Apple to pay US$450 million settlement after US Supreme Court rejects e-book price-fixing appeal

The US Supreme Court rejected an appeal from Apple on Monday and left in place a ruling that the company conspired with publishers to raise electronic book prices when it sought to challenge Amazon.com’s dominance of the market.

The justices’ order on Monday lets stand an appeals court ruling that found Cupertino, California-based Apple violated antitrust laws in 2010.

Apple wanted to raise prices to wrest some book sales away from Amazon, which controlled 90 per cent of the market and sold most popular books online for US$9.99. Amazon’s share of the market dropped to 60 per cent.

The 2-1 ruling by the New York-based appeals court sustained a trial judge’s finding that Apple orchestrated an illegal conspiracy to raise prices. A dissenting judge called Apple’s actions legal, “gloves-off competition”.

Apple, in its petition asking the high court to hear the case, said the June decision by the 2nd US Circuit Court of Appeals in New York upholding a judge’s ruling that Apple had conspired with the publishers contradicted Supreme Court precedent and would “chill innovation and risk-taking”.

The 2nd Circuit’s ruling followed a 2013 decision by US District Judge Denise Cote after a non-jury trial that Apple played a “central role” in a conspiracy with publishers to eliminate retail price competition and raise e-book prices.