Following a lengthy trial, Apple was found guilty of conspiring with five different book publishers to raise the price of eBooks on Amazon and other online retailers, U.S District Judge Denise Cote ruled on Wednesday morning. How much the company has to pay has yet to be decided.
In her ruling, Judge Cote states that Apple artificially inflated the market through illegal means in an effort to drive its competitors’ prices up:
The question in this case has always been a narrow one: whether Apple participated in a price-fixing scheme in violation of this country’s antitrust laws. Apple is liable here for facilitating and encouraging the Publisher Defendants’ collective, illegal restraint of trade. Through their conspiracy they forced Amazon (and other resellers) to relinquish retail pricing authority and then they raised retail e-book prices. Those higher prices were not the result of regular market forces but of a scheme in which Apple was a full participant.
The investigation, which may prove to be a landmark case for the eBook industry, began in April 2012 when the U.S. Justice Department filed a complaint against Apple, following claims that the company colluded with publishers to drive up eBook prices in order to maximize profits. The non-jury trial began on June 3.
A series of emails, depositions and testimonies recorded by the court since then have now proved that Apple did in fact conspire with a number of book publishers to force other online retailers to raise the price of eBooks from the standard $9.99 to at least $12.99. The trial also revealed that Apple SVP Eddy Cue began to study the eBook market even before the first iPad was released. In May, the antitrust charges were linked all the way to the top of Apple’s corporate structure when a series of emails written by former CEO Steve Jobs to Harper Collins that were brought forward as evidence.
A separate trial will be held at a later date to determine what damages Apple will need to pay. Apple spokesman Tom Neumayr told AllThingsD that the company will appeal the ruling and added, “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.”