Apple found per se liable in a hub-and-spoke conspiracy with e-book publishers

Last week, Apple was found by a court in the Southern District of New York to have engaged in a per se illegal horizontal price-fixing conspiracy with five of the six top national book publishers to raise the price of e-books.

The court found that Apple effectively engaged in a ‘hub-and-spoke conspiracy’, i.e., Apple (acting as the hub) effectively facilitated and encouraged a horizontal agreement among the publishers (the spokes) to fix prices through a series of vertical agreements (containing MFN clauses) between Apple and each of the publishers. 

Although the court found Apple liable under a per se standard, the court indicated that it would have also found Apple liable under a rule of reason standard and rejected Apple’s assertion that its actions had the procompetitive effect of introducing competition (through Apple’s entry) in the e-books market then allegedly dominated by Amazon…

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