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NY judge: Apple colluded to raise e-book prices

Posted: July 11, 2013 7:00 a.m.
Updated: July 11, 2013 7:00 a.m.
 

NEW YORK (AP) — Apple Inc. milked the popularity of its iTunes store to form an illegal cartel with publishers to raise electronic book prices, a federal judge decided in a case swayed by the words of the late Steve Jobs.

Wednesday's ruling by U.S. District Judge Denise Cote in Manhattan sided with government regulators' contention that Apple joined five major book publishers to gang up Amazon.com in a price-fixing conspiracy that caused consumers to pay more for electronic books.

Determined to protect one of the world's most beloved brands, Apple has steadfastly denied it did anything wrong, even as the book publishers involved in the case settled to avoid a trial. Apple didn't waver from its insistence of innocence after Cote drew an unflattering portrait of the iPhone and iPad maker in her 160-page ruling.

The Cupertino, Calif., company vowed to appeal the decision, extending a legal odyssey that could wind up in the U.S. Supreme Court.

It's unclear whether the initial outcome will have a dramatic impact on the pricing of e-books, which continue to supplant printed copies as more people buy tablets such as the iPad and other devices such as Amazon's Kindle.

"The effect on consumers will be negligible," predicted Ankur Kapoor, an antitrust specialist for Constantine Cannon in New York.

The earlier settlements with book publishers were designed to encourage more discounting. But that hasn't happened, even at Amazon, which had unnerved publishers by selling e-book versions of popular hardcover titles for $9.99 before the April 2010 release of Apple's iPad.

It's a discounting practice that Apple and the publishers sought to eliminate leading up to the iPad's debut, according to the antitrust lawsuit filed last year by the U.S. Justice Department and 33 state attorneys general.

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