The ruling says Apple was part of a plan that forced the hand of rival Amazon.
Apple conspired with five major publishers to illegally raise consumer prices for electronic books in 2010 and will next face a trial to decide how much it owes in damages, a federal judge ruled Wednesday.
The decision was a blow to Apple, which had refused to settle the Justice Department's antitrust lawsuit even after all five publishers negotiated settlements with the government and state attorneys general.
The company said it would appeal the decision. While states are seeking money damages from Apple, the Justice Department wants the court to bar Apple for two years from entering into any similar agreements that let publishers rather than retailers set prices or discriminating against competing e-reader apps.
"This result is a victory for millions of consumers who choose to read books electronically," Assistant Attorney General Bill Baer said in a statement.
Apple shares fell $1.62 to $420.73 in regular trading Wednesday.
The Justice Department claimed Apple forged agreements with the publishers that permitted higher pricing on best sellers and new releases, effectively nudging e-books and best sellers to $12.99 and $14.99, respectively. That helped publishers who were unhappy with Amazon selling e-books for $9.99, a price they thought was too low.
Apple conspired to create an environment that enabled the company and publishers to eliminate all retail price competition for their e-books, Cote said.
Apple denied any wrongdoing.
"Apple did not conspire to fix e-book pricing, and we will continue to fight against these false accusations," Apple spokesman Tom Neumayr said in a statement. "When we introduced the iBookstore in 2010, we gave customers more choice, injecting much-needed innovation and competition into the market, breaking Amazon's monopolistic grip on the publishing industry. We've done nothing wrong, and we will appeal the judge's decision."
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SOURCE: USA Today