Apple likely to win in federal price-fixing case on e-books

Experts are saying Apple is likely to emerge victorious from a Department of Justice case regarding price fixing on e-books.

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Apple was accused of conspiring to fix and raise prices on e-books along with five major publishers. The DOJ has been investigating the issue since last year and officially filed its lawsuit yesterday. The entire filing is included below, and since its filing, sixteen U.S. states have joined the suit.

Last year, Apple switched its pricing structure with publishers to an agency model, allowing those publishers to set their own prices on e-books while giving Apple a standard cut of the revenue. However, the deal also stipulates that e-books sold through the iTunes store cannot be sold at a lower price anywhere else on the Internet.

A cadre of law professors has explained to Cnet reporters that precedents for the DOJ’s case may actually give Apple the upper hand.

In fact, a few of the J.D.s think the DOJ has a better case against the publishers than against Apple. Precedents include a 1982 case pitting the DOJ against IBM (the case was abandoned as being “without merit”) and the DOJ’s 2001 attempt to split up Microsoft à la the disassembling of the Ma Bell conglomerate.

“If the CEOs of the various publishers got together in hotel rooms to discuss prices, they are sunk,” said antitrust author and University of Hartford professor emeritus Dominick Armentano. As far as e-book economics are concerned, the DOJ would have a much easier time proving the publishers’ antitrust behavior and wrongdoing than Apple’s.

However, this doesn’t mean Apple is guaranteed a win in court. “I’m not saying that Apple can smile and walk away from this,” said Notre Dame law prof Joseph Bauer. “It’s just that the government will have to show that Apple had some kind of involvement in the original arrangement.”

Image courtesy of NADIIA IEROKHINA, Shutterstock