For Apple, much to gain in fighting e-books case

Apple couldn’t have been too surprised on Wednesday when a judge slammed the company for violating antitrust laws over e-book pricing - the judge had warned in May that she believed the government could prove its case.

Accused of playing a central role in a conspiracy with publishers to eliminate retail price competition and raise e-book prices, Apple says it has done nothing wrong.

But in addition to defending its honour, the US tech giant has strategic reasons not to settle and to continue fighting the decision as it has said it will do.

Chief among those is preserving its negotiating power in future content deals and its ability to control every aspect of its online stores, including pricing.

Responding to aggressive forays by Google and Amazon.com into online video and music services, Apple is in discussions with Hollywood studios and record companies. It may fear that caving to the Justice Department on e-books will embolden its sparring partners, business and legal experts say.

A key issue is the use of the so-called most-favoured nation status - part of its agreement with publishers, which gives Apple the right to match lower prices offered by a competitor operating under the wholesale model such as Amazon.