Apple wants trial to defend e-book price-fixing allegations

Apple Inc wants to go to trial to defend itself against U.S. government allegations that it conspired with publishers to raise prices of electronic books, a lawyer for the Silicon Valley giant said in court on Wednesday

By - April 19, 2012
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Apple Inc wants to go to trial to defend itself against U.S. government allegations that it conspired with publishers to raise prices of electronic books, a lawyer for the Silicon Valley giant said in court on Wednesday.

Two publishers took a similar stance in the first hearing in Manhattan federal court since the anti-trust division of the Department of Justice last week accused Apple and five publishers of colluding to break up Amazon.com’s low-cost dominance of the digital book market.

The publishers are Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH, and Pearson Plc’s Penguin Group.

“Our basic view is that we would like the case to be decided on the merits,” Apple lawyer, Daniel Floyd, told U.S. District Judge Denise Cote. “We believe that this is not an appropriate case against us and we would like to validate that.”

The judge scheduled the next hearing for June 22.

The court also heard that 15 U.S. states and the Commonwealth of Puerto Rico were in settlement talks with the three publishers. If all 50 states were ultimately to settle, it would have an impact on a separate class action brought by consumers, a HarperCollins lawyer, Shepard Goldfein, told the judge.

“There could be something left of the class, or nothing left of the class,” Goldfein said.

The government said the price-fixing took place in early 2010 as Apple was introducing its iPad.

E-book prices went up an average of $2 to $3 in a three-day period in early 2010, according to the complaint.

The settlement with three publishers will allow Amazon to resume discounting books, and will terminate the “most favored nation” contracts with Apple.

News Corp owns HarperCollins Publishers Inc, CBS Corp owns Simon & Schuster Inc and Hachette Book Group is a subsidiary of Lagardere SCA.

Hachette and HarperCollins also settled with a group of U.S. states, agreeing to pay $51 million in restitution to consumers who bought e-books. Simon & Schuster is in negotiations with the states to join that settlement, a lawyer for the company said in court on Wednesday.

The European Commission is also probing Apple and publishers in a similar antitrust probe. It said on Wednesday that it had received settlement proposals from Apple and four publishers – Simon & Schuster, Harper Collins, Hachette Livre and Macmillan’s parent.

The case is USA v Apple Inc et al in U.S. District Court for the Southern District of New York, No. 12-2826 and No. 11-md-02293.

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