Apple presses Supreme Court to review ebooks price fixing case
Jan 22, 2016 07:50 AM EST
Apple Inc. tries to overturn a ruling that it fixed ebook prices. The company filed a 12-page brief to the U.S. Supreme Court, pressing their arguments for the high court to review the company's e-book price fixing case.
In the new filing reported by Fortune, Apple insisted that the federal government and a lower court made a crucial legal error. The company warned the result could be a "long shadow" on the digital economy.
The filing is part of a long running legal battle in which Department of Justice says Apple organized a plot by book publishers to fix prices and wrest control of the e-book market away from Amazon.
The legal battle started in 2012 when federal and state authorities charged Apple and five publishers with conspiring to end Amazon's policy of charging $9.99 for electronic versions of new releases and bestsellers, MediaPost reported.
The 2012 lawsuit said that Apple and publishers forged an agreement to shift to an "agency" model to market e-books. The new model allowed the publishers set prices and retailers like Apple and Amazon act as agents, selling the ebooks for commission.The agency model forced Amazon to raise e-book prices to $12.99 and higher.
Apple lost in lower court battle in 2013. The company was slated to pay a $450 million penalty under a settlement with class action lawyers. The ruling came from the U.S. District Court Judge Denise Cote and affirmed in 2015 by the 2nd Circuit Court of Appeals.
Apple initially petitioned the high court in October 2015. But the Department of Justice filed papers to the Supreme Court in December 2015, asking the high court to refuse to hear Apple's appeal. The DoJ said in the brief that the antitrust ruling against Apple was "supported by overwhelming evidence."
The DoJ said in the opposition brief that Apple's appeal is based on a "sanitized version" of the fact, Publisher Weekly reported. The DoJ attorneys argue that the law is clear: "when a horizontal conspiracy is subject to per se condemnation, a vertically-related firm that joins the conspiracy is liable to the same extent as its co-conspirators."
In the new brief filed on January 15, Apple said the DoJ's December submission is wrong, because it makes the legal mistake classifying Apple as a horizontal competitor. Apple was not part of a horizontal conspiracy involving competitors, but instead was part of a vertical agreement involving suppliers.
In the filing, Apple denied the company's conspiracy with the books publishers, including a notorious series of dinners with the publishers to discuss prices.
The Supreme Court's decision whether or not to hear the appeal will likely come in the next few weeks.