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Policy

Dead STEVE JOBS was a CROOK - judge

Fruity firm ruled guilty of fixing ebook prices in 2010

   Brid-Aine Parnell Wed 10 Jul 2013 // 15:27 UTC
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     __________________________________________________________________

   A US judge has found Apple guilty of conspiring with major publishers
   to fix the price of ebooks and has called for a trial on damages.

   District Judge Denise Cote stayed true to her initial impressions of
   the case, and ruled that Apple had colluded with Macmillan, Hachette,
   Penguin, HarperCollins and Simon & Schuster on digital tome prices when
   it entered the ebook market with its iPads in 2010.

   At the time, Apple - led by its co-founder Steve Jobs who died in 2011
   - was competing with tech juggernaut Amazon. The fruity firm's price
   fixing pushed up costs for readers, and was its attempt to eliminate
   its rival from the market, the judge said in the ruling.

   The beak said:

     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. Without Apple's
     orchestration of this conspiracy, it would not have succeeded as it
     did in the Spring of 2010.

   The fruity firm now faces a trial on damages from various states, which
   the judge has said are entitled to injunctive relief.

   All five publishers settled the case brought by the US Department of
   Justice before the trial, leaving only Apple alone in the dock to face
   charges stemming from the company's agency contracts with the
   bookhouses.

   Before Apple came along, the ebook market was run in the same way as
   the ink-and-paper book market, where books were sold at a wholesale
   price and sellers then decided what price to charge consumers for them.
   Under this model, Amazon was steadily lowering the price of ebooks,
   choosing to sell them below cost price in order to shift its Kindle
   ereaders and establish dominance in the market.

   Under the agency model, publishers decided the price of ebooks and
   sellers took a 30 per cent cut of that price. Moving to the model gave
   the bookhouses the ability to set prices, while most-favoured-nation
   clauses - which stopped them offering a better price to sellers than
   they'd given Apple - further homogenised prices.

   Apple has always contended that being brought to court on antitrust
   charges was somewhat ridiculous, since its entry into the market helped
   to ease off Amazon's fast-developing stranglehold on the market.
   However, Judge Cote rejected that argument.

   "This trial has not been the occasion to decide whether Amazon's choice
   to sell NYT Bestsellers or other New Releases as loss leaders was an
   unfair trade practice or in any other way a violation of law," she
   said. "If it was, however, the remedy for illegal conduct is a
   complaint lodged with the proper law enforcement offices or a civil
   suit or both.

   "Another company's alleged violation of antitrust laws is not an excuse
   for engaging in your own violations of law. Nor is suspicion that that
   may be occurring a defence to the claims litigated at this trial."

   Apple had not responded to a request for comment at the time of
   publication, but the DoJ said in a statement that the result was "a
   victory for millions of consumers".

   "After carefully weighing the evidence, the court agreed with the
   Justice Department and 33 state attorneys general that executives at
   the highest levels of Apple orchestrated a conspiracy with five major
   publishers to raise e-book prices," the assistant attorney general in
   charge of the DoJ's antitrust division, Bill Baer, said.

   "Through today's court decision and previous settlements with five
   major publishers, consumers are again benefiting from retail price
   competition and paying less for their ebooks." (R)

Bootnote

   Apple has reportedly declared its intention to appeal against the
   guilty verdict.
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