Apple, publishers must face consumers' e-book suit

Apple, publishers must face consumers' e-book suit
Highlights
  • Apple and five book publishers have failed to persuade a U.S. judge to throw out a lawsuit accusing them of conspiring to raise electronic book prices.
Apple Inc and five major book publishers have failed to persuade a U.S. judge to throw out a lawsuit by consumers accusing them of conspiring to raise electronic book prices two years ago.

The lawsuit in U.S. District Court in New York is related to government charges in April accusing Apple and publishers of colluding to break up Amazon.com's low-cost dominance of the digital book market. HarperCollins Publishers Inc, Simon & Schuster Inc and Hachette Book Group reached settlements with the Department of Justice's anti-trust division.

Apple and two of the publishers, Macmillan and Penguin, said in court last month that they want to go to trial to defend themselves against the government charges. The judge has scheduled the next pre-trial hearing for June 22.

The consumers' main allegation is that the publishers worked together to raise prices and decrease retail competition with Apple coordinating the agreement among them.

In a written ruling on a bid by Apple and the five publishers to dismiss the class action lawsuit, U.S. District Judge Denise Cote said in part on Tuesday that as alleged in the complaint, "it is presumed that the conduct by all parties would be unlawful under the rule of reason."

Apple, Simon & Schuster, Penguin and HarperCollins representatives could not immediately be reached to comment on the ruling. Hachette declined to comment.

In court papers, the defendants described the pricing agreement allegation as implausible. One of their arguments was that after the purported pricing agreement, prices became more varied, not less so.

The government said the price-fixing took place in early 2010 as Apple was introducing its iPad. E-book prices went up an average of $2 to $3 in a three-day period in early 2010, according to the complaint.

The defendants in the case brought by consumers are HarperCollins Publishers LLC; Hachette Book Group Inc and Hachette Digital; Holtzbrinck Publishers LLC doing business as Macmillan; Penguin Group (USA) Inc; and Simon & Schuster Inc and Simon & Schuster Digital Sales Inc.

News Corp owns HarperCollins Publishers Inc, CBS Corp owns Simon & Schuster Inc and Hachette Book Group is a subsidiary of Lagardere SCA. Penguin is part of Pearson Plc's.

The case is In re: Electronic Books Antitrust Litigation in U.S. District Court for the Southern District of New York, No. 11-md-2293.
© Thomson Reuters 2012
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