a trial to assess damages.
Assistant Attorney General Bill Baer, who heads the Department of Justice’s Antitrust Division, hailed the court's decision as a victory for consumers.
“Through today’s court decision and previous settlements with five major publishers, consumers are again benefitting from retail price competition and paying less for their e-books," Baer said in a statement.
A spokesman for Apple denied that company had engaged in anti-competitive behavior and said it would continue to fight the court's decision.
"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," Tom Neumayr, a spokesman for Apple, said in a statement to TheWrap. "We've done nothing wrong and we will appeal the judge's decision."
The publishers originally named along with Apple in the government's anti-trust suit included Simon & Schuster, Hachette, HarperCollins, Macmillan and Penguin Group. All of them settled the case outside of court.
At the heart of the dispute was a question of who had the ability to set prices for e-books — retailers or publishers. As Apple was preparing to launch its iPad device in late 2009, the technology company offered publishers an "agency model" that allowed them to establish pricing. As part of the agreement, Apple was guaranteed a 30 percent commission on sales.
Prior to the new model, Amazon had established a baseline price of $9.99 for e-books on its Kindle. Under the alleged pact with Apple, costs of e-books rose to as much as $14.99, the Justice Department's suit claimed.