Rotten Apple: Judge Rules Computer Giant Guilty of Price-Fixing

Back in May, we wrote here on PFoL about the court case against Apple Inc, in which the Department of Justice sued the technology company and five major publishers for deliberately manipulating prices of e-books.

Today a federal judge ruled against Apple, claiming that with the release of the iPad in 2010, Apple coerced publishers into entering agreements to sell digital copies of its books at higher prices – some 50% higher – with Apple netting 30% of profits. The argument was that in this “agency model”, publishers – not retailers – unfairly set e-book prices, and that Apple knowingly joined in an unlawful conspiracy.

The Associated Press reports:

“In her ruling U.S. District Judge Denise Cote said Apple knew that no publisher could risk acting alone to try to eliminate’s $9.99 price for the most popular e-books so it ‘created a mechanism and environment that enabled them to act together in a matter of weeks to eliminate all retail price competition for their e-books.’ “


The five publishers named in the suit had already entered into settlements with the U.S. government, but Apple refused to do the same. The company insists that it diligently tried to negotiate with publishers on prices and denies the charges of collusion to price-fix.

Apple says it plans to appeal the decision.