A U.S. judge on Wednesday found that Apple violated antitrust law
in helping set the retail price of e-books. Apple said it would
appeal the decision.
A federal judge on Wednesday found that Apple violated antitrust
law in helping set the retail price of e-books, saying the company
"played a central role in facilitating and executing that
conspiracy" among publishers.
"Without Apple's orchestration of this conspiracy, it would not
have succeeded as it did in the spring of 2010," the judge, Denise
L. Cote of the United States District Court in Manhattan, said in
her ruling. She said a trial for damages would follow.
The Justice Department brought the antitrust case against Apple
and five publishers a year ago, arguing that the companies had
colluded to raise the prices for electronic books across the
publishing market. The publishers all settled their cases, but Apple
executives insisted that the company had done nothing wrong and
fought the charges during a three-week trial.
Apple said through a spokesman Wednesday that it would appeal the
"Apple did not conspire to fix e-book pricing and we will
continue to fight against these false accusations," said Tom
Neumayr, an Apple spokesman. "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. We've done nothing
The antitrust battle underscores the turmoil in the book industry
as readers worldwide shift from ink and paper to electronic devices
like tablets and smartphones, where they can buy content with the
push of a button. While the publishers want to embrace new media,
they are also trying to protect their profits and retain control of
A survey of the publishing industry showed that in the United
States, e-books accounted for 20 percent of publishers' revenue,
more than $3 billion, up from 15 percent the year before. E-books
have had a slower rate of adoption in Europe and the rest of the
world, but analysts expect that major growth there will develop in
the next several years. A report by Forrester predicted that Europe
will be the largest e-book market in the world by 2017, with revenue
of $19 billion.
The Justice Department said Wednesday that the judge's decision
was a victory for people who buy e-books.
"Companies cannot ignore the antitrust laws when they believe it
is in their economic self-interest to do so," a Justice Department
statement said. "This decision by the court is a critical step in
undoing the harm caused by Apple's illegal actions."
It appears unlikely that the ruling will have an immediate effect
on prices. The five publishers who have already settled with the
government -- Hachette Book Group, HarperCollins, Macmillan, Penguin
Group USA and Simon & Schuster -- already operate under the
settlement's terms, which prohibit publishers from restricting a
retailer's ability to discount books.
Since the settlements have gone into effect, prices on many newly
released and best-selling e-books have declined. One New York Times
best-seller, "And the Mountains Echoed," by Khaled Hosseini, is sold
on Amazon.com for $10.99. But other e-books seem to have held closer
to pre-settlement prices: "The Ocean at the End of the Lane," by
Neil Gaiman, is listed for $12.80 on Amazon.
Apple's lawyers noted at the trial that the publishers had long
complained that the uniform pricing of $9.99 by Amazon, which at the
time controlled about 90 percent of the e-book market, was too low.
Amazon now controls about 60 percent of that market.
In his testimony, Eddy Cue, Apple's senior vice president of
Internet software and services, who was in charge of negotiating
deals with the publishers, conceded that Apple opened the door for
book publishers to raise prices in its own e-book store. …