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Class action lawsuit accuses Apple, major publishers of collusion

A class action lawsuit [text, PDF] filed Tuesday in the US District Court for the Northern District of California [official website] alleges that Apple [corporate website] and five major publishers colluded to illegally fix electronic book (e-book) prices. The complaint alleges that Apple and publishing companies, including HarperCollins, Hachette Book Group, Macmillan, Penguin and Simon & Schuster, conspired to increase e-book prices in an effort to compete with e-books and the economically-priced Kindle [product page] sold by Amazon [corporate website]. Apple's incentive to collude, the complaint contends, was to increase its distribution of digital media using the Kindle as a platform. The complaint alleges that the agreement occurred sometime before January 2010 when a majority of the publishers announced a shift in their pricing models and Apple simultaneously released the iPad. As a result of the unlawful agreement, Amazon was forced to abandon its discount pricing and adhere to a new agency model, thereby causing e-book prices to increase by 30 to 50 percent. The lawsuit claims that the defendants' conduct constitutes violations of federal and state antitrust laws, the Sherman Act, the Cartwright Act and the Unfair Competition Act [texts].

Apple has been battling a number of lawsuits recently. In July, Apple prevailed in a complaint [JURIST report] against HTC [corporate website] when the US International Trade Commission (USITC) [official website] ruled against HTC [JURIST report] for infringement of patents related to cell phones that run the Android operating system (OS). Apple filed a complaint against Samsung [JURIST report] earlier that month in an effort to bar importation of Samsung's smartphones and tablets. Apple claimed Samsung's "Galaxy" line copies its iPhone and iPad technology. The complaint came just a week after Samsung filed a similar complaint [JURIST report] seeking to prevent Apple from importing iPads and iPhones. Samsung claimed that Apple violated five patents also related to smartphones and tablets. In addition, Samsung filed a patent infringement suit [Bloomberg report] against Apple in the High Court in London in June. Finnish telecommunications company Nokia [corporate website] announced in June that it had entered into an agreement [press release; JURIST report] with Apple, settling all patent disputes between the parties and directing Apple to pay royalties to Nokia for the term of the agreement.

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Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

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