US appeals court hears Apple e-books challenge

US appeals court hears Apple e-books challenge

NEW YORK - A US judge Monday appeared to doubt the government's e-book antitrust case against Apple, saying the tech giant was challenging "predatory" pricing from rival Amazon.

The comments came as a federal appeals court panel heard arguments in the case, in which Apple was found to have colluded with publishers to raise e-book prices.

Apple argues that its entry into the e-book market was pro-competitive because it challenged Amazon, which had a dominant share in e-books.

Apple claims its entry spurred additional publishers to produce e-books, and that prices of e-books generally fell even though it concedes that some prices rose in the short-term.

In July 2013, US District Court Judge Denise Cote sided with the government, concluding that Apple was liable for "facilitating and encouraging" a collective effort by the publishers to end price competition for e-books.

But on Monday, one of the judges on the three-member appeals panel appeared openly hostile to the government's case.

Judge Dennis Jacobs questioned a Department of Justice attorney on the agency's hostility to Apple's challenge to Amazon, which had more than estimated 90 percent market share at the time.

"What we're talking about is a new entrant who is breaking the hold of a market by a monopolist who is maintaining its hold by what is arguably predatory pricing," Jacobs said.

Malcolm Stewart, the deputy Solicitor General for the US Justice Department, said the department did not believe Amazon's policies qualified as "predatory pricing."

He defended the government's case on the grounds that Apple's entry raised e-book prices for many consumers.

A ruling by the appeals panel is expected in 2015.

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