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Wednesday, May 30, 2012, 04:30 pm PT (07:30 pm ET)

Apple denies e-book price fixing allegations in response filing

A class-action lawsuit against Apple involving e-book price fixing moved a step forward on Tuesday as the Cupertino-based company filed an official response to accusations that it colluded with book publishers to artificially inflate the cost of products sold through the iBookstore.

Apple's latest filing is standard procedure in the suit being leveled against the iPad maker and two major publishing houses and is the latest significant development since presiding Judge Denis Cote denied the defendants' motion to dismiss earlier in May.

Tuesday's filing saw Apple categorically dismiss accusations from the class, which now includes 31 states, stating several times that the evidence will "speak for itself." The response breaks down the complaint paragraph by paragraph, challenging the charges by either citing a lack of "sufficient evidence and belief" or denying them outright.

Apple pointedly admits that, while it conducted bilateral negotiations with certain publishers, the company denies any collusion or attempt at price-fixing.

Speaking to the so-called "agency model," Apple "denies that the adoption of an agency model worked a “radical” or “fundamental” change in pricing “that had existed for more than a hundred years.” The response went further and posited that the agreements held with publishers did not prevent competing retailers to set their own e-book prices. Under the agency model, however, a "most favored nations" clause disallowed publishing partners to offer their wares to other resellers at lower prices.

Amazon was mentioned numerous times in the filing as the wholesale pricing model used by the internet sales giant is being leveraged by the plaintiffs as an example of how Apple's strategy affected the e-book market. In the complaint, the class alleges that e-books sold through the iBookstore face "no pricing competition from Amazon or other e-distributors."

The plaintiffs also argue that Apple used the dissatisfaction felt by publishers that were negatively impacted by the wholesale model as leverage to join the iBookstore. To this, Apple responds by admitting that "publicly and privately in their individual discussions with Apple, representatives of each of the publishers separately expressed varying degrees of unhappiness with Amazon’s tactics, including its prices," but denies using the knowledge as a means of incentive to use the agency model. The company also denies that it was an intermediary between the publishers as indicated by the complaint.



The class-action suit is progressing alongside a parallel Department of Justice antitrust case, which Apple has warned could be harmful for consumers, calling it "fundamentally flawed."

Most recently, documents from the class-action case revealed a previously redacted email from Apple co-founder Steve Jobs pushing for the agency model. Though not hard evidence of collusion, the plaintiffs are attempting to illustrate a willingness on the part of Apple to persuade the publishers into the iBookstore model.

The next deadline for the case is a status conference set to take place in late June.