Apple Loses Government's Antitrust Lawsuit Over E-Books
Apple Says Justice Department's E-Book Price-Fixing Remedy Is 'Draconian'
A New York federal judge has found that Apple colluded with major book publishers to inflate the price of e-books.
The Department of Justice brought the lawsuit in April 2012 and alleged that Apple had acted as the "hub" in a hub-and-spoke conspiracy to move the book industry from a "wholesale" model dominated by Amazon.com to an "agency" model where Apple and other e-retailers would take commissions. The result of the actions resulted in e-books being sold past the $9.99 price point that was regularly used by Amazon.
The big publishers settled the government's claims, leaving Apple to defend its own actions in a three-week trial last month.
In a ruling on Wednesday, U.S. District Judge Denise Cote said the government has proven its case.
"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," wrote Judge Cote said in a 160-page ruling. "Without Apple's orchestration of this conspiracy, it would not have succeeded as it did in the Spring of 2010."
More to come.