Accused of price gouging in Australia a US Judge has overnight found Apple guilty of price-fixing conspiracy for electronic books.
The US company could be forced to pay hundreds of millions of dollars in damages, after it failed to “explain away” damning emails written by its late founder, Steve Jobs.
District Judge Denise Cote, who presided over the case in Manhattan, said it was clear from the evidence that Apple was the ringleader in a conspiracy to push up prices. “Apple’s efforts to explain away Jobs’s remarks have been futile,” she said.
The technology giant, which was eager to establish its iPad as an e-reading device, handed book publishers the power to set prices, as long as they guaranteed Apple a 30pc cut of the profits and pledged that no other retailer would be able to undercut it.
Judge Cote said at the outset of the trial that a trove of emails sent between the publishers and Steve Jobs Apple’s former CEO would enable the US government to show that Apple was guilty of conspiracy. She appeared to be shifting position over the course of the trial, offering the Cupertino technology giant a sliver of hope that it could go in their favour.
But this all came to nothing when the Judge in delivering the verdict said that Apple “conspired to restrain trade” with publishers to boost prices.
The three-week trial centred on whether Apple’s policy of allowing publishers to dictate the price of ebooks broke US anti-trust laws, and saw the technology titan trying to paint itself as a crusader for customer choice, rather than a business trying to extract more and more money.
The company was eventually undone by a hoard of messages, including draft emails by Mr Jobs and exchanges between him and News Corporation executive James Murdoch.
The iPad maker was reminded by the New York Attorney General Eric Schneiderman that everyone must play “fairly by the same set of rules, no matter how big or powerful they are”, at the end of what has been a bruising court battle with the US Department of Justice.
The Daily Telegraph in the UK said that publishers were concerned that Amazon had devalued their products by establishing the standard price of ebooks as $9.99, but were able to push prices up to $12.99 and in some cases $14.99 after signing the Apple deal.
Apple’s defence throughout the proceedings was that it wanted to increase choice and lower prices for customers – something it claims it managed to do on bestselling titles.
It also tried to downplay the emails written by Mr Jobs, claiming that it was unfair for anyone to be cross-examined on what the technology chief meant, given he is no longer around.
In one of the emails which weighed against Apple, Mr Jobs told Mr Murdoch – who, as deputy chief operating officer of News Corp presided over HarperCollins – that they had an opportunity to “create a real mainstream e-books market at $12.99 and $14.99”.
In another message, drafted but never sent, Mr Jobs accepted certain terms as long as publishers forced Amazon to adopt the same model of pricing.
Five publishers were accused of conspiring with Apple – HarperCollins, Simon & Schuster, Macmillan, Penguin and Hachette – but all those companies settled with the US Department of Justice before the case went to trial.
Apple said that they will appeal today’s judgment against it.