U.S. District Court Rules That Apple Conspired to Raise E-Book Prices in Violation of Antitrust Laws
Multi-State Lawsuit Alleged the Technology Giant Colluded with Publishers to Fix Prices
BOSTON – A U.S. District Court judge today ruled that Apple Inc. conspired to raise prices in the electronic book (e-book) market, resulting in a victory for 33 states and the U.S. Department of Justice, which filed lawsuits against the technology giant over price-fixing and collusion, Attorney General Martha Coakley announced today.
The U.S. District Court for the Southern District of New York found that Apple’s anti-competitive conduct violated the federal Sherman Antitrust Act and parallel state laws. Damages and restitution will be the subject of a future proceeding.
“This victory will bring relief to consumers who were forced to pay higher prices for electronic books and help ensure open competition and discounting in the e-book market,” AG Coakley said. “Today’s ruling affirms that collusion among competitors to raise prices in violation of antitrust laws will not be tolerated.”
As part of the multi-state antitrust lawsuit, the AG’s Office filed a complaint with 32 other state attorneys general in May 2012 alleging that Apple, along with major U.S. publishers, conspired to artificially raise e-book prices. The Court today found that Apple “played a central role in facilitating and executing” the conspiracy to raise e-book prices, and that Apple’s “orchestration” of the conspiracy was necessary to its success. The evidence showed that the prices of the conspiring publishers’ e-books increased by an average of 18 percent as a result.
The Court’s decision comes after a three-week bench trial before Judge Denise Cote that ended on June 20. The two publishers named in the suit both settled the states’ claims against them prior to trial. In April, Macmillan agreed to pay $20 million to consumers nationwide plus costs and fees. In May, Penguin Group (USA) Inc. agreed to a settlement including $75 million in consumer compensation.
Last year, in advance of the lawsuit, three publishers – Hachette Book Group Inc., HarperCollins Publishers L.L.C., and Simon & Schuster Inc. – agreed to pay more than $69 million to consumers to settle similar price-fixing allegations.
Consumers nationwide will receive more than $166 million in compensation as a result of all the settlements so far. Of that amount, Massachusetts consumers are expected to receive approximately $5 million in restitution.
This case is being handled by Michael Franck, Assistant Attorney General, and Helen Hood, paralegal, in Attorney General Martha Coakley’s Antitrust Division, as well as William Matlack, Chief of the Antitrust Division.