June 3, 2013
Apple’s eBook Price-Fixing Trial Scheduled To Start Monday
redOrbit Staff & Wire Reports — Your Universe Online
According to Brian X. Chen and Julie Bosman of the New York Times, the case, which was brought against the Cupertino, California-based tech giant by the US Justice Department, accuses Apple and five publishers (HarperCollins, Penguin Group, Simon & Schuster, Hachette Book Group, and MacMillan) of conspiring to increase eBook costs by letting publishers, not retailers, determine prices.
The Justice Department claims that their motivation “was to defend themselves against Amazon, which was setting the price of most new eBooks at $9.99 and becoming increasingly dominant in the market,” Chen and Bosman said. “Simon & Schuster, HarperCollins and the Hachette Book Group settled the day that charges were filed; Penguin and Macmillan settled months later.”
Chen and Bosman said that many believe Amazon.com, which currently controls more than half of the eBook market, was responsible for inciting the investigation. The online retail giant declined their request for comment.
The government is not seeking damages, according to Reuters reporter Nate Raymond. Instead, they are hoping to obtain a court order prohibiting Apple from engaging in similar conduct in the future. However, if the iPad developers are found liable, it could still be hit with damages in a potential class action lawsuit.
Joe Palazzo of the Wall Street Journal said that the Justice Department appears to be going into Monday´s proceedings with an edge over Apple — largely due to comments made by US District Judge Denise Cote, who is presiding over the case, during a pretrial hearing last month.
Cote said that she felt the government “will be able to show at trial direct evidence that Apple knowingly participated in and facilitated a conspiracy to raise prices of [eBooks], and that the circumstantial evidence in this case, including the terms of the agreements, will confirm that.”
When asked why the company did not choose to settle with the Justice Department, Apple Chief Executive Tim Cook called the case “bizarre” and told reporters, “We've done nothing wrong there, and so we're taking a very principled position of this“¦ We were asked to sign something that says we did do something, and we're not going to sign something that says we did something we didn't do. And so we're going to fight.”
Even if the government wins, Chen and Bosman said that there might be no impact on eBook prices.
“Are consumers going to be better off as a result of any government win here?” Charles E. Elder, an antitrust lawyer with Irell & Manella, which is not involved in the case, told the New York Times. “That´s going to have to be seen depending on what happens to book publishing generally. It´s in trouble, and [eBooks] are either the savior or they´re going to hasten the demise of book publishers.”