Apple in court to fight ebook conspiracy

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In the trial set to open in US District Court in New York on Monday, technology giant Apple will defend itself against allegations the company was the ‘ringmaster’ of a conspiracy to raise prices of electronic books.

US antitrust watchdogs allege Apple orchestrated a collusive shakeup of the ebook business in early 2010 that resulted in higher prices.

US antitrust watchdogs allege Apple orchestrated a collusive shakeup of the ebook business in early 2010 that resulted in higher prices.

Apple is expected to argue its actions shook up a sector that had been dominated by Amazon, and that it boosted competition and improved conditions for consumers.

Early signals suggest the three-week, non-jury trial could be a tough ride for Apple, which has been struggling of late amid a dearth of new products and recent allegations that it avoided billions in taxes.

Early signals suggest the three-week, non-jury trial could be a tough ride for Apple, which has been struggling of late amid a dearth of new products and recent allegations that it avoided billions in taxes.

The company will be defending itself against the US Justice Department after five large publishers named in the lawsuit settled the charges. The five publishers originally named as defendants reached settlements in which they agreed to terminate their ebook agreements with Apple.

The largest settlement was with Penguin for $US75 million ($A78.05 million), while a settlement with Hachette, Harper Collins and Simon Schuster created a $US69 million fund for refunds to consumers. Macmillan settled for $US26 million.

Apple chief executive Tim Cook dismissed the idea of a settlement because it would call for the company to sign an admission of wrongdoing.

‘We didn’t do anything wrong there,’ Cook told a recent California conference. ‘We’re going to fight.’

The government’s case centres on a period when Amazon dominated the ebook business, selling most bestseller titles for $US9.99. Leaders of the major publishing houses held ‘CEOs dinners’ in ‘private rooms at upscale restaurants’ at which they discussed the threat from Amazon.

Into this environment stepped Apple, which was readying the launch of its iPad. Rather than following the Amazon ‘wholesale’ pricing model in which the retailer sets the price, Apple favoured the so-called ‘agency model’ where the publishers set the price and the seller — in this case Apple — received a 30 per cent commission.

The result was an increase in price to $US12.99 or $US14.99 for most books

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