Apple, Publishers ‘Conspired’ to Raise eBook Prices, DoJ Tells Court

Apple faced off against the U.S. Justice Department in a New York court Monday — the first day of what will be a roughly three-week trial as the iPhone maker attempts to prove it is not guilty of conspiring to fix eBook prices.

The DoJ delivered its opening statement to Judge Denise Cote who is presiding over the non-jury trial. Cote, according to PC World, indicated in a pre-trial hearing that she believed the government has a good case.

“I believe that the government will be able to show at trial direct evidence that Apple knowingly participated in and facilitated a conspiracy to raise prices of eBooks, and that the circumstantial evidence in this case, including the terms of the agreements, will confirm that,” Cote was quoted in previously published news reports.

She did note Monday, however, that she would not form a final opinion until all the testimony had been heard, PC World reported.

The government filed its lawsuit against Apple and five publishers April 11, 2012, accusing the group of plotting to eradicate retail price competition, resulting in customers forking out more for their eBooks. The department’s Anti-trust Division previously settled its claims against Hachette Book Group Inc., HarperCollins Publishers L.L.C., Penguin Group (USA) Inc., Simon & Schuster Inc. and, most recently, Macmillan Publishers.

The Justice Department, in a recent court filing, called Apple the ringleader in a plot to raise eBook prices “to strip retailers of pricing authority.”

The DoJ voiced similar sentiments Monday.

“There’s simply no dispute that publishers wanted to raise eBook prices and that Apple conspired with them to do the same,” DoJ lawyer Lawrence Buterman was quoted by PC World. “Apple was a facilitator and go-between to move publishers to higher prices.”

As part of its opening statement, the DoJ used an 81-slide presentation which featured a number of e-mails exchanged between Apple and publishing executives.

The DoJ highlighted a number of the quotes from the e-mail including:

“Amazon screwed it up. It paid the wholesale price for some books, but started selling them below cost at $9.99. The publishers hated that….”

“So we told the publishers, ‘We’ll go to the agency model, where you set the price, and we get our 30 percent, and yes, the customer pays a little more, but that’s what you want anyway.’”

“I think it would be prudent for you to double delete this from your e-mail files when you return to your office.”

“…we do appear to be on a collision course with Amazon, and possibly with Google as well.”

The slide presentation can be viewed on Scribd courtesy of CNet.

Apple CEO Tim Cook said last week the company has refused to settle with the government in its eBook pricing anti-trust case because the iPhone maker has done nothing wrong.

Cook said the U.S. Justice Department asked the company to sign a document admitting wrongdoing. Cook added that he does not believe Apple has done anything wrong.

“We’re not going to sign something that says we did something that we didn’t do, so we’re going to fight,” Cook said in an interview at the D11 conference May 28.

The DoJ is not looking to fine Apple — instead, it wants the judge to order Apple to refrain from behavior connected with eBook price fixing in the future.

If the judge does rule against Apple, the firm could find itself back in court courtesy of customers who choose to launch class action lawsuits.

U.S. v. Apple Et Al Opening Slides

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