A federal judge in the US has found the world’s wealthiest company Apple guilty of violating antitrust law in a case on price-fixing. The judge concluded that Apple was liable for ‘facilitating and encouraging’ a collective effort by the publishers to end price competition for ebooks.
The trial focused on a period shortly before the launch of the iPad in late 2009 early 2010 when the majority of ebooks sold worldwide were through Amazon. Amazon held agreements with a number of publishers which allowed the company to set its own prices on ebooks. Publishers were unhappy with many of the prices set by Amazon, especially the low $9.99 price tag on bestsellers.
Over a 6 week period, Apple negotiated contracts with publishers ahead of the iPad launch which proposed a new business model whereby the publisher could set the price they wanted to sell the book at, while Apple received 30 per cent of the revenue from the sale. Evidence in the trial showed that several publishers threatened to withhold books from Amazon unless they also made the shift to this model, essentially wiping out competition in the marketplace. Five publishers were originally named in the US government’s civil lawsuit, but each one of them settled the case, leaving Apple to fight the trial alone.
Apple rejected the decision of the court and said it would appeal the findings.