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Thursday, 14 February 2013 11:03

Apple faces the music for price fixing

Written by Nick Farrell



Expects the government to do what it is told

Apple is testing its reality distortion field against the US government. The company has been sued by the US government for running a price fixing cartel with four key publishers which was designed to keep the price of e-books inflated.

Apple CEO Steve Jobs was so proud of the cartel that he bragged about it to his biographer. The government managed to get the others involved in the cartel to confess and pay up a fine. Apple refused, after all Steve said it was ok to take money from users, so it must be true. Besides, Amazon is a monopoly and Apple’s cartel stopped it taking too much of the industry. It is not clear what Apple hopes to gain from fighting the case. It is incredibly high stakes and the US government will probably through the ebook at it.

The Justice Department alleges that Apple came to agreements with each of the publishers meant to ensure that e-book prices at its iBookstore and other retailers would remain higher than those offered by Amazon.com. At the Apple trial, to be overseen by U.S. District Judge Denise Cote in Manhattan, the Justice Department will seek not monetary damages but a judicial decree that Apple violated antitrust law. Government lawyers want the judge to issue an order enjoining Apple from engaging in any conduct similar to that alleged in the case.

While this seems like nothing really, it would open the way for Jobs’ Mob to be sued by Amazon and other publishers. Apple and the publishers already face a class-action suit filed on behalf of consumers and a similar suit filed by dozens of state attorneys general. The Consumer Federation of America thinks that e-book price fixing cost consumers more than $200 million in 2012. State and federal antitrust laws allow plaintiffs to recover triple the amount of actual damages established at trial.

All that Jobs’ Mob can be hoping is that the jury are all Apple fanboys and its reality distortion field will hold.

Nick Farrell

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