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Apple: If you find us guilty in ebook price-fix trial, EVERYONE suffers

Biz upstarts just wouldn't know what to do with themselves, sighs brief

Internet Security Threat Report 2014

Apple has claimed that ruling against it in its ebook price-fixing trial will have a "chilling effect" on how businesses enter new markets.

The fruity firm's legal beagle, Orin Snyder, said in closing arguments of the proceedings in New York that finding Apple guilty would "send shudders through the business community", according to court reporters.

"We submit a ruling against Apple on this record sets a dangerous precedent," he said.

Throughout the trial, brought by the Department of Justice over alleged price-fixing by the iPad maker in the ebook market, Apple has maintained that it just did what any business would do when getting into a market: negotiate with suppliers for the best possible prices.

In the case of digital tomes, Apple attempted to arrange the best deals possible with publishers, the court heard.

The DoJ accuses the Cupertino-based giant of conspiring with bookhouses Simon & Schuster, HarperCollins, Hachette, Penguin and Macmillan to set the price of digital books and cut into Amazon's dominance in the market.

When Apple came on the scene, publishers moved to agency model contracts, allowing them to set the price of ebooks, while Apple and the other booksellers took a cut.

This differed from the traditional wholesale model, where Amazon and other retailers controlled the prices after buying from the publishers at a cost price. But Amazon often sold books at or below cost, which made life difficult for new market entrant Apple, the trial heard.

All of the publishers settled with the US government outside of court.

Wrapping up the defence, Snyder claimed again that Apple "did not conspire with a single publisher to fix prices" and said that the DoJ's evidence was "ambiguous at best". He added that Cupertino had no idea that the bookhouses were discussing ebook prices.

"There is no such thing as a conspiracy by telepathy," he sneered.

But Mark Ryan, the justice department's lawyer, said there was no way that Amazon would have stopped charging the typical $9.99 for ebooks on its own.

"Only a united industry front could move Amazon off its price," he said.

"This is an old-fashioned, straightforward price-fixing agreement."

US District Judge Denise Cote is expected to make her ruling in the next few weeks. If the DoJ wins, it only wants to stop Apple from signing agency contracts for two years and ban the firm from adding the controversial “most-favoured nation” clause – which forbade publishers from offering better prices to other sellers - to deals over the next five years.

However, the fruity firm will face financial sanctions in a separate case brought by 33 state attorneys-general. ®

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