The iPad maker Apple goes on trial today, Monday June 3rd for allegedly conspiring with five book publishers in regards to price fixing e-book publications. Many market watchers along with a former U.S. Trade Commission head all agreed that this trial will be a highly important case, and that it could have an affect on Internet commerce.
The case is United States v. Apple Inc et al, and filed in the U.S. District Court, Southern District of New York, No. 12-02826.
The U.S. Department of Justice will not be seeking damages in the case, but they are seeking to block Apple from continuing the alleged practice. Apple may face damages in a separate class action suit that was filed by numerous state attorney generals and e-book consumers.
The five major publishers that were accused will not be part of the trial since they all previously agreed to eliminate prohibitions on wholesale discounts and paid a collective of nearly $170 million (U.S.) to benefit book buyers. In all, the five publishers involved were HarperCollins Publishers Inc., which is owned by News Corp., Simon & Schuster Inc., which is owned by CBS, Hachette Book Group Inc, MacMillan, and Penguin Group.
The Justice department claims that the price fixing conspiracy began in 2009 and just before Apple introduced their first iPad. The accusations state that Apple was interested in creating their own on-line e-bookstore, but at that time, which was 2009, Amazon was raking in 90% of all e-books that were sold. Taking advice from two publishing groups, which were HarperCollins and Hachette, Apple entered into the market with the cooperation from the five major publishers who all agreed to give them a cut from the price increases on the publications.
Apple says they are not guilty of any wrongdoing and in an interview conducted last week at the All Things D technology conference in California, Tim Cook said that the company will not be admitting to anything they have not done. “We were asked to sign something that says we did do something, and we’re not going to sign something that says we did something we didn’t do,” Cook said. “And so we’re going to fight.”
Apple contends that their entry into the e-book market has been only positive and has made the market more competitive along with bringing e-book prices down, which is a benefit to consumers.