Apple Facing Off with Justice Department Over Price Fixing of eBooks

Conspiring to Raise Prices? Lawsuit Opens Today
Conspiring to Raise Prices? Lawsuit Opens Today

Today Apple Inc is going to trial over accusations being made by state and federal authorities that they conspired with book publishers to increase the cost of eBooks to consumers.

The US Justice Department is taking the famously popular producer of iPads and iPhones to court in a case that observers say will scrutinize how Internet businesses interact with their suppliers of content.

“This case will effectively set the rules for Internet commerce,” said David Balto, a former policy director for the U.S. Federal Trade Commission.

The lawsuit was first filed against Apple along with five of the country’s six largest book publishers back in April, 2012. The suit alleges that they conspired to raise eBook prices in order to halt Amazon’s grip on book pricing.

Apple is on its own for the trial since all five publishers settled out of court by agreeing to halt their prohibitions on wholesale discounts in addition to paying together $164 million in damages for the benefit of consumers. The five publishers are: Pearson Plc’s Penguin Group, News Corp’s HarperCollins Publishers Inc, CBS Corp’s Simon & Schuster Inc, Hachette Book Group Inc and Macmillan.

The Justice Department is not pursuing monetary damages from Apple, but rather wants Apple to be forced to stop similar practices in the future. Apple is worried that if they are found guilty as charged they will then face separate trials by state attorneys general in which they will indeed by liable for monetary damages through class action lawsuits.
Apple’s chances of coming through the trial unscathed could be small, based on a comment made by the presiding judge at the last hearing before the trial.

“I believe that the government will be able to show at trial direct evidence that Apple knowingly participated in and facilitated a conspiracy to raise prices of e-books,” said U.S. District Judge Denise Cote on May 23. The judge will hear the case without a jury.
With the judge’s opinion before the trial apparently against Apple, why then isn’t the giant computer company settling out of court?

Chief Executive Tim Cook said in an interview with All Things Digital that Apple was “not going to sign something that says we did something we didn’t do.”

About Jonathon Bowes

Jonathan Bowes started his career in banking. After a few years, he took courses in business and finance and worked his way up the corporate ladder. Today, while writing part-time for Business District, Bowes assists talented people to find jobs in the field of economics. Contact Bowes at Jonathon[at]