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Apple urges U.S. appeals court to void 'radical' e-books ruling

The Apple logo is pictured at its flagship retail store in San Francisco, California January 27, 2014. REUTERS/Robert Galbraith
The Apple logo is pictured at its flagship retail store in San Francisco, California January 27, 2014. REUTERS/Robert Galbraith

By Jonathan Stempel

NEW YORK (Reuters) - Apple Inc urged a U.S. appeals court to throw out a judge's "radical" finding that it violated antitrust law by manipulating electronic book prices, and blamed publishers for running a conspiracy it claimed to know nothing about.

The request on Tuesday night came after U.S. District Judge Denise Cote in New York concluded last July after a nonjury trial that Apple had played a "central role" in illegally scheming as early as December 2009 with five publishers to raise e-book prices and impede competitors such as Amazon.com Inc.

The publishers previously agreed to pay more than $166 million to settle related antitrust charges.

Apple introduced e-books in 2010 to help boost sales for its then-new iPad tablet.

In a filing with the 2nd U.S. Circuit Court of Appeals in New York, Apple said it "had no knowledge that the publishers were engaged in a conspiracy" at any time.

It said it lawfully took advantage of market "discord" and the publishers' own frustrations with Amazon, and "kick-started competition in a highly concentrated market, delivering higher output, lower price levels, and accelerated innovation."

Cote's decision "is a radical departure from modern antitrust law," Apple said. "If allowed to stand, the ruling will stifle innovation, chill competition, and harm consumers."

The Cupertino, California-based company asked the 2nd Circuit to reverse Cote's decision or else give it a new trial before a different judge.

Apple also again faulted Cote's appointment of Washington lawyer Michael Bromwich to monitor its antitrust compliance, calling that oversight unconstitutional.

The U.S. Department of Justice, which brought the case, was not immediately available on Wednesday for comment. That agency is expected to reply in writing to Apple's request.

In her decision, Cote also found Apple liable to 33 U.S. states for antitrust violations. She is expected to consider possible damages later this year. Apple said the states and private plaintiffs sought more than $800 million of damages.

On February 10, the 2nd Circuit rejected Apple's request to halt Bromwich's oversight during its appeal.

The case is U.S. v. Apple Inc, 2nd U.S. Circuit Court of Appeals, No. 13-3741.

(Reporting by Jonathan Stempel in New York; Editing by Lisa Von Ahn)

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