US judge says she'll limit Apple's e-book pricing power

Beijing, August 10 - According to foreign media reports, Judge Denise Cote of the U.S. District Court for the Southern District of New York said on Friday that due to Apple's collusion with book publishers to raise the retail prices of e-books violating the "U.S. Antitrust Law", she is considering imposing severe restrictions on Apple.

Cote stated that she is weighing whether to restrict Apple from entering into new agreements with publishers for five years, which would prevent Apple from participating in e-book pricing. Cote pointed out: "My main goal is to ensure that no collusive pricing activities occur again in the e-book market."

On the previous Friday, the U.S. Department of Justice and 33 state governments submitted a series of sentencing recommendations to the U.S. District Court for the Southern District of New York, requesting the presiding judge who originally ruled in the Apple e-book price-fixing case to order Apple to cancel its existing agreements with five major publishers. Cote indicated that she might not fulfill all the suggestions put forward. She may not require Apple to hire an external monitor responsible for overseeing Apple’s antitrust policies.

In April 2012, the U.S. Department of Justice sued Apple for allegedly conspiring with book publishers to increase the retail prices of e-books set by Amazon on its website. The DOJ stated in the lawsuit that the prices of newly released and best-selling e-books were raised from $9.99 per book to $12.99 or $14.99.

On July 10, Cote ruled that Apple had violated antitrust laws and played a "key role" in conspiring with the five major book publishers, while the latter have so far paid out $166 million in compensation. Apple criticized the DOJ's application for court judgment regulating Apple's e-book sales as "too harsh and punitive".

Despite the five publishers agreeing to pay compensation, none of them admitted fault. Cote pointed out: "The publishers lack remorse. They were playing a disorderly game and participated in collusive pricing."

At the hearing held on Friday, Cote stated that she is considering restricting the types of new agreements Apple can enter into with publishers for five years, which is also the court judgment result the DOJ is trying to seek. Cote pointed out that for the next two years, Apple will be unable to enter into new agreements with publishers, which will limit Apple's ability to participate in e-book pricing. Afterward, Apple can intermittently enter into new agreements with publishers, with the frequency controlled at about once every six months.

Cote pointed out: "This means that Apple cannot simultaneously enter into new agreements with the aforementioned five major publishers."

The U.S. Department of Justice also requested the appointment of an external monitor responsible for overseeing Apple's antitrust policies, with the monitor's salary borne by Apple. In response, Cote stated that she prefers requiring Apple to establish a "proactive" antitrust commitment project within the company for self-regulation. She said: "On this point, I don't want to go too far."

The legal team representing the interests of U.S. states and consumers has yet to publicly disclose the specific losses incurred by consumers due to Apple's conspiracy to control e-book prices. Apple's representative lawyer Orin Snyder stated at the hearing on Friday that the loss might reach "hundreds of millions of dollars."

Snyder pointed out that Apple opposes class-action lawsuits by consumers. Because recent policies issued by the U.S. Supreme Court have already restricted the rights of defendants to file class-action lawsuits.