Apple Loses Appeal on E-Book Price Conspiracy Case: 'We Did Nothing Wrong Back in 2010'

Apple is guilty of conspiring with five publishers to increase e-book prices, New York Court of Appeals rules.

With a 2-1 decision, the court was in favor of regulators who accused Apple of conspiring with major book publishers to increase e-book prices.

The conspiracy story started when Amazon introduced the Kindle device in 2007. When Amazon started, e-books, including new releases and bestsellers were priced at $9.99.

In the decision, Judge Debra Ann Livingston wrote, "Publishing companies, which have traditionally stood at the center of the multi-billion dollar book-producing industry, saw Amazon's ebooks, particularly its $9.99 pricing, as a threat to their way of doing business."

In 2009, the agreements had started with the release of the iPad and iBookstore.

Apple negotiated with five major publishing companies namely Hachette, which publishes James Patterson's novels; Harpercollins, which is publishing "Go Set a Watchman,";  Macmillan, publishing Richard Back's novels; Penguin, which published the "Fifty Shades" trilogy; and Simon & Schuster, which releases Stephen King's novels.

Livingston described the deal as "arrangements whereby the publishers had the authority to set prices, and could set the prices of new releases and New York Times bestsellers as high as $19.99 and $14.99, respectively."

On Tuesday, Apple stated, "While we want to put this behind us, the case is about principles and values. We know we did nothing wrong back in 2010 and are assessing next steps," CNBC reports.

On the other hand, Judge Dennis Jacobs supported Apple's argument that the deal was made because of Amazon's complete dominance over the e-book market and the need for a good competition.

"So, as a condition to its entry as a competing buyer for the publishers' wares, Apple insisted that the publishers agree to a distribution model that would lower that barrier to retail entry," he wrote.

Last month, the European Commission started an investigation of Amazon's dominance over the e-book market, Reuters reports.

Besides the ordered formal investigation, Amazon is also being eyed for paying low taxes in Luxembourg.

One major part of the investigation is looking into Amazon's contracts with publishing companies.

The European Commission will look into any violation of its antitrust rules and any evidence that Amazon's contract with publishers is not harming consumers and other e-book retailers.

Judge Raymond Lohier, who also voted in favor of regulators, countered, "It cannot have been lawful for Apple to respond to a competitor's dominant market power by helping rival corporations fix prices."

He wrote,"Corporate bullying is not an appropriate antidote to corporate bullying."

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