Apple has asked the U.S. Supreme Court to overturn an appellate court decision that found the company conspired with five publishers to increase e-book prices, reports Reuters. The Cupertino, California-based company wants the high court to review a June ruling that favored the U.S. Department of Justice, and found the company liable for engaging in a conspiracy that violated federal antitrust laws.
Reuters reports that Apple, in its petition, said the June decision by the 2nd U.S. Circuit Court of Appeals in New York contradicted Supreme Court precedent and would “chill innovation and risk taking.” “The Second Circuit’s decision will harm competition and the national economy,” Apple wrote.
If upheld, the decision would force Apple to pay consumers $450 million under a 2014 settlement with 33 state attorneys general and consumers that was contingent on the company’s civil liability being upheld.
Let’s back up and look at history of the whole matter. In April 2012 the United States Department of Justice filed an antitrust lawsuit against Apple, Hachette SA, HarperCollins, Macmillan, Penguin and Simon & Schuster in New York district court, claiming collusion over ebook pricing. The brouhaha centers on Apple’s move to change the way that publishers charged for e-books as it prepared to introduce its first iPad in 2010.
Traditionally, publishers sold books to retailers for roughly half of the recommended cover price. Under that “wholesale model,” booksellers were then free to offer those books to customers for less than the cover price if they wished.
Apple suggested moving to an “agency model,” under which the publishers would set the price of the book and Apple would take a 30% cut. However, Apple also insisted that publishers couldn’t let rival retailers sell the same book at a lower price.