Apple Files Response Denying E-book Price Fixing

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After accusing US Department Of Justice (DOJ) of supporting monopoly, Apple has filed an official response to accusations that it colluded with book publishers to artificially inflate the cost of products sold through the iBookstore.

The latest filing is standard procedure in the suit being leveled against Apple and two major publishing houses along with being the latest significant development since Judge Denis Cote denied the defendant’s motion to dismiss earlier in May.

This filing saw Apple categorically dismiss accusations from the class, which now includes 31 states, stating several times that the evidence will “speak for itself.” The response from Apple breaks down the complaint paragraph by paragraph. It challenges the charges by either stating that there is lack of “sufficient evidence and belief” or just flat out denying them. While Apple admits that while it conducted bilateral negotiations with certain publishers, the iPhone-maker denies any collusion or attempt at price-fixing in the situation.

When it came to the “agency model,” Apple “denies that the adoption of an agency model worked a “radical” or “fundamental” change in pricing “that had existed for more than a hundred years.” The response even went on to say that agreements held with publishers did not prevent competing retailers to set their own e-book prices. It was mentioned that under the agency model, a “most favored nations” clause disallowed publishing partners to offer their wares to other resellers at lower prices.

When discussing the topic, Amazon was brought up a number of times in the filing as the wholesale pricing model used by the sales giant is being leveraged by the plaintiffs as an example of how e-book market got affected by Apple’s strategy.

The class-action suit as a whole is progressing alongside a parallel DOJ antitrust case, which is something that Apple has warned could be harmful for consumers, calling it “fundamentally flawed.” The recent documents from the class-action case reveal a previously redacted email from Steve Jobs pushing for the agency model. Though it is not hard evidence of collusion, the plaintiffs are attempting to illustrate a willingness on the part of Apple to persuade publishers into the iBookstore model.

Let us see what comes of the whole ordeal as the next deadline for the case is a status conference which is set to take place in June.

Source: Modmyi

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