Apple files appeal of 'radical' antitrust ruling

Apple files appeal of 'radical' antitrust ruling
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Apple is challenging a district court ruling that found it broke the law by conspiring to set the price of e-books.

District Court Judge Denise Cote’s July 2013 ruling against the tech giant was a “radical departure from modern antitrust law and policy,” the company said in a filing with the U.S. Court of Appeals for the Second Circuit, and “turns the antitrust laws upside down.”

“If allowed to stand, the ruling will stifle innovation, chill competition, and harm consumers. This Court should overturn it.”

Apple launched a store with thousands of electronic books along with the first iPad in 2010. That store included titles from the five major book publishers, which Apple said was necessary to fight the dominance of online retailer Amazon.

“Instead of a market dominated by a single retailer — Amazon — controlling 9 out of 10 e-book sales, a competitive market emerged where output exploded and the average price dropped,” the company said.

Cote last summer found Apple guilty of playing a “central role” in a conspiracy with the book publishers to fix prices and undercut Amazon. According to her decision at the time, the conspiracy “would not have succeeded as it did” without Apple’s involvement.

She pointed to a set of meetings Apple executives held with major publishers in late 2009, when she said Apple joined the conspiracy.

Apple described the events in its appeal as an “introductory round of individual meetings” and merely “preliminary brainstorming sessions.”

The company added that it had “no knowledge” that publishers were engaged in a plot to fix e-book prices at the time, and was just trying to “take advantage of retail market discord” by offering a business model to the publishers.

Apple also claims that it should not have been persecuted for antitrust activity because its entrance into the e-book market “kick-started competition” and was not anticompetitive.

Since charges were filed in 2012, the publishing companies have agreed to pay more than $166 million to settle related antitrust charges.

Apple has repeatedly protested Cote’s ruling, which saddled the company with an antitrust monitor. Apple says that the monitor, Michael Bromwich, is biased against the company and has a financial interest in staying on.

— This story was updated at 2:29 p.m.