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Apple e-book, warning to tech industry

Posted Jul 12 2013 1:12am

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The U.S. government’s victory over Apple in the e-books antitrust case sends a message to the tech industry, legal observers say: Even popular innovators can’t run roughshod over antitrust laws.

In a court in New York, Apple had argued unsuccessfully that it was the classic outsider trying to break into and enliven what it saw as a stagnant digital books market dominated by Amazon.com.

But on Wednesday, a federal judge in New York rejected that view and evoked an earlier era of robber barons and monopolies, ruling that Apple had orchestrated a “horizontal price-fixing conspiracy” with five major publishers that resulted in increased digital book prices for consumers.

The decision is “an important touchstone,” said Phil Weiser, dean of the University of Colorado Law School and a former deputy assistant attorney general in the Justice Department’s antitrust division. “At times, tech companies want to take the position that they are a fast-moving industry and antitrust law is not an effective means of oversight. There is no technology industry exception.”

Apple immediately vowed to appeal the decision.

“Apple did not conspire to fix e-book pricing, and we will continue to fight against these false accusations,” said an Apple spokesman. “When we introduced the iBookstore in 2010, we gave customers more choice, injecting much-needed innovation and competition into the market, breaking Amazon’s monopolistic grip on the publishing industry.”

U.S. District Judge Denise Cote, in siding with the DOJ, found the price fixing wouldn’t have succeeded “without the active facilitation and encouragement of Apple.” The judge will order a trial on damages in a parallel complaint brought by 33 state attorneys general.

 

 

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