Last week, Cote said in a pretrial teleconference that the government will “be able to show at trial direct evidence that Apple knowingly participated in and facilitated a conspiracy to raise prices of e-books, and that the circumstantial evidence in the case, including the terms of the agreements, will confirm that,” according to a report by Reuters. She described that view as “tentative,” saying she had read only some of the evidence.
Analysts, however, said the comments may reveal a great challenge for Apple.
The five publishers involved in the case — Penguin Group, HarperCollins, Simon & Schuster, Hachette Book Group and MacMillan — were charged with conspiring to create an “agency model” scheme with Apple in which they would have greater control over prices. According to documents filed by the Justice Department, Apple executives — including Steve Jobs, who died in 2011 — met with publishers, exchanged e-mails and had phone conversations setting up a scheme that would lift prices to about $14 to $15 per title from Amazon’s average price of around $10.
The market potential for e-books is enormous, and Apple has tried to attack Amazon’s dominance in selling books through its ubiquitous Kindle device, the Justice Department has argued.
Amazon has about 65 percent of the market share of e-books, followed by Barnes and Noble and then Apple’s iBooks collection.
Even with the lawsuit, consumers have not felt much difference, analysts say. Prices have gone down slightly for some titles, according to Forrester Research’s Sarah Rotman Epps, but it is difficult to say whether that is because of the lawsuit or just market forces.
E-book sales are expected to grow to $12 billion in 2017, up from $6.6 billion this year, according to Forrester.