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Judge: Ample evidence that Apple “knowingly joined” e-book conspiracy

Apple hasn't been found guilty yet, but the judge's comments don't bode well.

Judge: Ample evidence that Apple
Aurich Lawson

Apple is not officially on the hook yet for allegedly colluding with publishers to fix e-book prices, but US District Judge Denise Cote had some harsh words about the company's actions. Cote denied Apple and five publishers their request to have a class-action suit over the alleged price fixing thrown out on Tuesday, writing (PDF) that it certainly appears as if Apple and the publishers did not act as innocently as they claim when it came time to sell e-books on the iBookstore.

The class-action suit in question is the one brought by a number of US states, filed on the same day as the Department of Justice's own action against the companies. (The number of states involved in the class has since ballooned from 16 to 31.) An amended version of the complaint released last week revealed new details in the case, such as an e-mail from former Apple CEO Steve Jobs that implies that he was personally involved in the decision to push the "agency model" on e-book publishers. The e-mail doesn't explicitly show illegal actions, but does show that Jobs was thinking about many of the details that are now being argued in various lawsuits.

Cote apparently took note of it. In her opinion, she points out that Jobs' comment at the 2010 iPad launch—that e-book prices would all "be the same"—implies that publishers had indeed colluded to "raise eBooks' prices and that Apple intentionally and knowingly joined that conspiracy." She noted elsewhere that although Apple may not have had the same motivations to join the alleged conspiracy as the publishers, that doesn't mean Apple wasn't a participant.

Apple's view of its own actions is unsurprisingly different from Cote's. When the DoJ first filed its lawsuit in April, Apple issued a statement denying the conspiracy, arguing that it had actually done some good for the industry. "The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry," the company said. "Since then customers have benefited from eBooks that are more interactive and engaging. Just as we’ve allowed developers to set prices on the App Store, publishers set prices on the iBookstore."

Cote does note, however, that Apple disclosed parts of its pricing negotiations between publishers, which implies the company could have been working to get the publishers to agree to raise prices. "Apple contends that these were legitimate disclosures that Apple was entitled to use in order to gain leverage. Apple argues that Jobs’s statements that the customer would '[pay] a little more' and that prices would 'be the same' at Apple and Amazon were simply accurate descriptions of the MFN clauses and accurate predictions of the consequences of the Agency Agreements," Cote wrote. "[T]hese arguments misconstrue the standard for pleading an antitrust conspiracy in this district."

The opinion doesn't mean Apple is found "guilty" just yet, but it does mean the class-action suit will move forward. And when it does, it looks like things won't go down smoothly for Apple or the e-book publishers involved in the case. Apple could still settle, but it seems unlikely given its public position that it helped the e-book industry free itself from the shackles of Amazon's wholesale model.

Channel Ars Technica