Apple Inc. e-Books Price Fixing Trial: Apple Files Appeal to 'Radical' Ruling by District Court Judge
Apple Inc.'s presence in court continued with the iPhone company requesting the U.S. Court of Appeals for the Second Circuit to throw out a judge's "radical" ruling.
According to Apple, U.S. District Judge Denise Cote in New York had ruled the Cupertino-based company of violating antitrust law by manipulating electronic book prices. She noted Apple blamed publishers of price conspiracy and did nothing about it.
The case dates back to April 2012 when the U.S. Department of Justice sued Apple and five publishers -- Hachette, HarperCollins, Macmillan, Penguin, and Simon & Schuster -- on fixing e-book prices. The five publishers settled with the DOJ and paid $164 million to reimburse consumers. Apple, however, went on to battle the DOJ's allegations.
The DOJ stated Apple conspired with the publishers to increase e-books prices from $9.99 to either $12.99 or $14.99 on Amazon.com.
"Apple set out to impose a new distribution model on e-books, a so-called agency model, under which [Hachette Book Group, HarperCollins, Holtzbrinck Publishers, and Simon & Schuster] could set their higher consumer prices and then hand over the extra revenues to Apple," the DOJ stated.
"Apple did not conspire to fix e-book pricing and we will continue to fight against these false accusations," said an Apple spokesman in a statement in July 2013. "When we introduced the iBookstore in 2010, we gave customers more choice, injecting much needed innovation and competition into the market, breaking Amazon's monopolistic grip on the publishing industry. We've done nothing wrong and we will appeal the judge's decision."
In the end, Apple lost the trial.
Apple filed for the U.S. appeals court to reverse Judge Cote's ruling or select a new judge to hear the case.
"Apple had no knowledge that the publishers were engaged in a conspiracy in December 2009 or at any other point," wrote Apple. "The district court's own findings show that Apple offered a retail business model to the publishers that was in Apple's independent business interests and was attractive to the publishers, who were frustrated with Amazon. And it was not unlawful for Apple to take advantage of retail market discord by using lawful agency agreements to enter the market and compete with Amazon."
Apple believed the district court's decision was based on "fundamentally incorrect theory of antitrust liability." Apple further noted there was no evidence it reached an agreement with any of the five publishers.
Apple, in the ruling to the appeals court, admits it had "important and valid reasons" to discuss prices at retail value with publishers due to the e-books market being dominated by a "single retailer." The iPad company insisted it had to ensure it could be both competitive and profitable in the market.
Apple's Appeal Filing:
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