US court agrees Apple violated antitrust law in e-book entry | TuscaloosaNews

Consequently Apple is expected to pay $450 million, mostly to ebook consumers, as part of an agreement with private plaintiffs and 33 states that had joined the USA Department of Justice’s suit.

When Apple entered the market with its own e-book line, the price of the product rose to $14.99 and the lawsuit filed in 2012 by the USA Department of Justice accused Apple and several publishing houses of forcing consumers to pay “tens of millions of dollars” more for its e-books. The decision rejects Apple’s appeal and upholds Judge Cote’s findings. Apple and five other publishers were involved in stifling Amazon.com, Inc.’s (NASDAQ:AMZN) influence in the space.

The appeals court also agreed that Judge Denise Cote (koht) was right to order injunctive relief to ensure the Cupertino, California-based company did not commit additional violations of antitrust laws. The ruling also had some potential in becoming a guidepost in deal-making surrounding content delivery.

But in a dissenting opinion on Tuesday, Judge Dennis Jacobs said Apple was correct.

“Fundamentally, the dissent’s theory — that the presence of a strong competitor justifies a horizontal price-fixing conspiracy — endorses a concept of marketplace vigilantism that is wholly foreign to the antitrust laws”, Livingston wrote.

At the time, publishers were dissatisfied with Amazon’s aggressive discounts.

Apple might have known about what would happen, it further argued, but it hardly could be blamed for a conspiracy if everyone was merely following their independent business interests. “Apple understood that its proposed Contracts were attractive to the Publisher Defendants only if they collectively shifted their relationships with Amazon to an agency model – which Apple knew would result in higher consumer‐facing ebook prices”.

“The district court didn’t err in concluding that Apple was more than an innocent bystander”, Livingston wrote. However, its entry into the streaming music market may be a harbinger of future antitrust woes, since the Attorneys General for New York and Connecticut are investigating the company’s practices in setting up Apple Music. “Its conduct was eminently reasonable; no one has suggested a viable alternative”.