Apple Denied Stay in Ebook Antitrust Damages Trial

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Apple antitrust damages hearing gets to move forwardApple's efforts to stop 33 states from seeking damages over antitrust claims fell short on Thursday when a Federal Appeals Court ruled the case can move forward. The states are asking for what could amount to over US$800 million for Apple's involvement in what the court deemed was a conspiracy with publishers to artificially raise the price of books.

The iPhone and iPad maker requested the stay because a separate appeal is underway to determine whether or not the case should have been granted class action status. The Appeals Court ruled there wasn't any reason to halt proceeding while awaiting the outcome of the appeals process, according to CNET.

The class action case from the states followed a Federal from the Department of Justice accusing Apple of antitrust violations. The DOJ argued Apple colluded with book publishers to force prices up, while Apple said it was negotiating independent deals with the companies and trying to break Amazon's monopoly on the market. Judge Denise Cote ruled Apple had orchestrated a price fixing conspiracy, and placed a monitor in the company to watch over future contract negotiations.

Five book publishers were named in that case, too, but all settled out of court to avoid potentially crippling fines. Apple continues to maintain that it did nothing wrong, and that there never was a conspiracy.

Judge Cote is also presiding over the trial from the states, and denied Apple's motion to dismiss the case. With the Appeals Court ruling in now in place, the case can continue to move forward.

The ruling in the antitrust case against Apple and the publishers effectively gave Amazon control over the book market, and the results are already visible. Amazon has been essentially bullying publishers to lower prices even more, which amounts to a losing proposition for them since Amazon already sells many titles below cost.

Hachette is Amazon's current target. The online retailer has raised prices for the publishers books, stopped offering pre-orders for many titles, and is even listing some titles as unavailable in an effort to get what it wants.

After Amazon's tactics started getting coverage in the mainstream press, the company went on the defensive and issued a statement justifying its actions as standard business practices and in the best interest of consumers. So far, Hachette is standing its ground.

The trial for the states is set to start on July 14. Apple has not commented on the Appeals Court ruling.

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Considering how often Apple's arguments in front of Judge Cote have fallen of deaf ears, it seems likely the states will be awarded a hefty sum in damages. Of course, Apple will appeal, so this case will continue to play out for a very long time. In the end, Amazon is still the big winner because the DOJ and Federal Courts have all but given the company a formal endorsement for its tactics.

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Lee Dronick

When it goes to appeal it won’t be in front of Judge Cote.


One judge has made all these decisions? One ?!

I’d like to know more about Judge Cote’s background and about Amazon’s political contributions, because something about this doesn’t smell right.


The appeal will not be heard by Judge Cote but by Judges at the next level up.

It would be sweet if, in addition to pursuing Apple for raising the prices of ebooks, DoJ also went after Amazon. I’m not holding my breath but this certainly is possible. Amazon has already driven several competitors out of the market and someone at DoJ might be getting nervous about his/her future career.

Lee Dronick

  The appeal will not be heard by Judge Cote but by Judges at the next level up.

Judge Reinhold would be on the next level up smile

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