United States v. Apple (2012)

2013), was a US antitrust case in which the Court held that Apple Inc. conspired to raise the price of e-books in violation of the Sherman Act.

The suit, filed in April 2012, alleged that Apple Inc. and five book publishing companies conspired to raise and fix the price for e-books in violation of Section 1 of the Sherman Antitrust Act.

Approximately every three months, the CEOs of the Big Six would meet in private dining rooms in New York restaurants "without counsel or assistant present, in order to discuss the common challenges they faced, including most prominently Amazon's pricing policies."

[2] Beginning on December 8, 2009, Apple's senior VP of Internet Software and Services, Eddy Cue, contacted the publishers to set up meetings for the following week.

Shortly after January 31, Amazon sent a letter to the Federal Trade Commission complaining about the simultaneous nature of the demands for agency model agreements from the publishers who had signed with Apple.

To show that there is violation of Section 1 of the Sherman Act proof of joint or concerted action is required as was shown in Monsanto Co. v. Spray-Rite Service Corp.

The plaintiffs must show In Monsanto,[3] the Court also described how "Circumstances must reveal a unity of purpose or a common design and understanding, or a meeting of minds in an unlawful arrangement.

Under the rule of reason "the plaintiffs bear an initial burden to demonstrate the defendants' challenged behavior had an actual adverse effect on competition as a whole in the relevant market.

Finally, Apple argued that should the plaintiffs win a verdict in their favor, this would set a dangerous precedent and will discourage business from entering other markets.

[2] The Court found that a large amount of evidence showed that the publisher defendants joined with each other in a horizontal price-fixing conspiracy.

In July 2013, US District Court judge Denise Cote found Apple guilty of conspiring to raise the retail price of e-books and scheduled a trial for 2014 to determine damages.

[4] In June 2014, Apple settled the e-book antitrust case out of court with the States; however still appealed Judge Cote's initial ruling.

[5] In June 2015, the 2nd US Circuit Court of Appeals, by a 2–1 vote, concurred with Judge Cote that Apple conspired to e-book price fixing and violated federal antitrust law.