July 2015

In a 2-1 opinion yesterday, the Second Circuit affirmed the bench trial findings of Judge Cote that Apple orchestrated a price fixing conspiracy with book publishers to collectively raise the $9.99 per-book price that Amazon was charging and that publishers believed was damaging to their business in the long term. Apple signed contracts with the publishers for its own e-bookstore under an “agency model” (in which the publishers set the price and Apple would take a cut), and those contracts included a “most-favored nations” clause requiring the publishers to price the books in Apple’s store at the lowest offered anywhere else. The Second Circuit agreed with Judge Cote that the intended effect of these terms was to compel the publishers to act together to challenge Amazon’s flat, $9.99 pricing:
Continue Reading Second Circuit Affirms Antitrust Ruling Against Apple in E-Books Case