A federal judge on Wednesday said that some of Mr. Jobs’s words helped persuade her that Apple had violated antitrust law in conspiring with publishers to raise prices of e-books. Although it appears unlikely that the ruling will have an immediate effect on the book-buying public, it could affect how Apple cuts deals with media companies that provide the music, books and movies that help make its iPhones and iPads compelling.
Charles E. Elder, an antitrust lawyer at Irell Manella, said that the ruling could lead Apple and other technology companies negotiating with media companies to “proceed with extreme caution” to avoid any appearance of collusion.
On Wednesday, Apple continued to assert it had done nothing wrong, and said it would appeal the decision. A trial to determine damages will follow.
“Apple did not conspire to fix e-book pricing and we will continue to fight against these false accusations,” Tom Neumayr, an Apple spokesman, said. “When we introduced the iBookstore in 2010, we gave customers more choice, injecting much needed innovation and competition into the market, breaking Amazon’s monopolistic grip on the publishing industry.”
In her ruling, Denise L. Cote of United States District Court in Manhattan said Apple had taken advantage of the publishers’ “fear of and frustration” over Amazon.com’s control of e-book pricing, and the tight window of opportunity in the weeks leading up to the iPad’s introduction in 2010, to get the publishers to agree to its terms. “Apple seized the moment and brilliantly played its hand,” she wrote.
Five major publishers had also been named in the suit, but they all settled before the trial. Apple continued to fight the charges despite what increasingly looked like uphill odds. Publicly, the company said it refused to settle as a matter of principle because it had done nothing wrong.
The Justice Department said the judge’s decision was a victory for people who buy e-books.
“Companies cannot ignore the antitrust laws when they believe it is in their economic self-interest to do so,” the Justice Department said in a statement. “This decision by the court is a critical step in undoing the harm caused by Apple’s illegal actions.”
The main reason e-book prices will probably not move sharply in the near term is that the publishers who settled are operating under the settlement’s terms, which prohibit publishers from restricting a retailer’s ability to discount books.
“The changes to the industry have already happened,” said Mike Shatzkin, the founder and chief executive of the Idea Logical Company, a publishing consultant.
Since those settlements have gone into effect, prices on many newly released and best-selling e-books have gone down. One New York Times best-seller, “And the Mountains Echoed,” by Khaled Hosseini, is sold on Amazon.com for $10.99. But other e-books seem to have held closer to presettlement prices: “The Ocean at the End of the Lane,” by Neil Gaiman, is listed for $12.80 on Amazon.com.
The antitrust suit underscored the turmoil in the book industry as readers shift from ink and paper to electronic devices like tablets and smartphones, where they can buy books with the push of a button. The publishers want to embrace new media, but they are also trying to protect their profits and retain control of their businesses.
A recent survey of the publishing industry revealed that in the United States, e-books account for 20 percent of publishers’ revenue, more than $3 billion, up from 15 percent the year before. Amazon.com dominates the e-book market.
The outcome will probably inflict some damage to Apple’s reputation. The judge’s decision casts Apple as a cold and manipulative bully whose actions have harmed consumers, contrary to the way the company markets itself, as a maker of products that improve people’s lives.
Article source: http://www.nytimes.com/2013/07/11/technology/judge-rules-against-apple-in-e-books-trial.html?partner=rss&emc=rss