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

By The Associated Press on June 30, 2015.

By a 2-1 vote, the 2nd USA Circuit Court of Appeals agreed with a lower court judge that the conspiracy violated federal antitrust law, and that the judge acted properly in imposing an injunction to prevent a recurrence.

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.

“Apple didn’t conspire to fix ebook pricing and this ruling does nothing to change the facts”, Apple said in a statement.

“While we want to put this behind us, the case is about principles and values”, Apple said. “We know we did nothing wrong back in 2010 and are assessing next steps”.

SEATTLE-(Business Wire)-Hagens Berman attorneys representing a class of e-book purchasers announced today that the Second Circuit has affirmed a District Court ruling, bringing consumers one step closer to a proposed $450 million settlement with Apple (NASDAQ: AAPL) for its role in an alleged e-book price-fixing scheme with five of the nation’s largest publishing companies.

At the time, Amazon held a dominant position in this market, and often sold e-books for $9.99, even when it was buying them wholesale from publishers for more than that. “Apple was a major potential competitor in a market dominated by a 90 percent monopoly, and was justifiably unwilling to enter a market on terms that would assure a loss on sales or exact a toll on its reputation”, the 38-page dissent states.

“A further and pervasive error (by the district court and by my colleagues on this appeal) is the implicit assumption that competition should be genteel, lawyer designed, and fair under sporting rules, and that antitrust law is offended by gloves-off competition”.

The publishers that the Justice Department said conspired with Apple include Lagardere SCA’s Hachette Book Group Inc, News Corp’s HarperCollins Publishers LLC, Penguin Group Inc, CBS Corp’s Simon & Schuster Inc and Verlagsgruppe Georg von Holtzbrinck GmbH’s Macmillan. Judge Raymond Lohier joined in most of the decision but appeared to sympathize with Apple’s motivations in a separate concurring opinion that laid some of the blame for its behavior at the feet of the settling publishers.

As a result of the ruling, Apple is on the hook to pay consumers $400 million as part of a settlement the company reached with a class of e-book buyers and 33 state attorneys general.