Apple was found guilty of conspiring with five major publishers to raise the retail price of e-books, Reuters reported.
Despite the Cupertino California-based company's strong denial of the allegations, U.S. District Judge Denise Cote found "compelling evidence" in her ruling Wednesday in Manhattan. She said Apple conspired with the publishers to eliminate retail e-book competition and raise prices.
"Apple chose to join forces with the publisher defendants to raise e-book prices and equipped them with the means to do so," Cote said in a 159-page decision. "Without Apple's orchestration of this conspiracy, it would not have succeeded as it did."
The ruling stated Apple violated antitrust laws and now the tech giant may have to pay out huge damages fines.
The conspiracy was meant to try to substantially lessen Amazon Inc.'s dominance of the e-book market by forcing them to raise their prices. Apple, in coordination with Lagardere SCA's Hachette Book Group Inc. and Macmillan, News Corp's HarperCollins Publishers LLC, Pearson Plc's Penguin Group (USA) Inc. and CBS Corp's Simon & Schuster Inc., raised prices of books from $9.99 to $12.99 and $14.99.
"This result is a victory for millions of consumers who choose to read books electronically," Bill Baer, head of the Justice Department's antitrust division, said in a statement. "This decision by the court is a critical step in undoing the harm caused by Apple's illegal actions."
Cote began the non-jury trial on June 3 and indicated at the time that Apple would not fair well. Despite the ruling, Apple maintains its innocence and plans to appeal the decision.
"Apple did not conspire to fix e-book pricing," Apple spokesman Tom Neumayr said. "When we introduced the iBookstore in 2010, we gave customers more choice, injecting much needed innovation and competition into the market, breaking Amazon's monopolistic grip on the publishing industry. We've done nothing wrong."
The alleged collusion between Apple and the publishers began around 2009, the time leading up to the launch of the iPad tablet.
The publishers did not go to trial and agreed on a $166 million settlement to benefit consumers.
While Amazon began by buying books at wholesale price and selling them for below price to promote their Kindle reading device, Apple entered into agreements with publishers to sell their books at a higher price, giving a commission to Apple. This had forced Amazon into the same model, causing e-book retail prices to jump nearly 18 percent.
Apple was reportedly unable to combat statements made by its late co-founder Steve Jobs to News Corp. executive James Murdoch that he desired to boost prices and "create a real mainstream e-books market at $12.99 and $14.99."
Said Cote: "Apple's efforts to explain away Jobs' remarks have been futile."
