Judge: Apple at Heart of Ebook Price Fixing Conspiracy

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U.S. District Court Judge Denise Cote denied a request from Apple and ebook publishers to dismiss a class action lawsuit accusing them of price fixing, and at the same time said that Apple and Steve Jobs were in the middle of the conspiracy.

“In short, Apple did not try to earn money off of eBooks by competing with other retailers in an open market,” Judge Cote said in her ruling, according to paidContent. “Rather, Apple accomplished this goal by [helping] the suppliers to collude, rather than to compete independently.”

Judge says Apple at heart of ebook price fixing conspiracyJudge says Apple at heart of ebook price fixing conspiracy

The ruling means a class action lawsuit against Apple and publishers can move forward, but is not a ruling against the defendants.

Apple and ebook publishers are also facing a lawsuit from the U.S. Department of Justice for the same matter. A DOJ investigation into price fixing led to a lawsuit against Apple, Simon & Schuster, Harper Collins, Penguin, and Hachette over collusion accusations related to moving to an agency pricing model for ebooks instead of the traditional retailer-set pricing model.

The DOJ, along with the class action lawsuit, claim that Apple and book publishers forced online retailers into the agency book pricing model. The agency model lets the publishers set book pricing instead of retailers, and the companies involved are said to have used that to drive up ebook prices.

Apple claims it did nothing wrong and said it is ready to move forward with a trial in the DOJ case. Macmillan and Penguin both claim, too, that they didn’t do anything wrong by switching to the agency pricing model.

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Comments

mactoid

?Rather, Apple accomplished this goal by [helping] the suppliers to collude, rather than to compete independently.? and “The ruling means a class action lawsuit against Apple and publishers can move forward, but is not a ruling against the defendants.”

Really? Not a ruling?  Kinda sounds like she’s made up her mind. OH..and she’s also poisoned the jury pool.  I think Apple needs to make this go away outside of court.

ilikeimac

Really? Not a ruling?

I was thinking the same thing. Sounds an awful lot like a ruling to me. Then again, IANAL.

geoduck

At the very least the judge has shown what appears to be a good deal of bias against the defense. I don’t believe it’s proper to call it a conspiracy until a court has found it to be a conspiracy. IMO she should recuse herself from the case.

MonkeyT

Having actually read the judges opinion, the characterization of it has a strong rebuke seems to be an editorial judgement.  It seems a rather standard decision regarding a motion to dismiss to me, a process which will always end in yes or no: very little opinionating involved.

Reading the details and arguments of the motion, while remembering what discussions were occurring in the mainstream and publishing trade press at the time of the alleged “conspiracy”, there seems to be little in the complaint that wasn’t openly discussed and argued publicly on all sides by those involved.  the only real smoking gun seems to be a summarization of the situation by Jobs in a unrelated interview (which he can’t rebut or explain in any way, being dead) and the seemingly unwise inclusion by Apple of a clause in the Agency Agreement that made publishers agree to not enter any more wholesale model agreements.  I would think that Apple wouldn’t care what other agreements the publishers entered into so long as Apple’s own “Most Favored Nation” status remained in force - MFN is not illegal, remember.  Its a common perk to powerful retailers in many different industries.  Amazon themselves enjoyed MFN at the time of the “conspiracy”.

http://gigaompaidcontent.files.wordpress.com/2012/05/ebook-order-on-mtd.pdf

It’s still astounding to me that an antitrust action is being pursued against a vendor whose direct competitor held 90% of the market at the point of contention.

ibuck

Isn’t it curious that Apple is seen by many as a monopolistic market wrecker now that it’s stock price has made it “the largest company in the world?” . Of course, that #1 ranking is in market capitalization: Apple was only #35 last year and #17 now in the Fortune 500. And this perception exists despite the fact that MOST of the PC’s, phones, smartphones, software, books, etc. sold these days are NOT SOLD by Apple and are NOT Apple products. Does the US Justice Dept lack the huevos to go after the big boys (Amazon?, Samsung?, etc).

OTOH, it seems that ebook prices should be lower, if you consider the lesser bundle of rights they offer compared with physical books, which easily can be loaned, resold, given away, and so on. If Apple has clearly flouted the law, then they must bear the consequences. But it certainly does not seem clear that they have. Not yet.

ibuck

It’s even curiouser that one of the plaintiffs in this case is a big law firm that shares the 1918 Eighth Avenue, Seattle skyscraper with Amazon.com. Bezos’ company reportedly occupies 2/3 of the bldg’s 658,744 sq ft, while law firm Hagens Berman Sobol Shapiro, leases 21,000 square feet.

netizen

I wonder what the opinion of this forum would be had the one colluding with the publishers been Amazon, with it’s goal being to keep Apple’s share of the ebook market from dominating had Apple had the 90% share of the ebook market?

:p

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