<p>Apple violated antitrust laws by colluding with publishers to raise electronic book prices when it entered a market in 2010 that had been dominated by Amazon.com, a federal appeals court said today.<br /><br /></p>.<p>The 2nd US Circuit Court of Appeals in Manhattan ruled 2-to-1 that a lower court judge was right to find Apple Inc violated the laws to upset Amazon.com Inc's control of the market.<br /><br />The appeals court also agreed that US District Judge Denise Cote was right to order injunctive relief to ensure the Cupertino, California-based company didn't commit additional violations of antitrust laws.<br /><br />An Apple lawyer said in an email that comment would be issued soon.<br /><br />Cote ruled against Apple after a civil trial in summer 2013. She ordered the technology giant to modify contracts with publishers to prevent price fixing and appointed a monitor to review the company's antitrust policies. The appeals court weeks ago upheld the appointment of the monitor.<br /><br />In a majority opinion written by Judge Debra Ann Livingston, the 2nd Circuit said Cote's finding that Apple orchestrated a conspiracy among publishers to raise electronic book prices was "amply supported and well-reasoned."<br /><br />"We also conclude that the district court's injunction is lawful and consistent with preventing future anticompetitive harms," the appeals court said.<br /><br />In a dissent, Judge Dennis Jacobs defended the actions Apple took as it fought to raise the price of e-books when Seattle-based Amazon had 90 per cent control of the market selling books online for USD 9.99.<br /><br />He said it was a mistake by Cote and his fellow appeals judges to assume "competition should be genteel, lawyer-designed, and fair under sporting rules, and that antitrust law is offended by gloves-off competition."<br /><br />In the majority opinion, though, Livingston wrote that it was "startling" that Jacobs would agree Apple intentionally organised a conspiracy among publishers to raise e-book prices and then say the company was entitled to do so because the conspiracy helped it become an e-book retailer.<br /><br />"Fundamentally, the dissent's theory that the presence of a strong competitor justifies a horizontal price-fixing conspiracy endorses a concept of marketplace vigilantism that is wholly foreign to the antitrust laws," Livingston wrote. "By organising a price-fixing conspiracy, Apple found an easy path to opening its iBookstore, but it did so by ensuring that market-wide e-book prices would rise to a level that it, and the publisher defendants, had jointly agreed upon."<br /><br />The US Justice Department and 33 states and territories originally sued Apple and five publishers. The publishers all settled and signed consent decrees prohibiting them from restricting e-book retailers' ability to set prices. Two publishers joined Apple's appeal.</p>
<p>Apple violated antitrust laws by colluding with publishers to raise electronic book prices when it entered a market in 2010 that had been dominated by Amazon.com, a federal appeals court said today.<br /><br /></p>.<p>The 2nd US Circuit Court of Appeals in Manhattan ruled 2-to-1 that a lower court judge was right to find Apple Inc violated the laws to upset Amazon.com Inc's control of the market.<br /><br />The appeals court also agreed that US District Judge Denise Cote was right to order injunctive relief to ensure the Cupertino, California-based company didn't commit additional violations of antitrust laws.<br /><br />An Apple lawyer said in an email that comment would be issued soon.<br /><br />Cote ruled against Apple after a civil trial in summer 2013. She ordered the technology giant to modify contracts with publishers to prevent price fixing and appointed a monitor to review the company's antitrust policies. The appeals court weeks ago upheld the appointment of the monitor.<br /><br />In a majority opinion written by Judge Debra Ann Livingston, the 2nd Circuit said Cote's finding that Apple orchestrated a conspiracy among publishers to raise electronic book prices was "amply supported and well-reasoned."<br /><br />"We also conclude that the district court's injunction is lawful and consistent with preventing future anticompetitive harms," the appeals court said.<br /><br />In a dissent, Judge Dennis Jacobs defended the actions Apple took as it fought to raise the price of e-books when Seattle-based Amazon had 90 per cent control of the market selling books online for USD 9.99.<br /><br />He said it was a mistake by Cote and his fellow appeals judges to assume "competition should be genteel, lawyer-designed, and fair under sporting rules, and that antitrust law is offended by gloves-off competition."<br /><br />In the majority opinion, though, Livingston wrote that it was "startling" that Jacobs would agree Apple intentionally organised a conspiracy among publishers to raise e-book prices and then say the company was entitled to do so because the conspiracy helped it become an e-book retailer.<br /><br />"Fundamentally, the dissent's theory that the presence of a strong competitor justifies a horizontal price-fixing conspiracy endorses a concept of marketplace vigilantism that is wholly foreign to the antitrust laws," Livingston wrote. "By organising a price-fixing conspiracy, Apple found an easy path to opening its iBookstore, but it did so by ensuring that market-wide e-book prices would rise to a level that it, and the publisher defendants, had jointly agreed upon."<br /><br />The US Justice Department and 33 states and territories originally sued Apple and five publishers. The publishers all settled and signed consent decrees prohibiting them from restricting e-book retailers' ability to set prices. Two publishers joined Apple's appeal.</p>