Apple Denies Fixing e-Book Pricing
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KIMIHIRO HOSHINO/AFP/Getty Images(NEW YORK) — Apple has begun its official fight against the U.S. Justice Department, which has alleged that the iPhone and iPad maker along with five major publishers raised and fixed the price of e-books.
In a trial that began Monday in New York City, Apple defended its case, while the government showed mounds of evidence that the company had collaborated with publishers to raise the price of e-books before the launch of the iPad and Apple’s iBookstore in 2010.
“Apple’s conduct cannot be excused,” Justice Department attorney Lawrence Buterman argued on Monday. “Consumers in this country paid hundreds of millions of dollars more for e-books than they would have.”
In April 2012 the Justice Department filed an antitrust lawsuit against Apple, Simon & Schuster, HarperCollins, MacMillan, Hachette and Pearson over allegations that Apple and the publishers agreed to fix the price of e-books, raising prices above Amazon’s average of $9.99.
While the publishers have settled with the Department of Justice and paid millions in independent settlements, Apple has said it refuses to admit it has done something wrong, when it doesn’t believe it has.
“We have done nothing wrong there so we are taking a very principled position on this,” Apple CEO Tim Cook said of the case at the All Things D conference last week. “We were asked to sign something that says we did do something, we’re not going to sign something that says something we didn’t do. So we’re going to fight.”
During its opening statement, the Department of Justice gave an 80-page presentation, which consisted of e-mails and diagrams showing the communication between Apple and the publishers and amongst the publishers themselves.
“Hachette, is unhappy with $9.99 price point,” Apple’s senior vice president of Internet Software and Services Eddy Cue wrote to Steve Jobs in 2009. “Random House doesn’t like the $9.99 price point, but doesn’t want or support windowing.”
In a later e-mail to Jobs, Cue said that the publishers wanted a proposal from Apple. The Department of Justice also showed that Apple facilitated publisher communication, showing that phone calls were made between Apple and the publishers and then the publishers themselves. Cue is expected to take the stand on June 13. Apple co-founder Steve Jobs died in October 2011.
However, Apple attorney Orin Snyder sent a different message in his opening remarks. “Apple is going to trial because it did nothing wrong,” he said. “Apple did not conspire with any publisher individually, collectively or otherwise to raise industry prices.”
Snyder also urged U.S. District Jude Denise Cote for a fair trial.
She assured him that: “The deck is not stacked against Apple unless the evidence stacks the deck against Apple.”
The trial is expected to last three weeks. Each side gets 29 hours to argue its side of the case.
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