Apple set to defend reputation in court over alleged e-book pricing conspiracy

By Randell Suba , Jun 03, 2013 07:47 AM EDT

Apple will appear in court, Monday, to defend its name against the accusations that it connived with publishers to bring the prices of e-books up.

The U.S. Department of Justice sued Apple and five book publishers in April 2012 faulting the companies for conspiring to set a higher price of e-books to outmaneuver Amazon and other competitors that sell at lower prices.

The book publishers - Penguin, Macmillan, HarperCollins, Hachette Book Group and Simon & Schuster - have settled the case with the government. Apple decided to protect its image and battle it out in a public courtroom trial in Manhattan.

"They're being accused of being a cartel rinagmaster and using their size to bring these other companies in line. Apple has invested a lot to create a reputation that is pro-consumer. But there could be a lot that comes out at this trial that hurts that image," said David Balto, an antitrust attorney and former policy director at the Bureau of competition under the Federal Trade commission, in an interview with the Los Angeles Times.

"We're not going to sign a settlement that says we did something we didn't do. So we are going to fight," said Tim Cook during the All Things D conference over the weekend.

One of the evidences that will be presented by the government against Apple will be Steve Job's own email exchanges with the owners of major book publishers.

"Throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99," stated an email of Jobs to James Murdoch, deputy COO of News Corp. that owns HarperCollins, disclosed in New York Times. This correspondence occurred in January 2010 a few weeks prior to the launch of the Apple iPad and the iBookstore.

The Justice Department also cited quotes from Jobs' own biography in its filing according to a BBC report. The Apple founder allegedly explained to his biographer that Apple talked to the publishers so they can use an "agency model" where the publishers will set their prices and Apple will get its share. Jobs knew the set prices will make customers pay more but argued that that is what the publishers want afterall.

The government said that Apple's moves concocted an effective way for publishers to increase prices and guaranteed companies that rival brands will implement the same scheme.

Apple has strongly denied the accusations saying that the e-mails of its deceased founder have been misinterpreted.

The latest legal battle is another part of Apple's stance to defend its name against other allegations that it uses commercial deals, tax shelters and patents to dominate markets and new businesses.

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