Apple set for trial over price fixing charges

Apple was allegedly involved in price-fixing arrangement when it forayed into e-book market in 2010 with the launch of the iPad.

New Statesman
Photograph: Getty Images.

California technology company Apple Inc., which has been accused of conspiring with publishers to fix prices of e-books by US antitrust authorities, is set to go to trial today.

According to the authorities,  Apple was involved in price-fixing deal when it forayed into electronics book market in 2010 with the launch of the iPad.

In April 2012, the government sued Apple and five publishers  - Macmillan, Simon & Schuster,  Hachette Book Group, Penguin and HarperCollins.

Apple, which claims that it did do anything illegal, is the last defendant in the case as the five publishers settled the case with the government  for a total of approximately $164m, reports Bloomberg.

Apple claimed that it brought competition into the e-books market, which is ruled by Amazon.com Inc, through innovation.

For the trial,  evidence would comprise e-mails and statements of Apple’s late founder Steve Jobs and testimony of Eddy Cue, the company’s senior executive who dealt with negotiations with the publishers.

The publishers will also be called in the trial as witnesses. 

The antitrust authorities claimed that before launching iPad into the market, the company allegedly negotiated with publishers to sell e-books as per the agency model, under which publishers would decide the prices and not the retailers, with Apple getting a share of 30%.

In its court filing, the government said that major publishers disliked Amazon for offering low prices and saw Apple’s foray as way to earn higher retail prices.