Apple denies colluding with publishers in price fixing case
Apple is continuing its defense in the class action lawsuit that accuses it of conspiring to raise ebook prices.
In a response filed on May 29, Apple claims that publishers were not happy with Amazon’s pricing tactics and wanted to set their own prices in the iBookstore.
In its filing, Apple claims “that publicly and privately in their individual discussions with Apple, representatives of each of the publishers separately expressed varying degrees of unhappiness with Amazon’s tactics, including its pricing.”
Later in the filing, Apple “denies that it ‘coordinated’ its activities with the Publisher Defendants to restrain trade” and “denies that it entered into an agreement to force Amazon to ‘abandon its pro-consumer pricing.’”
Regarding Amazon’s dominance of the ebook market, Apple notes: “Amazon is the dominant ebook retailer and wields ‘market power’ over ebooks.”
Apple denies that it “coordinated” with publishers to “force Amazon to abandon its pro-consumer pricing.” It also denies that it had a “strong incentives to help the Publisher Defendants restrain trade and increase the price of eBooks.”
However, the company also states that it denies that Amazon’s Kindle “revolutionized the book publishing industry,” and denies that $9.99 was a “standard pro-consumer” price for new eeook titles.
As for the agency model that Apple users, as opposed to Amazon’s wholesale model, the company also denies allegations that the adoption of an agency model caused a “radical” or “fundamental” change in pricing “that had existed for more than a hundred years.”
Apple also admits that there are costs associated with print books that are not present with ebooks and vice versa.
It also states that it entered the ebook retail business with “no market share” and that part of its motivation to start an iBookstore was to “generate revenue and profits for the corporation and its shareholders and to avoid negative margins that it believed Amazon was incurring as it sold certain bestselling ebooks below cost, but Apple denies that it sought to do so by ‘driving prices’ above $9.99.”
Apple also states that it “manufactures mobile devices that are used to “distribute, store and access digital media,” through the iOS platform. Apple admits that consumers can download digital media through, among other e-retailers, Apple’s App Store and the iTunes Store. Apple denies, however, that it is a “dominant manufacturer of such devices.”
On a couple of occasions Apple refers to allegations that came from excerpts of alleged news articles as well as references in the Steve Jobs biography by Walter Isaacson.
Apple claims that the US government has sided with monopoly rather than competition in bringing a case of ebook price-fixing against Apple, the company said in a filing on Tuesday before a federal court.
The Department of Justice filed in April an antitrust lawsuit against Apple and five large publishers, accusing the companies of working together to raise prices of ebooks, in retaliation for competitor Amazon.com pricing most ebooks at US$9.99 beginning in late 2007.