Business and Economics

Indiana Claims Victory In Apple Ruling

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July 11, 2013 — Indiana’s attorney general says the State is joining other parties in their legal victory against Apple Incorporated in a federal collusion case.

After a federal judge ruled Wednesday that Apple Inc. colluded to raise E-book prices, Indiana and 32 other states joined the U.S. Department of Justice to declare a legal victory.

The judge ruled against Apple for conspiring with publishers to inflate retail prices of electronic books, or e-books, in a lawsuit filed by Indiana Attorney General Greg Zoeller along with 32 other states and the Justice Department last year. He says, “the U.S. District Court for the Southern District of New York found that Apple ‘played a central role in facilitating and executing’ the conspiracy to raise E-book prices, and that ‘Apple’s orchestration’ of the conspiracy was necessary to its success.”

Zoeller says, “Federal and state laws are designed to ensure the market remains competitive and fair. This ruling emphasizes the importance of accountability in the E-book marketplace and highlights how the states and the federal government can work together to protect consumers.”

The Attorney General says the legal complaint contended that publishers and Apple used contracts that forced e-book retailers to sell their products at the same price, “therefore eliminating price competition. Under the agreement, Apple was guaranteed a 30 percent commission on e-books sold through its iBookstore.”

Lawsuits against Apple and publishers followed a two-year investigation by the U.S. Department of Justice’s Antitrust Division and attorneys general offices, including Zoeller, who says, “For years, retailers sold e-books through a traditional wholesale-retail distribution model under which retailer outlets like Amazon or Barnes & Noble set prices. In 2010, before Apple entered the e-book market, bestsellers cost $9.99 which was a price set by Amazon.
According to the investigation, publishers conspired with Apple to shift their distribution model to allow publishers to set prices and sell e-books directly to consumers. This change artificially increased prices which accounted for the new bestseller pricing of $12.99 and $14.99.”

Attorney General records show the U.S. Department of Justice, Indiana and other states settled claims with five major U.S. publishers including Hachette Book Group Inc., HarperCollins Publishers L.L.C., Penguin Group (USA) Inc., Simon & Schuster Inc., and Holtzbrinck Publishers LLC d/b/a Macmillan for allegations relating to the Apple case. Zoeller said together those settlements will result in Indiana consumers receiving $2.7-million in refunds as part of more than $166-million for consumers nationwide.

For more information about the refund process visit www.ebooksagsettlements.com or contact the Indiana Attorney General’s office at 800-382-5516.

Zoeller says consumer damages determination will occur in a separate trial.

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