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E-book price-fixing trial: Will the judge come down on the side of Apple?

Judge Denise Cote seemed inclined to rule for the Department of Justice at the beginning of the trial, but her remarks as the case closed seemed to indicate a shift towards Apple's side.

By Husna HaqCorrespondent / June 20, 2013

It's unlikely Apple will settle in the case filed against it by the Department of Justice alleging that Apple participated in an e-book price-fixing scheme.

Eric Risberg/AP

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As the Department of Justice’s anti-trust trial closes Thursday, US District Court Judge Denise Cote signaled a potentially dramatic shift in her original assessment of the case, giving Apple’s attorneys high expectations for a favorable ruling.

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Here are Judge Cote’s words at the pre-trial hearing, before the trial had begun: “I believe that the government will be able to show at trial direct evidence that Apple knowingly participated in and facilitated a conspiracy to raise prices of e-books, and that the circumstantial evidence in this case, including the terms of the agreements, will confirm that.”

Compare those wth her remarks Wednesday, after she closed the case: “I thought I had prepared so well. I learned a lot. But you have helped me understand so much more through the evidence.”

“I look forward to your summations. It seems to me the issues have somewhat shifted during the course of the trial. As you see it play out in the courtroom, things change a little bit and people have to stay nimble. So I'm very much looking forward to understanding precisely where we are now, when I listen to you tomorrow, what things are in dispute and what things aren't in dispute. I think things have shifted. At least, it's my perception it has.”

In other words, Cote appears to have been moved by Apple’s defense.

The case began when the DOJ said last year that Apple conspired with five top publishers to raise prices for e-books in competition with Amazon. It says it did this by persuading publishers to adopt a publishing model known as the “agency model,” whereby publishers set e-book prices, in place of the traditional wholesale model, where the retailer sets prices. In its case, the government alleged that a price-fixing scheme led by Apple reduced competition in the e-books industry and raised e-book prices.

Five publishers accused in the suit have settled, citing a lack of resources to fight the government in court, leaving Apple as the sole defendant. Apple has maintains it did nothing wrong and has actually helped the publishing industry by challenging Amazon’s “monopoly.”

After three weeks of testimony in which top industry executives were called in to testify, including email and other evidence from the late Apple founder and CEO Steve Jobs, the trial saw its last witnesses Wednesday. Closing arguments are scheduled for Thursday, with each side getting 2 ½ hours to summarize its case.

Based on her comments Wednesday, some observers are expecting Cote to side with Apple. Should Apple settle, however, it could face monetary damages – the five publishers in the original suit agreed to pay more than $122 million in damages to 33 states.

It appears unlikely that Apple will settle, however. As the Washington Post pointed out, the company has promised “a dogged legal battle” and is prepared to appeal if Cote rules against it. In a sign of the significance of the case, some experts predict it could even reach the Supreme Court.  

According to the court’s PR officer, Judge Cote is expected to render her decision within two months or less.

Husna Haq is a Monitor correspondent.

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