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'Apple participated in a conspiracy to raise prices of ebooks': US Judge

'Apple participated in a conspiracy to raise prices of ebooks': US Judge

By Reuters | Updated: 24 May 2013 17:16 IST

In an unusual move before a trial, a federal judge expressed a tentative view that the U.S. Justice Department will be able to show evidence that Apple engaged in a conspiracy with publishers to increase e-book prices.

U.S. District Judge Denise Cote, who is set to oversee a trial on June 3, gave her view during a pretrial hearing on Thursday.

While she stressed that the view was not final and that she had read only some of the evidence so far, her comments could add to pressure on Apple to settle the lawsuit, in which the Justice Department accuses the company and five publishers of conspiring to fix e-book prices.

"I believe that the government will be able to show at trial direct evidence that Apple knowingly participated in and facilitated a conspiracy to raise prices of e-books, and that the circumstantial evidence in this case, including the terms of the agreements, will confirm that," Cote said.

Orin Snyder, a lawyer for Apple, said in a statement, "We strongly disagree with the court's preliminary statements about the case today."

The Justice Department declined to comment.

Apple is the sole defendant remaining after litigation was settled by five publishers - Pearson Plc's Penguin Group, News Corp's HarperCollins Publishers Inc, CBS Corp's Simon & Schuster Inc, Hachette Book Group Inc and MacMillan.

Thursday's hearing had largely focused on pretrial matters and motions, such as which expert witnesses could testify and how long the trial would last.

Cote, who is hearing the case without a jury, said at the start of the proceedings that she was working on a draft of a written decision that she would expand and publish after the trial.

Toward the end of the hearing, Mark Ryan, a lawyer with the Justice Department, asked if she would be able to share any of her thoughts on the case so far.

Cote then gave what she called her "tentative view," which she said was based largely on material submitted as evidence - emails and correspondence that took place over a six-week period between December 2009 and January 2010.

She emphasized that no final decision would be made until after the trial takes place. And she also said she had not read many of the affidavits submitted in support of the parties' positions.

Snyder, of Gibson, Dunn & Crutcher, in his statement disputed Cote's opinion, saying the evidence would show Apple benefited consumers by providing competition in an emerging market.

"We look forward to presenting our evidence in open court and proving that Apple did not conspire to fix prices," he said.

Pearson had been set to go to trial alongside Apple on remaining claims asserted by states attorneys general. On Wednesday, Pearson agreed to a proposed $75 million settlement with the states and plaintiffs in consumer class-action lawsuits.

The case is United States v. Apple Inc, U.S. District Court, Southern District of New York, No. 12-02826.

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