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Tag: price fixing

  • Apple to Pay $450M in e-book Price Fixing Case

    In 2013, a US Federal judge ruled that Apple conspired with major publishers to raise prices on e-books following the launch of the iBookstore.

    Now, a US Circuit Court of Appeals has upheld the decision.

    In a 2-to-1 ruling, the court concluded that Apple did, in fact, orchestrate a conspiracy to raise ebook prices.

    “We conclude that the district court correctly decided that Apple orchestrated a conspiracy among the publishers to raise ebook prices, that the conspiracy unreasonably restrained trade in violation of §1 of the Sherman Act, and that the injunction is properly calibrated to protect the public from future anticompetitive harms. Accordingly, the judgment of the district court is affirmed,” said the court’s decision.

    As the Wall Street Journal points out, Apple’s decision to go to trial was a bold one.

    The 2-1 ruling Tuesday by the Second U.S. Circuit Court of Appeals in Manhattan follows three years of litigation, millions of dollars in legal fees and a bold decision by Apple to challenge the U.S. Department of Justice to a trial, even after all the publishers with which it was accused of colluding had settled their cases.

    Apple will pay $450 million – mostly to e-book customers.

    Apple’s original argument was that the lawsuit was flawed from the start.

    “Apple’s entry into e-book distribution is classic procompetitive conduct that created competition where none existed

    “For Apple to be subject to hindsight legal attack for a business strategy well-recognized as perfectly proper sends the wrong message to the market. The government’s complaint against Apple is fundamentally flawed as a matter of fact and law,” said Apple back in 2012.

  • Bridgestone Executive Jailed For Price Fixing

    Bridgestone executive Yusuke Shimasaki this week pleaded guilty to charges related to an international car part price-fixing and bid-rigging conspiracy. Two other Bridgestone executives, Yasuo Tyuto and Isao Yoshida, were also indicted this week for their roles in the conspiracy.

    Shimasaki will serve one year and six months in prison and pay a $20,000 fine. As part of the plea agreement, Shimasaki has agreed to cooperate with the U.S. Department of Justice’s investigation into the price-fixing.

    Shimasaki pleaded guilty to one charge of price fixing and bid riggin in violation of the Sherman Act. The conviction stems from a wide-ranging conspiracy that Bridgestone Corp. participated in from January 2001 until December 2008. The company met with others during that time to artificially inflate the prices of certain rubber components for vehicles. These rubber parts were then sold to car manufacturers including Nissan, Toyota, and Suzuki. In February Bridgestone was fined $425 million for its part in the collusion.

    According to Shimasaki’s plea agreement, he participated in the conspiracy from January 2001 until December 2008. He moved up through the company as a Bridgestone sales manager, EVP, and then general sales manager for the company during that time.

    Shimasaki is one of 33 different people charged in connection to the price-fixing scandal. In addition, 26 separate companies have been found guilty of participating in the conspiracy. These companies have paid a combined $2.29 billion in fines to the U.S. government. The FBI and Justice Department are continuing to investigate the anticompetitive practices uncovered in automotive industry in recent years.

    “The charge today once again demonstrates the Antitrust Division’s vigorous commitment to hold individuals accountable for engaging in anticompetitive conduct,” said Brent Snyder, deputy assistant attorney general for the criminal enforcement program of the Justice Department’s Antitrust Division. “The division’s ongoing investigation has resulted in more than two dozen executives serving prison time for their participation in illegal conspiracies involving auto parts.”

    Image via Bridgestone

  • Bridgestone fined $425 Million For Price Fixing

    The U.S. Department of Justice today announced that Bridgestone Corp has agreed to plead guilty to charges related to automotive industry price fixing. The company will pay a $425 million fine for colluding to artificially raise prices on certain rubber vehicle parts.

    In agreeing to plead guilty, Bridgestone has admitted that it was part of a conspiracy to rig bids and fix prices for anti-vibration rubber parts for cars. These parts were then sold to car companies including Nissan, Suzuki, and Toyota at the inflated prices.

    Bridgestone officials met with co-conspirators to discuss prices, set agreed-upon bids, and divide up sales among their companies. According to the charges this method of setting automotive parts prices went on from at least January 2001 until December 2008.

    “The illegal activity in this case threatened the basic tenet of free competition,” said Stephen Anthony, special agent in charge with the FBI. “We are pleased with the acceptance of responsibility along with the significant penalty which will be paid by Bridgestone for this conspiracy to fix prices. Together with our partners in the Department of Justice’s Antitrust Division, we will continue to combat illegal practices which threaten consumers across the United States.”

    In addition to the fine, Bridgestone has stated that it will cooperate with the larger U.S. investigation into price fixing in the auto industry. Bridgestone is one of 26 companies that have been found guilty of colluding to fix prices for automotive parts. To date the U.S. has recovered more than $2 billion in fines from the companies and prosecuted 28 individuals for their roles in the scandal.

  • Justice Department Takes Apple To Court Today Over E-Book Price Fixing Allegations

    Over a year ago, Apple and a bunch of publishers were sued by the Department of Justice on allegations of e-book price fixing. Every publisher since then has settled, but Apple has decided to fight it out in court.

    But wait, what is this all about again? Sure, we know that it’s about e-book price fixing, but where does the alleged conspiracy begin? How far down the rabbit hole of e-book price fixing does the Justice Department go? All that information and more can be obtained in the massive slide deck released by the Justice Department today.

    The slides contain conversations between Apple and publishers in which the DoJ claims that the company colluded with publishers to raise the prices of e-books. It also contains snippets from Steve Job’s biography that reference meetings with publishers. All in all, it reads like the kind of corporate conspiracies you see in thriller novels.

    As for Apple, it holds that it has done nothing wrong. Speaking at the D11 conference last week, Apple CEO Tim Cook described the case as “bizarre.” He also said that Apple refused to settle when publishers did because doing so would admit that “we did something we didn’t do.”

    So, what are Apple’s chances in winning this fight? The odds definitely seem stacked against it with even the judge presiding over the case predicting that Apple will lose. Still, Apple thinks it can win, and that must be worth something.

    If you need a refresher course, here’s the slide deck from the Justice Department (courtesy of CNET):

    U.S. v. Apple Et Al Opening Slides