“A federal judge on Wednesday found that Apple violated antitrust law in helping raise the retail price of e-books, saying the company ‘played a central role in facilitating and executing’ a conspiracy with five big publishers," reports The New York Times.
The story continues: “’Without Apple’s orchestration of this conspiracy, it would not have succeeded as it did in the spring of 2010,’ the judge, Denise L. Cote of United States District Court in Manhattan, said in her ruling. She said a trial for damages would follow.”
The article notes: “The Justice Department brought the antitrust case against Apple and the publishers a year ago. The publishers settled their cases, but Apple executives insisted that the company had done nothing wrong."
The piece adds: “The Justice Department said Apple’s deal with the publishers left Amazon with no choice but to raise prices. When Apple entered the e-book market in 2010, it changed the way publishers sold books by introducing a model called agency pricing, where the publisher — not the retailer — sets the price, and Apple took a cut of each sale. As a result, the publishers were able to set e-book prices higher. Apple proposed price caps of $12.99 and $14.99.
“Apple also included a condition in its contracts, called the most-favored nation clause, requiring the publishers to allow Apple to sell e-books at the same price as the books would be sold in any other store. Apple has said the clause was intended to guarantee that its customers got the lowest e-book prices, but the government argued that it defeated price competition.“
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