On Tuesday, June 30, the Second U.S. Circuit Court of Appeals affirmed by 2–1 a lower-court ruling that Apple did conspire to raise, fix, and stabilize the retail price for newly released and bestselling trade e-books in violation of the Sherman Antitrust Act and various state laws. The court said Apple violated the laws in an effort to upset Amazon’s control of the market, according to a New York Times report.
In 2012, the Department of Justice (DOJ) and 33 states brought the antitrust suit against Apple and five publishers. The suit alleged that Apple, Hachette, HarperCollins, Macmillan, Penguin, and Simon & Schuster conspired to raise, fix, and stabilize the retail price for newly released and bestselling trade e-books in violation of the Sherman Antitrust Act and various state laws. While the publishers settled their cases without admitting wrongdoing, Apple continued the legal fight, insisting that it had broken no laws.
Apple went to trial in June 2013, and the U.S. District Court for the Southern District of New York found the company liable for violating antitrust laws.
The Appeals Court majority opinion, written by Judge Debra Ann Livingston, said the District Court’s finding that Apple orchestrated a conspiracy among publishers to raise electronic book prices was“ amply supported and well-reasoned,” the Times reported. “We also conclude that the District Court’s injunction is lawful and consistent with preventing future anti-competitive harms,” the Appeals Court said.
However, in his dissent, Judge Dennis Jacobs called Apple’s actions “eminently reasonable” and said it was a mistake by Cote and his fellow Appeals judges to assume “competition should be genteel, lawyer-designed, and fair under sporting rules, and that antitrust law is offended by gloves-off competition…. Apple took steps to compete with a monopolist and open the market to more entrants, generating only minor competitive restraints in the process.”
The decision now means that Apple may have to refund as much as $400 million to consumers. The agreement also allows Apple to appeal the case all the way to the Supreme Court, as reported by Publishers Weekly.