Apple loses e-book antitrust case

Photo(James Hood @ Consumer Affairs) A U.S. District Court judge has ruled against Apple, finding it liable for violating the antitrust laws by conspiring with major U.S. publishers to fix the prices of electronic books. A Seattle attorney representing consumers in a class-action lawsuit said the court's ruling should hasten the progress of the consumer case. 

That case, filed on Aug. 9, 2011, seeks damages for millions of e-book purchasers to compensate them for higher e-book prices resulting from Apple and the publishers’ alleged price-fixing scheme. 

“Judge [Denise] Cote ruled definitively that Apple was guilty of conspiring to fix prices for e-books, and we believe this ruling is binding on the consumer case, meaning we do not need to again prove Apple’s culpability in the price-fixing scheme,” attorney Steve Berman said. “Once we receive class certification, the only issue that will remain is for a jury to assess damages, which under federal law are trebled, or tripled.”

Three-week trial 

The judge’s opinion comes after a three-week bench trial in the United States District Court for the Southern District of New York that ended June 20. The court found the federal and state government plaintiffs demonstrated that five major publishers “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.” 

“The publishers and Apple manipulated the marketplace by artificially increasing prices,” said Delaware Attorney General Beau Biden said, one of 33 state AGs joining in the action. “As confirmed by the Court today, that is against the law and it is wrong.”

PhotoThe court’s order and opinion only addressed the issue of Apple’s liability under federal and state antitrust law. Issues involving damages and other remedies are still to be decided. 

The publishers -- Hachette Book Group Inc.; Harper Collins Publishers L.L.C.; Simon & Schuster Inc.; Holtzbrinck Publishers LLC d/b/a/ Macmillan; and Penguin Group (USA), Inc. -- had settled lawsuits filed by states and others against them prior to trial, which will result in consumers nationwide receiving more than $166 million in compensation provided the court approves all of the settlements.

"Masterfully prosecuted"

Berman said the ruling didn't surprise him.

“When we filed the original consumer case, we were certain that e-book purchasers across the country were victims of a well-organized price-fixing scheme organized largely by Apple,” said Berman. “We were heartened when the Department of Justice and the states filed their own anti-trust cases. Those cases were masterfully prosecuted, culminating in today’s ruling.”