Apple e-books trial opens
03 Jun 2013
Trial opens today over allegations by federal and state authorities that Apple conspired with publishers to increase the price of e-books.
The trial would see the popular iPad and iPhone maker lock horns with the US justice department in a case that is expected to break new ground in the interaction of internet retailers with content providers.
According to David Balto, a former policy director for the US Federal Trade Commission, the case would effectively set the rules for internet commerce.
The justice department moved court against Apple as also five of the six largest US book publishers in April 2012, in a lawsuit accusing the publishers of conspiring to increase e-book prices and break Amazon.com Inc's hold on pricing.
Meanwhile, Apple remains the sole defendant following, Pearson Plc's Penguin Group, News Corp's HarperCollins Publishers Inc, CBS Corp's Simon & Schuster Inc, Hachette Book Group Inc and MacMillan agreeing to eliminate prohibitions on wholesale discounts and paying a collective $164 million to benefit consumers.
The US government would not be seeking damages but instead an order blocking Apple from engaging in similar conduct. However, a verdict against Apple, could see it face damages in a separate trial by the state attorneys general and consumers pursuing class actions.
US officials allege Apple was the "ringmaster" of a conspiracy to raise prices of electronic books, orchestrating a collusive shakeup of the ebook business in early 2010 that resulted in higher prices.
Apple is expected to take the position that its actions shook up a sector that had been dominated by Amazon, boosting competition and improving conditions for consumers.
According to commentators, Apple, which is already finding the going tough amid a slowdown in new product launches and allegations of avoiding taxes to the tune of billions of dollars, could have a hard battle on its hands.
Apple chief executive Tim Cook rejected outright any prospect of a settlement as it would call for the company to sign an admission of wrongdoing.
"We didn't do anything wrong there," Cook told a recent California conference. "We're going to fight."
The largest settlement was with Penguin for $75 million, while Hachette, Harper Collins and Simon & Schuster settled for $69 million, which would be refunded to consumers while Macmillan settled for $26 million.
According to analysts, the case for Apple was not so much about money rather it was about upholding its stellar reputation and deciding its own business practices.
