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Apple Loses Bid to Toss States’ E-Book Antitrust Claims

Apple Inc. (AAPL)’s request to dismiss claims by 33 states and territories for damages over the company’s fixing of electronic book prices was denied by a federal judge in Manhattan.

U.S. District Judge Denise Cote, who ruled in July that Apple had orchestrated an illegal scheme with publishers to raise e-book prices, today rejected the company’s arguments that the states lack the legal standing to pursue damages on behalf of their citizens.

The ruling helps clear the way for the states and a class of consumers in the rest of the country to pursue antitrust damages of as much as $840 million in a July trial.

The U.S. sued Apple and five of the biggest publishers in April 2012, claiming the maker of the iPad pushed them to sign agreements letting it sell digital copies of their books under a pricing model that made most e-books more expensive. Under Apple’s contracts the publishers set book prices with Apple getting 30 percent.

Apple and the publishers used the contracts to force Amazon.com (AMZN), the No. 1 e-book seller, to change its pricing model, the government claimed. At the time, Amazon was selling electronic versions of best-selling books for $9.99, which was often below cost. Cote ruled against Apple after a non-jury trial.

Tom Neumayr, an Apple spokesman, didn’t immediately respond to a voice-mail message seeking comment on today’s ruling.

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 federal court in Manhattan at rvanvoris@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Peter Blumberg, Fred Strasser

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