price-fixing Stories July 10, 2013

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.

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price-fixing Stories June 20, 2013

Apple & DOJ submit closing arguments as e-book price fixing trial comes to a close

After a three week debate between Apple and the U.S. Department of Justice, the controversial e-book price-fixing case concluded today with final summations at the U.S. District Court in Manhattan. As part of its last remarks, Apple presented a 136-slide deck describing its case against the DOJ in full detail underscoring its argument that they did not conspire with publishers to illegally fix e-book prices.

On the other side of the argument, the DOJ argues that Apple was the “ringmaster” of a plot to raise mainstream e-book pricing above Amazon’s pre-established $9.99 price point by moving the industry from a wholesale model to an agency model. In the proposed model, Apple granted retailers the ability to set prices much like Apple’s App Store. Like Apple, the DOJ provided a deck explaining their point of view. Both decks can be viewed below.

U.S. District Judge Denise Cote is expected to rule on the case in the coming weeks.

price-fixing Stories May 24, 2013

Judge in Apple eBook case says U.S. government has evidence to prove pricing conspiracy ahead of trial

Earlier this month we heard that Apple submitted to the courts that it engaged in “contentious negotiations”– and not a pricing conspiracy– at a time when publishers were already considering methods of getting Amazon to increase pricing. According to the latest comments from a judge in the high-profile eBook pricing case, Apple might not be able to prove its case when it goes to trial early next month.

U.S. District Judge Denise Cote believes that the U.S Justice Department will indeed be able to prove a pricing conspiracy took place (via Bloomberg):

“I believe that the government will be able to show at trial direct evidence that Apple knowingly participated in and facilitated a conspiracy to raise prices of e-books, and that the circumstantial evidence in this case, including the terms of the agreements, will confirm that,” U.S. District Judge Denise Cote in Manhattan said yesterday.

“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.”

price-fixing Stories May 22, 2013

Penguin agrees to pay $75 million in consumer damages following eBook price fixing case

We already knew back in December that Pearson, along with a handful of other publishers had decided to settle with the U.S. Department of Justice in the high-profile Apple ebook price-fixing case. Today a statement from Peason’s Penguin unit confirms that it has now also reached an agreement that will see the publisher pay $75 million in consumer damages to the US State Attorneys General on behalf of people that were overcharged due to the alleged price fixing:

Penguin has reached a comprehensive agreement with the US State Attorneys General and private class plaintiffs to pay $75 million in consumer damages plus costs and fees to resolve all antitrust claims relating to eBook pricing.  Penguin has also committed to the State Attorneys General to abide by the same injunctive relief as previously agreed in a separate settlement with the Department of Justice.

In anticipation of reaching this agreement, Pearson had made a $40m provision for settlement in its 2012 accounts. An incremental charge will be expensed in Pearson’s 2013 statutory accounts as part of the accounting for the Penguin Random House joint-venture.

price-fixing Stories May 15, 2013

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In the ongoing e-book price fixing case with the Department of Justice, in which Apple is accused of conspiring with publishers to fix eBook pricing and cut out Amazon, Apple has again responded to the DOJ’s claims detailing the “tough negotiations” it went through with publishers. To further prove its point that it was not colluding with publishers to fix e-book pricing, Apple said it “one-on-one” and “contentious negotiations” at a time when publishers were already considering methods of getting Amazon to increase pricing: expand full story

price-fixing Stories March 22, 2013

Apple may face an anti-trust investigation in Europe over its iPhone contracts with carriers as it defends itself against separate investigations for alleged price gouging in Australia.

Apple was informed last year that it would be required to attend a hearing by Australia’s Standing Committee on Infrastructure and Communications to explain why its pricing of digital content was higher in Australia than in the United States. The hearing is now underway, as reported by the Sydney Morning Herald, with Apple asked to explain why content sold through iTunes is marked up between 30 and 70 percent higher than in the U.S. Apple is blaming wholesale pricing agreements in the country.

“The pricing of this digital content is based on the wholesale prices which are set through negotiated contracts with the record labels, movie studios and TV networks,” said Mr King, who is Apple’s vice president for Australia, New Zealand and South Asia.

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