Judge expects Apple is guilty of ebook price-fixing

An American judge says there is strong evidence that Apple was involved in a conspiracy with publishers to fix the price of ebooks.

The iPad maker was first accused three years ago of colluding with five publishing companies to artificially inflate the price of ebooks, as it battled to loosen the stranglehold that Amazon's Kindle had on the market.

Apple has been investigated by the US Department of Justice, and is due to be brought to trial early next month. However, in a highly unusual move, the judge overseeing the trial, US District Judge Denise Cote, has discussed its likely outcome before it has 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 ebooks, and that the circumstantial evidence in this case, including the terms of the agreements, will confirm that," she said on Friday.

Judge Cote stressed that her view was not final and that she has not yet read all the evidence but her comments will heap pressure on Apple, which has consistently rejected allegations that it was involved in price fixing as "simply not true".

Orin Snyder, a lawyer for Apple, said in a statement: "We strongly disagree with the court's preliminary statements about the case today." The Department of Justice's file against Apple includes an email from Steve Jobs, its late founder, to James Murdoch, the deputy chief operating officer of News Corporation, whose HarperCollins book operation was one of the publishers accused of collusion. Setting out the choices HarperCollins faced, Mr Jobs told Mr Murdoch: "Throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market as $12.99 and $14.99."

The alternative would be for publishers to "keep going with Amazon" and watch their slice of the profits from ebooks become smaller and smaller over time. "You will make a bit more money in the short term, but in the medium term Amazon will tell you they will be paying you 70pc of $9.99," Mr Jobs said. Publishers were concerned that Amazon was pricing ebooks too low, putting a dent in their balance sheets and setting consumer expectations so that it would be difficult to raise prices.

They were also worried that Amazon, which has around 70pc of the British ebook market, would have publishers over a barrel should it want to demand better terms in the future. They attempted to defend their position by introducing the controversial "agency model" of pricing, proposed by Apple, which effectively allowed publishers to dictate the charge for each ebook as long as the retailer receives 30pc of the profits. According to DoJ filings lodged in a Manhattan court, the chief executives of Hachette, HarperCollins, Penguin Group, Simon & Schuster and Macmillan met for a series of dinners in the private room of a New York restaurant during 2008 and 2009, to discuss "business matters".