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Ebook Damages Could Take Big Bite Out Of Apple

July 14, 2013 by Wendy Davis

Apple might have been found liable for conspiring to fix the price of ebooks, but the antitrust case against the company is far from over.

Now, Apple faces new hearings about monetary damages -- and those proceedings could be every bit as complicated as the original trial. In this case, damages are likely to prove a “particularly fertile ground for disagreement,” Gary Sesser, an antitrust lawyer with Carter Ledyard & Milburn, tells Online Media Daily.

In general, calculating damages involves figuring out the amount of extra money that consumers had to pay due to price-fixing. Prosecutors can then ask for that figure to be multiplied by three. In Apple's case, the government believes that the company's conspiracy with book publishers caused Amazon to raise the price of bestsellers from $9.99 to between $12.99 and $14.99. If so, damages would amount to as much as $9 to $15 per book.

But Apple can argue that Amazon would have raised the price of bestselling ebooks anyway, on the theory that the $9.99 price was not sustainable, Sesser says. Apple also can argue that the price of some ebooks -- although not bestsellers -- dropped after it rolled out an electronic bookstore for the iPad.

For its part, Apple will almost certainly appeal both the finding of liability and damages. It's difficult to predict how appellate courts will view any case, but that's especially true here, given that there don't appear to be previous cases with facts similar to the one against Apple, Sesser says.

He adds that Apple's best argument might come down to the fact that it ultimately increased competition in the ebook market by introducing the iPad, which offered publishers a new way to distribute their electronic books.

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