Judge: Apple conspired to fix e-books prices

Judge rules that Apple orchestrated a conspiracy to cut out e-book competition and raise prices, handing the U.S. government a big win and smacking Apple with a verdict it said could put a chill on media deals.

Apple violated antitrust laws, according to a quick decision by the Southern District of New York in the U.S. government's e-book price-fixing case against the computing giant.

"Without Apple's orchestration of this conspiracy, it would not have succeeded as it did," Judge Denise Cote said in a 160-page opinion issued Wednesday.

Cote said the U.S. Justice Department showed in the trial that publishers conspired with each other to eliminate price competition for e-books and that Apple played a central role in that conspiracy. A trial for damages against Apple will follow, though Apple spokesman Tom Neumayr said his company would appeal the verdict.

Apple did nothing wrong and will continue to fight "these false accusations," Neumayr said in a statement. The iBookstore increased customer choice when it launched in 2010, injecting more competition and "breaking Amazon's monopolistic grip on the publishing industry," he said.

Assistant Attorney General Bill Baer, the antitrust head at the Justice Department, called the decision a victory for millions of people who read books digitally. "This decision by the court is a critical step in undoing the harm caused by Apple's illegal actions," he said in a statement.

Only Apple proceeded to trial, which ended June 20 and was expected to be ruled on about two months later. Publishers Hachette Book Group, HarperCollins, Holtzbrinck, Penguin Group and Simon & Schuster settled their claims with the U.S. and a number of states. (Simon & Schuster, like CNET, is a part of CBS Corp.)

The U.S. Department of Justice, which initially sued Apple and a handful of the nation's largest publishers last year, said Apple and the publishers had two objectives when making their deals: raise e-book prices and restrain retail price competition to hurt Amazon.

Apple rejected the charges, saying that it did nothing wrong and that the verdict could hurt the way digital media deals are negotiated.

During the trial, a high-level Apple executive, Eddy Cue, acknowledged that the company's deal with publishers caused some e-book prices to rise.

"There is, at the end of the day, very little dispute about many of the most material facts in this case," Cote wrote in her ruling.

(Via Reuters.)

Updated: At 7:02 a.m. PT to include details from ruling, at 7:20 a.m. PT with Justice Department statement and at 7:50 a.m. PT with Apple's statement.

CNET's Shara Tibken contributed to this report.

 

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