Apple’s lawyers may want to make vacation plans now, because their docket just cleared.

After Apple entered the market, and the publishers hiked prices in unison, consumers paid average increased prices of 18 percent across the board, reports Ars Technica.

The scheme almost seems too obvious not to discover. Much like it’s App Store, Apple, using the agency model, took a commission on each e-book sale, with prices set by the publisher. Other outlets bought the books at a wholesale rate and set their own prices, at least, until the major publishers, in unison, forced them to adopt the agency model and higher prices.

In the months leading up to the release of the iPad, Apple not only negotiated the terms of their own agreement, but also included a Most Favored Nations (MFN) clause in the contracts, ensuring that other outlets could not sell at a lower price. The company also ensured publishers that their competitors would sign similar agreements in unison. When one publisher, Random House, held out, Apple rejected their app from the App Store in order to force them to comply.

If all of that wasn’t enough evidence, Steve Jobs, the late tech visionary and in-house counsel’s worst nightmare, not only sent emails to the publishers hinting at the price fixing scheme, but as Judge Cote noted:

The import of Jobs’s statement was obvious. On January 29, the General Counsel of S&S [Simon & Schuster] wrote to S&S CEO Carolyn Reidy that she “cannot believe that Jobs made the statement” and considered it “[i]ncredibly stupid.”

A second trial on damages is expected to follow.

Related Resources:

  • United States v. Apple (Southern District of New York)
  • Is Apple Resisting E-Book Antitrust Settlement? (FindLaw’s In House Blog)
  • Judge Upholds Uncontested Will Written on Android Tablet (FindLaw’s Technologist Blog)

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