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Apple Facing High-Stakes Trial Over E-Book Price-Fixing



The Consumer Federation of America estimated in a letter last year to the Senate antitrust subcommittee that e-book price-fixing would likely cost consumers more than $200 million in 2012. State and federal antitrust laws allow plaintiffs to recover triple the amount of actual damages established at trial.

As the only remaining defendant in the U.S. government’s e-books antitrust case, Apple Inc appears headed for a high-stakes trial that could significantly increase the personal computer company’s liability in related litigation.

Reuters reports that Apple faces a June 3 trial date over civil allegations by the U.S. Department of Justice that it conspired with five publishers to raise the price of e-books and to fight the dominance of Amazon.com Inc.

On Friday, Macmillan became the fifth and final publisher to settle with the government. The Justice Department alleges that Apple came to agreements with each of the publishers meant to ensure that e-book prices at its iBookstore and other retailers would remain higher than those offered by Amazon.com.

At the Apple trial, to be overseen by U.S. District Judge Denise Cote in Manhattan, the Justice Department will seek not monetary damages but a judicial decree that Apple violated antitrust law, court papers said.

Among other things, government lawyers want the judge to issue an order enjoining Apple from engaging in any conduct similar to that alleged in the case. Such a judgment could make Apple vulnerable to steep damages in related litigation.

Apple and the publishers also face a class-action suit filed on behalf of consumers and a similar suit filed by dozens of state attorneys general. Neither suit puts a figure on the exact amount of damages sought.

The Consumer Federation of America estimated in a letter last year to the Senate antitrust subcommittee that e-book price-fixing would likely cost consumers more than $200 million in 2012. State and federal antitrust laws allow plaintiffs to recover triple the amount of actual damages established at trial.

If Apple loses against the Justice Department, those plaintiffs would be in a “powerful position” to win their cases, according to Harry First, a professor at New York University School of Law specializing in antitrust.

Under the Clayton Act, an antitrust statute, plaintiffs can use judgments obtained by the U.S. government as evidence against defendants.

If Apple loses, it is unclear whether both the states and the private plaintiffs will be able to seek and recover damages for the same conduct.

By contrast, if Apple were to prevail, it would cause “a lot more trouble” for the plaintiffs in the other cases, First said.

Apple declined to comment. It still may settle with the U.S. government.

In December, Apple and four publishers came to an agreement with European Union regulators over their antitrust probe into e-books. The fifth publisher, Pearson Plc’s Penguin group, also under investigation, was not part of the European deal announced in December.

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