Apple's defense against the US government's charges regarding its e-book price fixing begins on Monday. The Cupertino-based company is accused of working with e-book publishers to set prices to compete in the market dominated by Amazon.
The three-week long non-jury trial to begin in New York will see Apple's defense against the 2009 case in which it collaborated with five publishing houses to compete with the monopoly of Amazon in the market.
The US Department of Justice (DoJ) alleges that Apple agreed with the country's five out o the six biggest publishers to destabilize Amazon's market dominance by asking them to fix the price of e-books rather than letting individual retailers to do so. A method known as Agency-model which eventually had the drawback that customers had to shell out more. Apple is alleged to have worked with Penguin Group, HarperCollins, Simon & Schuster, Hachette and Macmillan to increase the e-book prices.
The publishers who originally were defendants with Apple has reached for settlements and agreed to sever ties with Apple's e-book deal. Penguin had earlier this month offered the largest settlement price with $75 million. However, current CEO Tim Cook dismissed the idea of settlement with government denying any kind of wrongdoing.
Interestingly, quotes from the official biography of Apple's co-founder Steve Jobs has been cited as the major evidence in the case by DoJ. The CEO before his death in 2011 said, "We told the publishers: "We'll go to the agency model, where you set the price, and we get our 30 percent, and yes, the customer pays a little more, but that's what you want anyway."
If proven guilty, it would largely hurt Apple's already tarnished image in the wake of recent allegations of tax evasions and poor working conditions of iPad factories in China.
