U.S. Says Apple Conspired on e-book Pricing

{{Apple Inc conspired with publishers to raise the price of e-books in a scheme costing consumers “hundreds of millions of dollars,” a U.S. government lawyer said.}}

A three-week trial got under way before a federal judge in New York in a case pitting the Justice Department against the popular iPad and iPhone maker that could shine a light on the secretive Silicon Valley giant’s business practices.

“Apple told publishers that Apple – and only Apple – could get prices up in their industry,” Lawrence Buterman, a lawyer at the Justice Department, said during opening arguments.

The trial came more than a year after the Department sued Apple and five of the largest U.S. publishing houses, accusing them of working together illegally to increase e-book prices and undo Amazon.com Inc’s market control.

Orin Snyder, an attorney for Apple, described the case as “bizarre.” Apple acted in its own business interests in negotiating deals with publishers in the run up to the debut of its iPad in January 2010, he said.

“What the government wants to do is reverse engineer a conspiracy from a market effect,” Snyder said.

Apple is going to trial alone after the five publishers agreed to eliminate prohibitions on wholesale discounts and to pay a collective $164 million to benefit consumers.

The five publishers were Pearson Plc’s Penguin Group, News Corp’s HarperCollins Publishers Inc, CBS Corp’s Simon & Schuster Inc, Hachette Book Group Inc and MacMillan.

The U.S. government is not seeking damages, but instead an order blocking Apple from engaging in similar conduct. However, if Apple is found liable, it could still face damages in a separate trial by 33 state attorneys general, who would seek civil penalties on behalf of consumers.

{reuters}