US appeals court judge doubts government's position in Apple e-books case
16 December 2014
A US judge yesterday expressed doubt over the government's e-book antitrust case against Apple, saying the tech giant was challenging "predatory" pricing from rival Amazon, AFP reported.
The comments came in a federal appeals court panel hearing in the case in which it was found that Apple had colluded with publishers to hike e-book prices.
According to Apple its entry into the e-book market fostered competition since it challenged Amazon, which enjoyed a dominant share in e-books.
According to Apple, its entry spurred additional publishers to produce e-books, and that prices of e-books generally fell even though it conceded that some prices increased in the short-term.
In July 2013, US District Court judge Denise Cote concluded that Apple was liable for "facilitating and encouraging" a collective effort by the publishers to end price competition for e-books.
Theodore Boutrous, an attorney with Gibson Dunn who represented Apple, told the appeals court the ruling was "a roadblock that chills innovation and competition." He added, the decision discouraged new entrants into a market, "which the court has said is the essence of competition," he said.
Apple's arguments had been favourably received by one member of the three-judge panel, who seemed unconvinced about the government's case.
Jacobs asked a Department of Justice lawyer why it was wrong for the publishers jointly defeat a "monopolist" that was using "predatory pricing."
According to Jacobs it was like the mice getting together to put a bell on the cat.
In response, Malcolm Stewart, the justice department lawyer said, no publisher on its own would have entered into the deals with Apple unless they were conspiring to drive up e-book prices.
He added it was to combat the public perception that books were only worth so much.
The appeal came on Cote's decision that Apple played a "central role" in a conspiracy with publishers to eliminate retail price competition and increase e-book prices.
According to the government, the scheme caused some e-book prices to increase to $12.99 or $14.99 from the $9.99 that Amazon charged.
The publishers who colluded with Apple included Lagardere SCA's Hachette Book Group Inc, News Corp's HarperCollins Publishers LLC, Penguin Group Inc, CBS Corp's Simon & Schuster Inc and Verlagsgruppe Georg von Holtzbrinck GmbH's Macmillan.