Breaking news: Apple have been found guilty of conspiring to fix the price of electronic books in a landmark case in New York City. The legal action is set to cost the Cupertino giants millions and could change the face of digital book publishing, reports Jamie Boyd.
Apple played a big part in the eBook revolution when their inspiration founder and then CEO, the late Steve Jobs lined up deals with some of the United States leading book publishers. Now, according to a court in New York City, it has transpired that Apple were fixing the prices of these eBooks in partnership with a number of those leading publishers. Apple, and the publishers motivation was to defeat the stanglehold held over the market by Amazon.com.
US District Judge Denise Cote ruled that Apple worked with publishers Lagardere, Hachette and Macmillan, HarperCollins, Penguin and Simon & Schuster in order to fix prices in order to try to eliminate competition. This practice clearly violates United States antitrust law, and in doing so, Apple may now have handed the initiative fully to Amazon. Cote revealed that due to Apple’s price-fixing, the cost of a $10 eBook rose to closer to $13.99 or even $14.99, representing a 40%-50% rise in real-term cost for the end consumer.
The district Judge has called for a damages trial, which could open up some extraordinary liability for Apple as it would be likely to lead to a barrage of claims. The announcement has led to an immediate fall in Apple’s share price.
“The plaintiffs have shown that the publisher defendants conspired with each other to eliminate retail price competition in order to raise e-book prices, and that Apple played a central role in facilitating and executing that conspiracy,” US District Judge Denise Cote
“Without Apple’s orchestration of this conspiracy, it would not have succeeded as it did in the spring of 2010.”
This trial only included Amazon, and did not include the five mentioned publishers. These publishers have already admitted their guilt and have settled out of court.
More to come.