NEW YORK, N.Y. – A judge has refused a request by Apple to temporarily suspend her ruling that it violated antitrust laws by conspiring with publishers to raise electronic book prices in 2010, and she said it appeared collusion was continuing even after her findings.
U.S. District Judge Denise Cote, ruling Friday from the bench in Manhattan, declined to withdraw the effect of last month’s ruling while Cupertino, California-based Apple Inc. appeals.
The judge said she wasn’t ready to rule on the government’s suggested remedies to eliminate antitrust behaviour. She seemed dismayed as she noted that the publishers and Apple seemed to express together their opposition to some government recommendations, “reflecting a seriously continuing danger of collusion.”
Apple, the maker of iPods, iPads and iPhones, continues to fight what it calls “false accusations.”
The judge ruled last month that Apple had conspired with publishers to spoil the $9.99 e-book price Amazon.com had established. That ruling sided with government regulators’ contention that Apple joined five major book publishers to gang up on Amazon to the detriment of consumers.
Apple, determined to protect one of the world’s most beloved brands, has steadfastly denied it did anything wrong, even as the book publishers involved in the case settled to avoid going to trial.
The trial revealed e-book prices rose after Apple signed with publishers so-called agency agreements, in which publishers rather than retailers set prices for each title.
Earlier this week, publishers that have settled the e-book pricing dispute with the federal government objected to penalties the government wants to impose on Apple, saying they’ll hurt publishers rather than the personal electronics company.
In court papers submitted on Wednesday, five publishers said the government’s plans to ban Apple from engaging in agency agreements for five years wouldn’t restrict Apple’s pricing behaviour.
“Rather, under the guise of punishing Apple, they effectively punish the settling defendants by prohibiting agreements with Apple using an agency model,” lawyers for the publishers said.
As recommended by the government, a court order would require Apple to terminate any agency agreement with publishers.
The judge said Friday that any order she signs will be aimed at getting “us to a world” in which a publisher can negotiate independently with a retailer. She said it was clear that the largest book publishers don’t engage in price competition with one another.
The publishers said the proposed remedy conflicts with consent decrees the publishers agreed to when they settled their cases with the government. Those deals permit the publishers to enter agency deals with e-book retailers with some agreed-to limitations.
The publishers said the Department of Justice “induced publishers to enter these agreements on the condition that publishers could continue to use the agency model.” As a result, the court papers said, the publishers entered agency agreements with Apple and other e-book retailers under the agency model. Breaking those deals would be costly and disrupt business, they said.
The court papers were submitted on behalf of HarperCollins Publishers LLC, Hachette Book Group Inc., Simon & Schuster Inc., Holtzbrinck Publishers LLC and Penguin Random House LLC.
A Department of Justice spokeswoman has said the proposed settlement with Apple would prohibit the company from entering deals that limit retail price competition during a defined period.