Apple says adverse ruling in e-book trial could have "chilling effect"

By on June 21, 2013, 10:00 AM
amazon, apple, doj, antitrust, justice department, e-books

Apple lawyer Orin Snyder recently suggested that an adverse ruling in the company’s e-book pricing trial would have a chilling effect on how businesses investigate new markets. It would set a dangerous precedent moving forward as companies would be reluctant to negotiate when entering a new market as they have for years.

U.S. District Judge Denise Cote reportedly put Apple in the pressure cooker during the last day of the trial. At one point, he asked if it would be a correct statement to say that Apple understood publishers were alright with working together to pressure Amazon. Snyder replied that there was no evidence to support a claim that Apple knew publishers were working together before they proposed creating an online bookstore for the iPad.

"There is no such thing as a conspiracy by telepathy," Snyder noted.

The U.S. Justice Department believes Apple conspired with U.S. book publishers to jack up the price of e-books to help undercut Amazon. At the time, Amazon was in control of up to 90 percent of the marketplace. They did this by purchasing books at wholesale prices then selling them – sometimes at a loss – to help promote their Kindle e-reader.

In contrast, Apple allowed publishers to set the price of books. Under this agreement, Apple received a 30 percent commission on the sale of books but more importantly, government officials say this allowed publishers to push Amazon into a similar model and increase prices market-wide.

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