United States v. Apple Inc.
| US v. Apple Inc., et al. The State of Texas, et al., v. Penguin Group Inc., et al., | |
|---|---|
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| Court | United States District Court for the Southern District of New York |
| Decided | July 10, 2013 |
| Case opinions | |
| U.S. District Court, N.Y.: Apple Inc. is in violation of the Sherman Act | |
| Court membership | |
| Judge(s) sitting | Denise Cote |
| Keywords | |
| Sherman Act | |
United States of America v. Apple Inc., et al., 12 Civ. 2862 (DLC), was a US antitrust case in which the Court held that Apple Inc. conspired to raise the price of e-books in violation of the Sherman Act.
The suit, filed in April 2012, alleged that Apple Inc. and five book publishing companies conspired to raise and fix the price for e-books in violation of Section 1 of the Sherman Antitrust Act. The publishers are Hachette Book Group, Inc., HarperCollins Publishers, Macmillan Publishers, Penguin Group, Inc., and Simon & Schuster, Inc. (collectively referred to as the Publisher Defendants). Only Apple proceeded to trial while the Publisher Defendants settled their claims.
The Publisher Defendants sold over 48% of all e-books in the U.S. in the first quarter of 2010. The Publisher Defendants along with Random House Publishing are the six largest publishers in the United States (collectively the Publishers) and are often referred to as the "Big Six" in the publishing industry. In 2009 Amazon.com Inc. had nearly 90% of the e-books industry. Amazon charged $9.99 for certain new releases and bestselling e-books which helped make it the market leader in the sale of e-books and e-readers with its Kindle.
Amazon's price point caused discontent among the Publishers. The Publishers believed that the low price point was a problem for their sales of more profitable hardcover books. Approximately every three months, the CEOs of the Big Six would meet in private dining rooms in New York restaurants "without counsel or assistant present, in order to discuss the common challenges they faced, including most prominently Amazon's pricing policies." The Publishers used several different strategies to fight against Amazon's pricing point, including selling e-books for the same price as their printed version through a continued wholesale model and "windowing" new releases. Windowing is a tactic that would delay the release of books to their e-book form for a certain window of time.
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