Apple Faces Uphill Battle as Price-Fixing Trial Begins

Judge expects 'direct evidence' of 'conspiracy'

By Matt Cantor,  Newser Staff

Posted Jun 3, 2013 6:48 AM CDT

(Newser) – Apple's federal court battle over e-book price fixing begins today, and the company has a tough case to make, observes the Wall Street Journal. The government's claim: Apple made deals with five publishers to boost the prices of e-books before the iPad's 2010 launch. "Stripped of the glitz surrounding e-books and Apple, this is an unremarkable and obvious price-fixing case," say Justice Department lawyers. Indeed, the presiding judge has already said she expects to see "direct evidence that Apple knowingly participated in and facilitated a conspiracy" over prices.

The Justice Department holds that Apple sought to provide a boost for publishers by going with the "agency" sales model, which lets publishers, rather than retailers, set book prices; Apple, the government says, was a mediator between the companies, keeping each abreast of the others' decisions. Interestingly, Steve Jobs' biography may play a role in the case: He's quoted as saying, "We'll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more." The five publishers involved have already ended their agreements with Apple and settled the case with the government. If the court rules in the government's favor, it could mean more lawsuits from states and perhaps private groups, the Journal notes.

A customer reads a book on an iPad tablet computer at an Apple store in central in Barcelona, Spain, Friday, May 28, 2010.
A customer reads a book on an iPad tablet computer at an Apple store in central in Barcelona, Spain, Friday, May 28, 2010.   (AP Photo/Manu Fernandez)
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