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Apple conspired with publishers to raise e-book prices, rules US judge

The tech giant orchestrated a cartel with five major publishers: Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster.

Apple has violated Section 1 of the Sherman Act by conspiring with five major publishers to raise e-book prices, a US judge has ruled.

Denise Cote, a senior judge on the United States District Court for the Southern District of New York, has said it was clear from the evidence that the iPad maker played a key role in conspiring with publishers to increase the price of e-books.

The Department of Justice’s (DoJ) antitrust division’s three-week trial against Apple was overseen by judge Cote.

Assistant attorney general Bill Baer, in charge of the DoJ’s antitrust division, in a statement, said: “This result is a victory for millions of consumers who choose to read books electronically. After carefully weighing the evidence, the court agreed with the Justice Department and 33 state attorneys general that executives at the highest levels of Apple orchestrated a conspiracy with five major publishers – Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster – to raise e-book prices.

“As the department’s litigation team established at trial, Apple executives hoped to ensure that its e-book business would be free from retail price competition, causing consumers throughout the country to pay higher prices for many e-books. The evidence showed that the prices of the conspiring publishers’ e-books increased by an average of 18 percent as a result of the collusive effort led by Apple.”

Baer further said that companies cannot ignore the antitrust laws when they believe it is in their economic self-interest to do so.

The DoJ trial began on 3 June 2013. Arguments closed on 20 June 2013.

The DoJ filed a civil antitrust lawsuit against Apple, Hachette Book Group (USA), HarperCollins Publishers, Holtzbrinck Publishers, which does business as Macmillan, Penguin Group (USA) and Simon & Schuster in April last year.

The court is yet to schedule a hearing to address the parties’ proposed remedies.