Friday, May 24, 2013

Judge says leaning toward DOJ in Apple e-book price-fixing case

U.S. District Judge Denise Cote, who is set to oversee a trial involving Apple, publishers, and alleged e-book price fixing on June 3, gave her early view during a pretrial hearing on Thursday. She expressed a view -- still tentative -- that leans toward the side of the U.S. Justice Department.

Cote said:
I believe that the government will be able to show at trial direct evidence that Apple knowingly participated in and facilitated a conspiracy to raise prices of e-books, and that the circumstantial evidence in this case, including the terms of the agreements, will confirm that.
Orin Snyder, a lawyer for Apple, said in a statement,
We strongly disagree with the court's preliminary statements about the case today. We look forward to presenting our evidence in open court and proving that Apple did not conspire to fix prices.
The Justice Department sued Apple and five publishers in the matter in April of last year. Apple, however, is the sole remaining defendant in the case. The five publishers -- Pearson Plc's Penguin Group, News Corp.'s HarperCollins Publishers Inc., CBS Corp.'s Simon & Schuster Inc., Hachette Book Group Inc. and MacMillan -- have all settled with the DOJ.

Of those, Pearson had been set to go to trial along with Apple. However, on Wednesday, Pearson agreed to a proposed $75 million settlement with the states and plaintiffs in consumer class-action lawsuits.

Toward the end of Thursday's pretrial hearing, Mark Ryan, a lawyer with the DOJ, asked if Cote would be able to share any of her thoughts on the case so far. Cote is hearing the case without a jury, and had said at the start of the proceedings that she was working on a draft of a written decision that she would expand and publish after the trial.

Cote then gave the statement noted above, calling it her "tentative view." She said her opinion, thus far, was based largely on material already submitted into evidence: emails and other correspondence that took place over a six-week period between December 2009 and January 2010.

She emphasized that no final decision would be made until after the trial is held, adding that she has yet to read many of the affidavits submitted in support of the parties' positions.

One of the damning pieces of evidence comes directly out of Steve Jobs' official bio, where a full quote is:
We told the publishers, "We'll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that's what you want anyway." They went to Amazon and said, "You're going to sign an agency contract or we're not going to give you the books."
The case is United States v. Apple Inc et al, U.S. District Court, Southern District of New York, No. 12-02826.



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