Apple Found Guilty Of eBooks Conspiracy

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A federal judge rules that Apple colluded with publishers to drive up the prices of ebooks

The five publishers charged in the case – Hachette Book Group, Macmillan, HarperCollins, Penguin Group and Simon & Schuster – all reached settlements with the federal government and the states involved. However, Apple officials decided to go to trial.

Aggressive Apple

Evidence in the trial painted an aggressive Apple whose executives first met with the publishers in mid-December 2009 and negotiated hard with the book companies to come up with a way to drive up ebook prices. Apple wanted to use the 2010 launch of the iPad as the vehicle for announcing its iBookstore, and wanted the online store to be well-stocked. They also wanted to ensure price parity, so that Apple wouldn’t need to compete with Amazon prices.

Apple logoBy 2009, Amazon sold 90 percent of all ebooks, giving it considerable sway on pricing in a market that Apple officials felt could grow to $1 billion (£660m) by 2010. Just over a month after the first meeting with publishers, Apple had all its agreements with them in place. In speaking with a reporter at the launch event for the iPad, then-Apple CEO Steve Jobs – who had bought an ebook for $14.99 to show the audience how easy it was – said that book prices at Apple and Amazon would be the same.

“Publishers are actually withholding their books from Amazon because they are not happy,” he told the reporter, according to the evidence.

The judge noted that Jobs’ statement was among a large amount of evidence regarding Apple’s role in the push to increase ebook prices.

“Working against its own internal deadline, Apple achieved for this industry in a matter of weeks what the Publisher Defendants had been unable to accomplish for months before Apple became their partner,” Cote said.

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Originally published on eWeek.

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