Apple’s eBook appeal is just getting started. Photo: Apple
Apple was found guilty last year of colluding with publishers to raise ebook prices, but now that the antitrust case is being heard by the Second U.S. Court of Appeals, two out of the three appellate judges are starting to see things Apple’s way.
The appeals case kicked off this morning with Deputy Solicitor General Malcolm Stewart attempting to compare Apple to a driver taking a narcotics dealer to a drug pick up. The analogy was supposed to make the point that if Apple knew publishers were conspiring to fix ebook prices, it was just as guilty as them for facilitating the conspiracy. However, Fortune reports that Judge Denis Jacobs laughed off the analogy, pointing out that drug trafficking is one of the few “industries in which the law does not look with favor or new entrants.”
The comment drew a chorus of laughs in the courtroom, but Judge Jacob’s concerns went even further, as the the judge questioned whether the government should have even brought the case to court.
While Apple decided to hold out for a court battle — that it eventually lost — five of the publishers involved in the iBookStore price fixing antitrust case have already reached settlements with the DOJ. Two of those publishers, Penguin and Macmillan, are already sending out emails to customers to notify them that they’re eligible to receive iTunes credit, or a check for the settlement.
The European Commission announced today that it has reached a deal with publisher Penguin regarding the e-book price fixing charges raised by the EU back in 2012.
Like the four other publishers charged with colluding with Apple to fix the price of e-books, Penguin has agreed to ditch Apple’s agency model for e-books that let publishers set prices for e-books while distributors like Apple, Amazon or Barnes & Noble get a cut of the sale.
Apple was found guilty of e-book price fixing by federal judge Denise Cote earlier this month, and it looks like the total bill for colluding with book publishers for the launch of the iBookstore will be pretty steep.
The five publishers in the case – Hachette, Penguin, Random House, HarperCollins and Simon & Schuster – have already paid out $166 million, according to figures obtained by GigaOm. Based on the settlement payments publishers have already shelled out, it looks like Apple might have to pay $500 million to the states and class action lawyers in the case.
Apple has been ordered to compensate three Chinese writers for infringing their copyrights when it made their books available on the App Store without first seeking their permission. The Cupertino company will pay more than ¥730,000 ($118,000) for the infringement.
Last year, Apple was hit with an antitrust case from the U.S. Department of Justice over the pricing scheme of e-books in Apple’s iBookstore. Since that time, 11 executives at Apple have already been deposed over the issue, but the Department of Justice is demanding Tim Cook be involved, and they just got their way.
U.S. District Judge Denise Cote granted the Justice Department’s request to get Cook to testify on the ebook antitrust case for four hours.
Walter Isaacson, the author of the best-selling biography about Apple co-founder and former CEO Steve Jobs, will not have to share his notes or testify in an ongoing lawsuit over alleged eBook price fixing between Apple and book publishers.
Lawyers wanted to see Isaacson’s notes from interviews with Jobs in an effort to establish Apple’s agreements with publishers, but Isaacson refused to hand them over, citing a New York law that allows journalists to shield their sources.
Apple has been having problems with Chinese writers suing for unlicensed eBook distribution in the App Store. After a group of writers asked Apple for 10 million yuan in damages for unlawfully distributing copyrighted works in certain Chinese apps, the court has forced Apple to pay a smaller settlement fee of 1.03 million yuan, which is only about $165,000.
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