Apple played 'central role' in price-fixing of ebooks
US federal authorities have found Apple guilty of conspiring with book publishers to push-up ebook prices with US district judge Denise Cote ruling that Apple played a "central role" in a conspiracy with the biggest book publishers to fix prices in violation of antitrust law.
Executives met in the private dining rooms of upscale New York restaurants to complain about Amazon's low prices, and asked Apple what could be done about, according to Cote's ruling. She added that damages would be determined at a new hearing while Apple continued to maintain their innocence.
It always looked like Apple would fail, as publishers Hachette Book Group Inc, Macmillan, HarperCollins Publishers LLC, Penguin Group and Simon & Schuster had already settled with the Department of Justice.
"The plaintiffs have shown that the publisher defendants conspired with each other to eliminate retail price competition in order to raise e-book prices, and that Apple played a central role in facilitating and executing that conspiracy," Cote said in the decision. "Without Apple's orchestration of this conspiracy, it would not have succeeded as it did in the spring of 2010."
According to the court, Apple and the publishers meetings ensured that prices were raised to $12.99 and $14.99.
"With a full appreciation of each other's interests, Apple and the publisher defendants agreed to work together to eliminate retail price competition in the e-book market and raise the price of e-books above $9.99," said Cote, adding: "On a fairly regular basis, roughly once a quarter, the CEOs of the publishers held dinners in the private dining rooms of New York restaurants, without counsel or assistants present, in order to discuss the common challenges they faced, including most prominently Amazon's pricing policies."
In a statement after the ruling, Apple said: "Apple did not conspire to fix ebook pricing and we will continue to fight against these false accusations. 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 wrong and we will appeal the judge's decision."