US District Judge Denise Cote found Apple guilty of conspiring with five different publishers to raise the price of eBooks on its competitors’ websites on Wednesday morning.
Based on the trial record, and for the reasons stated herein, this Court finds by a preponderance of the evidence that Apple conspired to restrain trade in violation of Section 1 of the Sherman Act and relevant state statutes to the extent those laws are congruent with Section 1.
The short
The trial was surprisingly short compared to other recent cases involving Apple, beginning on June 3rd of this year.
Following an investigation that began in April 2012, Apple was accused of conspiring with publishers to force other online eBook sellers to raise their prices of eBooks from $9.99 to $12.99.
Apple continues to deny the allegations despite the ruling and has plans to appeal. A spokesman for Apple even claimed that the iBook store was crucial in “breaking Amazon’s monopolistic grip on the publishing industry.”
A separate trial, yet to begin, will decide the severity of punishment to be directed at Apple.
The dirt
Among the evidence submitted were emails between the late Steve Jobs and James Murdoch of HaperCollins.
James,
Our proposal does set the upper limit for ebook retail pricing based on the hardcover price of each book. The reason we are doing this is that, with our experience selling a lot of content online, we simply don’t think the ebook market can be successful with pricing higher than $12.99 or $14.99. Heck, Amazon is selling these books at $9.99, and who knows, maybe they are right and we will fail even at $12.99. But we’re willing to try at the prices we’ve proposed. We are not willing to try at higher prices because we are pretty sure we’ll all fail.
As I see it, HC has the following choices:
1. Throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99.
2. Keep going with Amazon at $9.99. You will make a bit more money in the short term, but in the medium term Amazon will tell you they will be paying you 70% of $9.99. They have shareholders too.
3. Hold back your books from Amazon. Without a way for customers to buy your ebooks, they will steal them. This will be the start of piracy and once started there will be no stopping it. Trust me, I’ve seen this happen with my own eyes.
Maybe I’m missing something, but I don’t see any other alternatives. Do you?
Regards,
SteveVia the US Govt
So what do you think, is Apple guilty of conspiring to manipulate the market and, even if it is, does breaking Amazon’s ‘monopolistic’ hold on eBook sales justify Apple’s alleged actions?
Source: New York State District Court
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