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Wednesday, June 5, 2013

DOJ, Apple Begin Price-Fixing Showdown

The Department of Justice opened its e-book price-fixing case against Apple with a PowerPoint presentation tracking the e-mail messages between the computer giant and senior executives from Hachette, HarperCollins, Macmillan, Penguin, Random House, and Simon & Schuster.

The DOJ brought suit against Apple and five publishing firms in 2012 claiming that the companies agreed to set a higher price for e-books to stop Amazon from charging $9.99 for best-selling titles. The five publishing firms named in the original suit have all settled with the government.

The government accuses Apple of being the hub of a conspiracy. Part of the presentation tracks phone conversations in an attempt to prove publishers were deliberately acting in concert with Apple on the agency deal.

Apple countered by arguing there is no proof of a conspiracy and that Apple “simply was not willing to start a new business that would lose money” by matching the $9.99 price point. Apple also claims its negotiations with publishers were done independent of one another and often quite contentious, while its attorney alleged that it was Amazon that started the conversation on changing the pricing model before any Apple agreement had been reached.

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