Apple Loses Federal Appeal in E-Books Case

A federal appeals court upheld a 2013 decision finding Apple liable for conspiring with publishers to raise the price of e-books.

The 2-1 ruling by the Second US Circuit Court of Appeals in Manhattan follows three years of litigation, millions of dollars in legal fees and a bold decision by Apple to challenge the US Department of Justice to a trial, even after all the publishers with which it was accused of colluding had settled their cases. The iPhone maker is expected to pay $450 million, most of it to e-book consumers, as part of a November agreement with private plaintiffs and 33 states that joined the Justice Department’s 2012 lawsuit accusing Apple of violating civil antitrust law. The deal hinged on the outcome of the appeal. The penalty amounts to less than 3% of company’s profit in the quarter that ended in December.

Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division said, “We are gratified by the court’s decision. The decision confirms that it is unlawful for a company to knowingly participate in a price-fixing conspiracy, whatever its specific role in the conspiracy or reason for joining it. Because Apple and the defendant publishers sought to eliminate price competition in the sale of e-books, consumers were forced to pay higher prices for many e-book titles. I am proud of the outstanding work done by the trial team who initially established Apple’s liability and by the lawyers who defended the district court’s decision in this appeal. The Antitrust Division will continue to vigorously protect competition and enforce the antitrust laws in this important business, and in other industries that affect the everyday lives of consumers.”