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Showing posts with label antitrust. Show all posts
Showing posts with label antitrust. Show all posts

Sunday, June 2, 2013

Apple antitrust suit over e-books set for NY trial

NEW YORK (AP) — In a civil case where the words of Steve Jobs play prominently, the government and Apple Inc. are set to square off over allegations that Apple Inc. conspired with the country's largest book publishers to make consumers pay more for electronic books.

U.S. District Judge Denise Cote is scheduled to begin hearing the price-fixing case Monday in federal court in Manhattan.

The trial stems from an antitrust lawsuit brought last year by the Justice Department, which accused Apple of helping hatch the scheme at a meeting with publishers in 2009 as it was preparing to launch the iPad. Its purpose was to force Seattle-based Amazon.com — the marketer of Kindle e-book readers — to raise the $9.99 price it had set for the most popular e-book titles because that was substantially below their hardcover prices, the government says.

"Apple wanted to sell e-books to the public, but did not want to compete against the low prices Amazon was setting," the government wrote in its court papers. "Apple knew that the major publishers also disliked Amazon's low prices and saw Apple's potential entry as a pathway to higher retail prices industrywide."

The Justice Department accuses the conspirators of agreeing that instead of selling books to retailers and letting them decide what price to charge readers, the publishers would convert the retailers into "agents" who were restricted from lowering the publisher-set retail price. The arrangement guaranteed Apple a 30 percent commission on each e-book it sold.

The government has alleged that the scheme cost consumers tens of millions of dollars by adding $2 or $3, sometimes as much as $5, to the price of each e-book. It also argues part of the proof is Jobs' own account of the arrangement.

The former Apple CEO "conceded the price-fixing conspiracy when, the day after publicly announcing Apple's forthcoming iBookstore, he explained to his authorized biographer that Apple had told the publishers, 'We'll go to the agency model, where you set the price, and we get our 30 percent, and yes, the customer pays a little more, but that's what you want anyway,'" the government says in court papers.

In its papers, lawyers for Apple have accused the government of basing its case "on mere allegations, faulty assumptions and unfounded conclusions." The Cupertino, Calif.-based company has denied claims that its agreements required publishers to force Amazon to charge more for e-books.

The agreements "required no such thing," the defense papers say. "They set forth the terms of Apple's business relationship with each publisher; they placed no constraints on how a publisher should deal with other retailers, including Amazon."

The government has reached settlements with the five publishers named in the suit — Hachette, HarperCollins, Simon & Schuster, Holtzbrinck Publishers, doing business as Macmillan, and The Penguin Publishing Co. Ltd., doing business as Penguin Group — that requires them to lift restrictions on discounting and other promotions they had imposed on e-book retailers. The judge has urged Apple to settle, even suggesting at a recent pretrial hearing that its chances of prevailing at trial are slim.

"I believe that the government will be able to show at trial direct evidence that Apple knowingly participated in and facilitated a conspiracy to raise prices of e-books, and that the circumstantial evidence in this case, including the terms of the agreements, will confirm that," she said.

On May 22, British publisher Pearson's Penguin unit announced it would pay $75 million in damages plus costs to settle claims by 33 attorneys general of 33 states and a class-action lawsuit by consumers alleging price-fixing in the e-book market.


Via Yahoo News!

Thursday, May 5, 2011

Justice Department opens antitrust inquiry into BCS process

The Bowl Championship Series determines which college football teams play for the national title and trophy.The Bowl Championship Series system makes it hard for some college teams to qualifyMillions of dollars in revenue are at stake in the football bowl selection processAssistant Attorney General Varney seeks an explanation

(CNN) -- In a letter to the NCAA disclosed Wednesday, the Justice Department said it has received several requests for an antitrust investigation into the current Bowl Championship Series system, and it wants information to help it decide what to do.

That controversial system makes it very difficult for teams in some athletic conferences to qualify for major bowl games, potentially costing millions of dollars in revenue to those not chosen.

"Serious questions continue to arise suggesting that the current BCS system may not be conducted consistent with the competition principles expressed in federal antitrust laws," Assistant Attorney General Christine Varney told NCAA President Mark Emmert.

The decision to release the letter came hours after Sen. Orrin Hatch, R-Utah, a major opponent of the current system, demanded further consideration of the issue in a face-to-face appearance with Attorney General Eric Holder at a Senate Judiciary Committee hearing.

Holder responded by disclosing the Justice Department had sent a letter to the NCAA on the issue Tuesday.

In her letter, Varney asked Emmert to explain why college football does not have a playoff when so many other college sports do. She also asked what steps, if any, the NCAA has taken to create a playoff, and whether the NCAA has determined that there are aspects of the BCS system that do not serve interests of fans, colleges, universities, and players.

Officials acknowledge the NCAA is not legally required to respond, although lawyers following the case expect the association to do so.

Antitrust lawyers have been watching the debate grow for more than two years, to see whether the Justice Department will jump into the case.

One antitrust expert who declares himself neutral in the case says he doubts Justice will launch a probe because it has a full plate of more pressing issues.

"There is a problem, but not an antitrust problem," said Gordon Schnell of the New York firm Constantine Cannon. A court could never require a football playoff, but they could break up the current BCS system, he said.

Currently, the BCS system limits automatic bids to the winners of the Big Ten, Big East, Big 12, Atlantic Coast Conference, Pac 10 and the Southeast Conference, thereby leaving out other conferences, including almost all schools in the Rocky Mountain Region. Only two remaining at-large spots are available to all other colleges and universities.

CNN's Terry Frieden contributed to this report


CNN


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