Apple claims US government sides with monopoly in e-book case
Apple denied in a court filing that it had conspired to fix e-book prices, and said it had no interest in price increases
IDG News Service - The U.S. government has sided with monopoly rather than competition in bringing a case of e-book price-fixing against Apple, the company said in a filing on Tuesday before a federal court.
The Department of Justice filed in April an antitrust lawsuit against Apple and five large publishers, accusing the companies of working together to raise prices of e-books, in retaliation for competitor Amazon.com pricing most e-books at $9.99 beginning in late 2007.
Three publishers - Hachette Book Group, HarperCollins and Simon & Schuster - agreed to settle the lawsuit, the DOJ said.
Apple's reply to the court is in line with a statement issued by Apple in April after the DOJ filed its case, in which it said that "the launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry." The company added: "Just as we've allowed developers to set prices on the App Store, publishers set prices on the iBookstore."
The government's complaint does not allege that all e-book prices, or even most e-book prices, increased after Apple entered the market, the company said in the filing before the U.S. District Court for the Southern District of New York. Apple had in fact no interest in seeing price increases, it said.
The government's complaint against Apple is fundamentally "flawed as a matter of fact and law," Apple said. The company said it has not conspired with anyone, was not aware of any alleged conspiracy by others, and never fixed prices.
At the time Apple entered the market, Amazon sold nearly nine out of every ten e-books, and its power over price and product selection was nearly absolute, Apple has stated. The company's entry helped grow the number of e-book titles, the range and variety of offerings, sales, and improved the quality of the e-book reading experience.
Instead the government focuses on increased prices for a handful of book titles, Apple said.
Apple offered any publisher interested in the iPad platform and its iBookstore the ability to sell its e-books directly to consumers, rather than dealing only with a single dominant buyer, Amazon, it said.
One of Amazon's most successful marketing strategies was to lower substantially the prices of newly released and best-selling e-books to $9.99, a price that the defendant publishers saw as a challenge to their traditional business model, according to the DOJ lawsuit.
The defendant publishers feared that lower retail prices for e-books would result in consequences such as lower wholesale prices of e-books and lower prices for print books. The publishers wanted higher retail e-book prices across the industry before the $9.99 price became an "entrenched consumer expectation," the DOJ said. The publishers then allegedly teamed up with Apple to push up e-book prices.
- 15 Non-Certified IT Skills Growing in Demand
- How 19 Tech Titans Target Healthcare
- Twitter Suffering From Growing Pains (and Facebook Comparisons)
- Agile Comes to Data Integration
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- Performance Management: The Mobile App Development Playbook This comprehensive 16 page Forrester Research, Inc. report, authored by Jeffrey Hammond, Forrester VP and Principal Analyst, details a number of valuable, commonly...
- New Problems Require Innovative Solutions The mobile market is expected to be worth $25 billion by 2015
- Getting Agnostic about Mobile Devices The idea of being able to interact with customers, prospects, and stay attuned to competitive pressures is not new, but the velocity at...
- Pay-as-you-Grow Data Protection: IBM Tivoli's Full-featured Data Protection Suite for Small to Medium Businesses IBM Tivoli Storage Manager Suite for Unified Recovery gives small and medium businesses the opportunity to start out with only the individual solutions...
- Meg Whitman presents Unlocking IT with Big Data During this Web Event you will hear Meg Whitman, President and CEO, HP discuss HAVEn - the #1 Big Data platform, as well...
- The New Way to Work Knowledge Vault This Knowledge Vault focuses on how, in today's increasingly virtual world, it's more important than ever to engage deeply with employees, suppliers, partners,... All Mobile Apps White Papers | Webcasts