BUSINESS

NY judge denies Apple Inc. request to suspend her ruling in e-books antitrust case

08/09/2013 03:51 EDT | Updated 10/09/2013 05:12 EDT
NEW YORK, N.Y. - A judge on Friday refused a request by Apple to temporarily suspend her ruling that it violated antitrust laws by conspiring with publishers to raise electronic book prices in 2010.

Judge Denise Cote, ruling from the bench in Manhattan federal court, declined to withdraw the effect of last month's ruling while Cupertino, Calif.-based Apple Inc. appeals.

The maker of iPods, iPads and iPhones continues to fight what it calls "false accusations."

The judge ruled last month that Apple had conspired with publishers to spoil the $9.99 e-book price Amazon.com had established. The trial revealed e-book prices rose after Apple signed with publishers so-called agency agreements, in which publishers rather than retailers set prices for each title.

Earlier this week, publishers that have settled an e-book pricing dispute with the federal government objected to penalties the government wants to impose on Apple, saying they will hurt publishers rather than the personal electronics company.

In court papers submitted Wednesday, five publishers said the government's plans to ban Apple from engaging in agency agreements for five years would not restrict Apple's pricing behaviour.

"Rather, under the guise of punishing Apple, they effectively punish the settling defendants by prohibiting agreements with Apple using an agency model," lawyers for the publishers said.

As recommended by the government, a court order would require Apple to terminate any agency agreement with publishers.

The publishers said the proposed remedy conflicts with consent decrees the publishers agreed to when they settled their cases with the government. Those deals permit the publishers to enter agency deals with e-book retailers with some agreed-to limitations.

The publishers said the Department of Justice "induced publishers to enter these agreements on the condition that publishers could continue to use the agency model." As a result, the court papers said, the publishers entered agency agreements with Apple and other e-book retailers under the agency model. Breaking those deals would be costly and disrupt business, they said.

The court papers were submitted on behalf of HarperCollins Publishers LLC, Hachette Book Group Inc., Simon & Schuster Inc., Holtzbrinck Publishers LLC and Penguin Random House LLC.

A Department of Justice spokeswoman has said the proposed settlement with Apple would prohibit the company from entering deals that limit retail price competition during a defined period.