Apple Found Guilty in E-Book Antitrust Trial

While all of the big publishers settled with the government, Apple fought with them over the company engaging in price fixing e-books; and it looks like it is going to cost for Tim Cook and the company.

Recently, US District Judge, Denise Cote, ruled against Apple for violating antitrust laws by engaging in schemes to price fix e-books in the market; which caused other online e-book sellers, like Amazon, to follow the same. This follows a year’s worth of development saying that the company and five publishers practiced in the tactic known as the agency model. Under this model, the publisher, and not the retailer, set prices on each book; letting e-book prices to remain high with books costing as much as 30%-50% higher than its competitive retail pricing ($12.99 and $14,99 rather than the standard e-book price of $9.99), with Apple taking 30% of the cut. Publishers who were accused of pricing fixing books with Apple include Verlagsgruppe Georg von Holtzbrinck GmbH’s Macmillan unit, CBS Corp.’s Simon & Schuster, Lagardere SCA’s Hachette Book Group, Pearson Plc’s Penguin unit and News Corp.’s HarperCollins, though all of the publishers settled out of court.

While Apple executives argued that the company was just simply working with publishers who were unhappy with the way Amazon priced its books, the judge decided that the Company played “a central role in facilitating and executing that conspiracy”. Cote said, in her opinion, that “the plaintiffs have shown that Apple conspired to raise the retail price of e-books and that they are entitled to injunctive relief”.

As of right now, no word is said on how much the company has to pay for damages. Apple’s spokesperson, Tom Neumayr, says that the company will appeal in the ruling on the matter. Though with the amount of evidence based against the company, it is not likely the appeal will work.