Reuters reports that U.S. District Judge Denise Cote, who is set to oversee the ebook conspiracy trial against Apple on June 3, expressed an early opinion that the Department of Justice will clearly be able to show that Apple conspired with five publishers to raise ebook prices. She glimpsed at a portion of the evidence on Thursday, but quickly noted that her pre-trial view was not a final verdict.
"I believe that the government will be able to show at trial direct evidence that Apple knowingly participated in and facilitated a conspiracy to raise prices of ebooks, and that circumstantial evidence in this case, including the terms of the agreements, will confirm that," Cote said.
Naturally Apple doesn't share the same opinion. In fact, the company still doesn't think it's done anything wrong. "We strongly disagree with the court's preliminary statements about the case today," said Apple lawyer Orin Snyder.
Apple is the last to stand against the Department of Justice's accusations of conspiracy, abandoned by book publishers HarperCollins, Hachette Book Group, Macmillan, Pearson’s Penguin Group and Simon & Schuster who settled with the Department of Justice and a number of states out of court. Macmillan was actually the last publisher to cave in, reporting on February 8 that the company could no longer afford to defend itself.
"Our company is not large enough to risk a worst case judgment," said Macmillan’s chief executive John Sargent in a letter to authors, illustrators and agents. "In this action the government accused five publishers and Apple of conspiring to raise prices. As each publisher settled, the remaining defendants became responsible not only for their own treble damages, but also possibly for the treble damages of the settling publishers (minus what they settled for). A few weeks ago I got an estimate of the maximum possible damage figure. I cannot share the breathtaking amount with you, but it was much more than the entire equity of our company."
Back in March, the Justice Department argued that Apple CEO Tim Cook likely has relevant information about the company's iPad-based entry into the ebook market in April 2010. It also argued that Cook likely had conversations about the ebook market with former Apple CEO Steve Jobs before he passed away a year later in 2011.
Naturally Snyder retaliated, saying that the Department of Justice was on a fishing expedition. But Judge Cote sided with the government agency, saying that the death of Jobs is a key reason for questioning Cook. "Because of that loss, I think the government is entitled to take testimony from high-level executives within Apple about topics relevant to the government case [as well as to counter Apple's defense arguments]," she said.
Last year the Department of Justice filed an antitrust lawsuit against Apple and the five publishers for conspiring to raise prices on ebooks. The publishers reportedly feared Amazon who was dominating the eBook market with its Kindle readers and low ebook prices. In preparation of launching the first iPad tablet, Apple supposedly suggested and then agreed to an Agency model – meaning the publishers set the eBook prices, not the retailer – but only if the publishers force other retailers to do the same. After the iPad launched, eBook prices began to inflate across the board.
Cook will reportedly be required to sit for a four-hour deposition. The case is United States v. Apple Inc et al, U.S. District Court, Southern District of New York, No. 12-02826.
