This week, the U.S. Supreme Court announced that it would not review a decision by the Second U.S. Circuit Court of Appeals that upheld a District Court ruling that Apple conspired to fix the retail price for newly released and bestselling trade e-books in violation of the Sherman Antitrust Act. The decision not to hear the case means that Apple will have to pay out some $400 million to consumers for e-books they purchased.
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. We also conclude that the District Court’s injunction is lawful and consistent with preventing future anti-competitive harms.”
Apple, however, argued that it brought innovation and competition to the e-book market by upsetting Amazon’s dominance, as reported by the Wall Street Journal. In December 2015, in a friend-of-the-court brief, the Authors Guild, Authors United, the American Booksellers Association, and Barnes & Noble asked the U.S. Supreme Court to review the Second Circuit Court decision. The brief argued that Apple’s entry into the e-book market enhanced competition by decreasing the average price of e-books and increasing the number of e-book titles and of e-book distributors. This, the brief noted, led to technological improvements in the e-book market and enhanced freedom of expression and access to e-books.