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DOJ and Apple square off over alleged e-book price-fixing scheme

Apple is accused of colluding with several publishers to fix the price of e-books in the US. 

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Reuters
Umbrellas are seen in front of the Apple store on Fifth Avenue in New York, on May 19, 2013. Apple and lawyers for the US government square off in a New York court today over charges that Apple attempted to fix the price of e-books in 2010.
  • By Matthew Shaer

On Monday morning, lawyers for Apple and the US government squared off in an NYC courtroom for the first day of what is expected to be a multi-week trial over alleged e-book price fixing.

Out of the loop? Here's your 30-second primer: The government is accusing Apple, which entered the e-book market in 2010, of conspiring with five publishers to raise the standard price of e-books from $9.99 (the price point endorsed by Amazon) to somewhere between 13 and 15 bucks. The five publishers – Hachette, HarperCollins, Simon & Schuster, Macmillan, and Penguin – subsequently settled with the DOJ. 

Apple has vowed to battle on. In fact, as recently as last week, at the D11 conference in Rancho Palos Verdes, Calif., Apple CEO Tim Cook said the Cupertino company never even entertained the possibility of negotiating a settlement. "We're not going to sign something that says we did something that we didn't do, so we're going to fight," Cook said, according to CNET. 

Presiding over the case is US District Judge Denise Cote, who will decide whether Apple did fall afoul of antitrust laws. (The matter will be settled by a bench trial, not by a jury.) Among the evidence she'll consider is remarks by former Apple CEO Steve Jobs and e-mails between Mr. Jobs and James Murdoch, an exec at News Corp, the parent company of HarperCollins. 

"Apple's conduct cannot be excused," Lawrence Buterman, a lawyer for the DOJ, said today. "Consumers in this country paid hundreds of millions of dollars more for e-books than they would have."

So let's say Apple does lose the trial – what happens next? Well, as Joshua Brustein of Businessweek notes, the company isn't facing any monetary penalties. However, "if it loses here it’ll likely face similar lawsuits elsewhere," he writes. "And amid the controversy surrounding the company’s tax avoidance strategies, a federal judgment sounding off on its anticompetitive behavior would be another ding."

For more tech news, follow us on Twitter @venturenaut.

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