The Business Litigation Blog

Judge Finds Apple Guilty of Price-Fixing: Debate Lingers over Damages

Not long ago we wrote a blog post about the Department of Justice’s lawsuit against Apple for the company’s alleged e-books price fixing scheme with several large publishing companies. While all of the publishing companies settled with the DOJ, Apple decided to defend itself.

Last month, Judge Cote found Apple guilty of conspiring with publishing companies in order to drive up the cost of e-books and stop Amazon from monopolizing the industry.

What continues to be at issue, however, is how Apple should be penalized.

Now that it has won the lawsuit against Apple, the DOJ has asked the judge to limit the amount of autonomy the company has. The DOJ has requested government oversight of Apple’s iTunes and App stores.

If accepted, the proposals could provide more control to those who produce content as well as prohibit Apple from reaching agreements related to the raising of E-books pricing. More specific limitations sought by the lawsuit included a five year ban on e-book contracts and a two year allowance for rival companies wherein their customers could purchase E-books from them via Apple applications. The DOJ also called for the monitoring of Apple’s compliance with the judgment for the next ten years.

Apple, however, contends that these overreach: they regulate the distribution of all of its content as opposed to strictly the e-books. Apple took issue with the Department’s attempt to regulate its dealings with all publishing companies as opposed to the particular ones that were involved in the suit as well as its attempt to monitor its trade for ten years to come.

Judge Cote met with both sides Tuesday, requesting that they consult with one another in order to come up with an injunction that she could sign and implement by next week. The judge told lawyers for Apple that the company’s failure to display any signs of having learned from the entire ordeal justified her decision to grant the opposition’s request for a monitor to oversee the company’s adherence to anti-trust laws.

Judge Cote denied the DOJ’s request to require Apple to hyperlink to its competitors in its applications, believing that the negative impact on Apple’s App Store functionality would not create the desired balance in the market.

It remains to be seen how Judge Cote’s final decision will affect the future of the e-books industry. However, the outcome can certainly be useful in looking ahead to the future of anti-trust law, particularly as technology changes the framework in which these types of cases exist.

As we mentioned in our other post surrounding this case, anti-trust laws are common examples of the types of laws broken by large businesses. The laws surrounding anti-trust and unfair competition can often be varying and complex. It is important to consult an attorney with any questions related to this branch of the law. To learn more about the services we offer, visit pattersonlawfirm.com or call 312.223.1699.

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