Why Settle? Apple Chooses Trial in U.S. Department of Justice Lawsuit

Apple, along with publishers Macmillan and Penguin Group, look like they will pursue trial rather than settlement in the lawsuit brought by the U.S. Department of Justice against Apple and five of the “big six” book publishers.

Yesterday marked the first hearing in Manhattan Federal Court since the DOJ’s anti-trust division filed a law suit last week that accused Apple and the book publishers of trying to impede Amazon’s ability to discount books by colluding to fix e-book prices.

Apple Attorney, Daniel Floyd, told U.S. District Judge Denise Cote, “Our basic view is that we would like the case to be decided on the merits. We believe that this is not an appropriate case against us and we would like to validate that.”

Floyd’s first chance for validation won’t come until the next court hearing, which is set for June 22.

The lawsuit has its roots in an alleged $2 – $3 price increase over just three days in 2010, around the time Apple launched the original iPad.

HarperCollins, Hachette, and Simon & Schuster have already agreed to settle. Their settlements end the agency pricing model (publisher sets price) in favor of the wholesale pricing model (retailer sets price) preferred by Amazon, as well as terminating Apple’s “most favored nation” contracts with the publishers.

These court proceedings may also affect a separate class-action lawsuit filed on behalf of consumers by 15 U.S. States and Puerto Rico against Apple and the book publishers. Currently those states are in settlement talks with the three book publishers. If every U.S. state settles then, according to HarperCollins lawyer, Shepard Goldfein, “There could be something left of the class, or nothing left of the class.”

HarperCollins and Hachette have already agreed to pay U.S. states $51 millon to consumers who bought e-books. A lawyer for Simon & Schuster reported that the publisher is currently in negotiations to join that settlement as well.

The EU launched a similar investigation at the end of 2010, and three Canadian law firms have just filed a class action lawsuit on behalf of that country’s e-book consumers..

[via Reuters]

About Emily: Emily is a freelance writer who loves discovering new apps whenever she can pry the iPad away from her children or husband. You can contact her via Twitter: @whatwentwrite