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Apple (NASDAQ:AAPL) is rejecting the U.S. government’s antitrust lawsuit in which it stands accused of conspiring with publishers to fix e-book prices. In a filing in U.S. District Court in Manhattan on Tuesday, Apple denied having conspired with anyone, and said it has not fixed prices to e-books in an effort to thwart Amazon (NASDAQ:AMZN), whose pricing model made it the most popular e-book seller before Apple joined the mix.
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The U.S. Department of Justice in April accused Apple of colluding with five publishers — Macmillan, Penguin Group (NYSE:PSO), HarperCollins (NASDAQ:NWS), Simon & Schuster (NYSE:CBS), and Hachette Book Group — to boost e-book prices in early 2010 as it launched the first iPad. Amazon, which makes the Kindle e-reader, had long been selling e-books for as little as $9.99. The lawsuit quotes Apple’s late co-founder Steve Jobs as saying he wanted to offer publishers a means to boost prices, and “create a real mainstream e-books market at $12.99 and $14.99.”
The government argues that Apple’s new pricing model is anti-competitive and harms customer, but Apple argues that it has actually fueled demand for e-books by forcing Amazon and rivals, chiefly Barnes & Noble (NYSE:BKS), to compete more aggressively. “Apple’s entry into e-book distribution is classic procompetitive conduct” that created competition where none existed, Apple said in its court papers.
Apple said in its court filing that the government’s complaint was “fundamentally flawed as a matter of fact and law,” and further, denied that the government “accurately characterized” the comment attributed to Jobs.
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