A US Federal Judge claims that Apple is guilty of conspiring with publishing industry insiders to fix the price of eBooks sold in its online store. District Judge Denise Cote, acting on an anti-trust lawsuit initiated by the Department of Justice, claims that the technology company played a ‘central role’ in the cartel-like pricing conspiracy.
Apple is accused of conspiring with several leading publishers, including Harper Collins Publishers LLC, Macmillan, and Penguin Group. Several publishers that are accused of conspiring with Apple have settled with the Department of Justice in preparation for the trial.
As the publishers involved in the scandal make up the bulk of the United States’ publishing industry, the case is seen as an important event for the industry. The companies are accused of eliminating competition from retail book sales to raise eBook pricing, which would allow Apple to compete with cheaper Amazon.com.
Amazon’s average eBook pricing has long been $9.99 – a figure that Apple feared would reduce the profitability of the company’s iBookstore application. The eBook reading app was launched alongside the iPad in 2010, based on Apple’s promise to invest heavily in eBook promotion if it could be guaranteed better pricing.
The company allegedly recommended that publishers price their work at $12.99, and later $14.99, in order to reduce Amazon.com’s ability to market its products at lower prices. The conspiracy reportedly took place in private dining rooms across New York City, where the groups would meet on a regular basis.
Attorneys reportedly were not present at any of the meetings, which included some of the publishing industry’s biggest names. Apple claims that it did not conspire with publishing companies to fix the price of eBooks, and that it will appeal the decision to protect its business and customers.
