denise-cote-decoder-judge-apple

Update: Apple provided a comment to AllThingsD and confirmed it will appeal the decision:

“Apple did not conspire to fix ebook pricing and we will continue to fight against these false accusations. 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.”

Reuters reports that a judge just ruled that Apple conspired to raise the retail prices of e-books and said a trial for damages will soon follow:

The decision by U.S. District Judge Denise Cote[pictured, right] in Manhattan is a victory for the U.S. government and various states, which the judge said are entitled to injunctive relief. The publishers have already settled with the federal government on e-book pricing. Cote ruled after a non-jury trial that ended on June 20.

Apple warned that a guilty verdict in its e-book price-fixing case could have a negative impact on how digital media deals are negotiated in the US and Apple CEO Tim Cook even called the suit ‘bizarre’:

The e-book case to me is bizarre. We’ve done nothing wrong there, and so we’re taking a very principled position. … We’re not going to sign something that says we did something we didn’t do. … So we’re going to fight.

The DOJ had argued that Apple had conspired to raise prices with all of the publishers and hurt rival Amazon.

Interestingly, according to the NYTimes, one of the most damning pieces of evidence in the government’s case is the video below of Steve Jobs talking with Walt Mossberg. Per Daring Fireball: Mossberg asks Jobs why someone would buy a book for $14.99 from the iBookstore when they could buy the same book from Amazon for $9.99.

Jobs: Well, that won’t be the case.

Mossberg: Meaning you won’t be $14.99, or they won’t be $9.99?

Jobs (smiling): The prices will be the same.

It was alleged that Jobs wrote to five major publishers - HarperCollins, Penguin, Simon & Schuster, and Macmillan – and invited them to switch to the new model, and the DOJ seems to have had some pretty compelling evidence of this, including an email from Steve Jobs to James Murdoch, a senior exec at the parent company of HarperCollins:

Throw in with Apple and see if we can all make a go of this to create a real mainstream e-books market at $12.99 and $14.99.

Jobs appeared to confirm the story in a comment to his biographer Walter Isaacson, saying that he told the publishers:

We’ll go to the agency model, where you set the price, and we get our 30 percent, and yes, the customer pays a little more, but that’s what you want anyway.

US District Judge Denise Coote even took the unusual step of announcing that she believed that the DOJ would be able to prove its case.

Yet Apple seemed confident it can win a case which it describes as based solely on hearsay.

“We strongly disagree with the court’s preliminary statements about the case,” Orin Snyder, Apple’s lead lawyer in the case, said yesterday in an e-mailed statement. “The court made clear that this was not a final ruling and that the evidence at trial will determine the verdict. This is what a trial is for.”

So it goes.

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