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Apple, Penguin, Macmillan to face feds in court - next year

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Apple and book publishers are facing a trial next year over the allegations they colluded on ebook prices to squeeze Amazon out of the market.

Judge Denise Cote told the fruity firm and the two bookhouses that haven't settled, Penguin and Macmillan, that the case will start in June next year, Bloomberg reported.

Three other publishers – Simon & Schuster, Hachette Books and HarperCollins – have all settled the case, which was brought by the Department of Justice under competition laws.

That suit was quickly followed by another from 15 US states and Puerto Rico, which was looking for damages. The three publishers who settled with the government also settled that case and the Connecticut assistant Attorney General Gary Becker said other states were likely to sign up.

Apple was pushing for a quick trial and for quick discovery as well, trying to get the case over and done with as quickly as possible. The iPhone-maker wanted discovery, when evidence is found and presented, to finish up at the end of the year, but the government is pushing for March 2013.

"Apple's suggestion that the United States and Plaintiff states have had the bulk of the discovery they need as a result of pre-filing investigations is overstated," the DoJ said in a filing. "There is much yet to be learned about the scope and identity of individuals who participated in the conspiracy described in the complaints before the court and a March 22 deadline will give the plaintiffs a fair opportunity to do so."

Apple denies all the collusion claims and has said that far from being anticompetitive, its foray into the ebook market broke up Amazon's monopoly in the market.

Before Apple came along, publishers were selling their books at set prices to shops, which then set the price, allowing Amazon to discount heavily to encourage people to buy Kindle ereaders and to carve out a hefty slice of the market. This kind of selling is usually short-lived, and usually takes place when enough other products have been sold or the company is comfy in the sector.

However, publishers were afraid that people would get used to cheaper books and refuse to pay more and were also worried that everyone would end up with a Kindle and therefore stop buying books from anyone other than Amazon.

Apple wanted its contracts done agency-style, where the publishers set the price and Apple then took a cut of the sales, allowing them to push the price of ebooks back up. The case hinges on whether the publishers then colluded on the prices they set, which qualifies as anticompetitive behaviour. ®

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