US class-action ebook price-fixing suit can proceed

May 15, 2012
A man working on his laptop as he uploads e-books. A judge Tuesday allowed a class-action case to proceed against Apple and six publishing houses alleging a price-fixing scheme for electronic books, citing "ample" indications of a conspiracy.

A judge Tuesday allowed a class-action case to proceed against Apple and six publishing houses alleging a price-fixing scheme for electronic books, citing "ample" indications of a conspiracy.

The suit, file last August, is separate from a complaint last month which makes similar allegations, that Apple colluded with publishers to boost the price of and wrest control from Amazon.

The evidence presented of an agreement between Apple and the publishers "is unlawful per se because it is, at root, a horizontal price restraint," Judge Denise Cote of in New York said in an opinion, which allows the case to move forward.

The ruling came in response to a request to dismiss the case from Apple, and the publishers -- HarperCollins, Simon & Schuster, Hachette Book Group, Macmillan, Penguin and Random House.

"There are ample that Apple became an integral member of this conspiracy and well understood that the upshot of its participation would be the elimination of price competition at the retail level, forcing consumers to... 'pay a little more' for ebooks," the judge wrote.

The Justice Department sued Apple and five publishing firms last month alleging a similar conspiracy to raise prices and limit competition for e-books. It immediately announced a partial settlement in the case.

Officials said three of the publishers agreed to end the scheme to force retailers such as Amazon to accept a new pricing plan that ended their ability to offer discounts for electronic books.

Both cases stem from a move by Apple and its late chief executive Steve Jobs to get publishers to move away from a model offered by Amazon -- which sold most ebooks for $9.99 -- to a different system with higher prices.

The move almost instantly raised the prices consumers paid for e-books, to $12.99 or higher.

New documents filed in the government case suggest Jobs played a key role in the conspiracy and told one publisher in an email, "Hold back your books from Amazon" and "Throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99."

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