Apple, Publishers Lose Bid to Dismiss E-Book Class Action

Apple Inc. (AAPL) and five book publishers lost their bid to have a private antitrust suit over electronic book pricing dismissed.

U.S. District Judge Denise Cote in Manhattan today denied a request by the defendants to throw out the complaint by plaintiffs seeking to represent a nationwide class of consumers who bought e-books from the defendants. They claim Apple and the publishers violated federal and California state law by agreeing on e-book pricing.

The complaint “plausibly alleges that Apple and the publisher defendants took part in a conspiracy in restraint of trade, that an object of this conspiracy was to raise prices for eBooks,” Cote said in an opinion denying the defendants’ motion to dismiss the federal antitrust claims in the case.

Last month, the U.S. government sued Cupertino, California- based Apple and the publishers -- Hachette SA, HarperCollins, Macmillan, Penguin Group and Simon & Schuster -- claiming they broke the law in setting prices for e-books. Cote is overseeing the government suit in addition to actions filed by states over e-book pricing and private antitrust claims filed in federal court.

Overlapping Claims

The claims in the state cases overlap many of those in the private class action, Michael Cole, the chief of Connecticut’s antitrust department, told Cote in a hearing last month. As a result, a settlement with all the states would resolve most of the private claims, Cole said.

Erica Glass, a spokeswoman for Pearson Plc (PSON)’s Penguin Group and Adam Rothberg, a spokesman for CBS Corp. (CBS)’s Simon & Schuster, declined to comment on Cote’s ruling today.

Apple spokesman Tom Neumayr, Sophie Cottrell, a spokeswoman for Lagardère SCA’s Hachette Book Group, and Erin Crum, a spokeswoman for News Corp. (NWSA)’s HarperCollins, didn’t immediately return voice-mail messages seeking comment on the ruling. Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH, didn’t immediately respond to an e-mail seeking comment.

Before the defendants reached the pricing agreements that the Justice Department and private claimants allege were illegal, Seattle-based Amazon.com Inc. (AMZN) dominated the digital- book market by offering titles at $9.99 each. Under the contested agreements, publishers set prices for best-selling books at $12.99 and $14.99, giving Apple a 30 percent cut.

The case is In Re Electronic Books Antitrust Litigation, 11-MD-2293, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Bob Van Voris in New York at rvanvoris@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net

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