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Apple found liable for conspiring to fix e-book prices

Apple found liable for conspiring to fix e-book prices

A woman holds up an iPad with the iTunes U app after a news conference introducing a digital textbook service in New York in this January 19, 2012, file photo. Photo: Reuters/Shannon Stapleton/Files

By Nate Raymond

NEW YORK (Reuters) – A judge who found Apple Inc liable for conspiring to fix e-book prices entered an injunction on Friday to bar the iPad maker from further antitrust violations.

District Judge Denise Cote in Manhattan said Apple could not enter into agreements with five major U.S. publishers that would impede its ability to reduce e-book retail prices or offer price discounts.

The judge also said she would appoint an external monitor to review Apple’s antitrust compliance policies, procedures and training for two years.

The terms of the judgment will expire after five years, but Cote’s order allows for extensions in one-year increments if necessary.

The injunction followed a July 10 ruling by Cote finding Apple conspired with five publishers to undermine e-book pricing established by the dominant retailer in the market, Amazon.com Inc.

The five publishers, all of which have settled with regulators, include Lagardere SCA’s Hachette Book Group Inc, News Corp’s HarperCollins Publishers LLC, Penguin Random House LLC, CBS Corp’s Simon & Schuster Inc and Verlagsgruppe Georg von Holtzbrinck GmbH’s Macmillan.

The U.S. Justice Department, which sued Apple in April 2012, had initially sought an even broader injunction that could have touched on the company’s agreements with suppliers of other types of content, such as movies, music and TV shows.

But Cote had made clear at a hearing last week that she would not go that far, saying she wanted the injunction “to rest as lightly as possible on how Apple runs its business.

The Justice Department nonetheless welcomed the injunction.

“Consumers will continue to benefit from lower e-books prices as a result of the department’s enforcement action to restore competition in this important industry,” Assistant Attorney General Bill Baer said in a statement.

Apple said on Friday that it would appeal the injunction.

“Apple did not conspire to fix e-book pricing,” said company spokesman Tom Neumayr. “The iBookstore gave customers more choice and injected much-needed innovation and competition into the market.”

Shares of Apple were down 0.1 percent at $494.64 in morning trading.

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

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