Amazon: victim or aggressor? Issue will frame Apple e-book trial

Apple and the Department of Justice are set to spar in a closely watched price-fixing trial set for early June but, increasingly, attention in the case is turning to a third party — Amazon.

In pre-trial filings, Apple is trying to expose redacted evidence that the company claims will “embarrass” Amazon and show that the retailer engaged in the same activities for which Apple is now on trial. The claims are set out, in part, in a letter last week from Apple’s law firm that urges US District Judge Denise Cote to reveal information about its pricing as well as “internal discussions about the inferiority” of its Kindle e-reader compared to the iPad. Apple also says the redacted information will help expose the “fiction” that Amazon was “forced” to adopt a new pricing system as a result of a 2010 arrangement between Apple and five big publishers. This arrangement — known as “agency pricing” — resulted in publishers requiring retailers to sell e-books on a commission basis, in which publishers could set the price. This led the Department of Justice, state governments and class action lawyers to sue Apple and the publishers; the latter settled the cases and agreed to pay out millions but Apple is holding its ground. Apple argues that the Department of Justice is wrong to portray Amazon as a victim, along with consumers, of a conspiracy to raise prices. Instead, the company claims that Amazon was contemplating agency pricing too and was pleasantly surprised when the publishers took it up on their own.