The U.S. Department of Justice (DOJ) filed a lawsuit on Wednesday, April 11, against Apple, arguing that the Cupertino-based company conspired with e-book publishers to raise e-book prices. According to several experts, however, the Justice Department's legal pursuit stretches the limits of antitrust law, and will likely end in defeat. In addition, Apple and publishers have several U.S. Supreme Court precedents on their side, as Cnet details.

One of these precedents dates back to 1992, when the Justice Department was forced to drop its antitrust case against IBM and admit it was "without merit." The Justice Department tried to rewrite antitrust law in 2001, but a federal appeals court nixed its attempt.

Better Case against Publishers

Now, the Justice Department seems to have a better case against publishers rather than Apple. In its 36-page complaint, the DOJ recounts how publishers met over breakfast and dinners, but without Apple present. "If the CEOs of the various publishers get together in hotel rooms to discuss prices, they are sunk," said Dominick Armentano, Professor Emeritus of Economics at the University of Hartford, as cited by Cnet. Prof. Armentano is also the author of Antitrust and Monopoly, and affiliated with the Independent Institute in Oakland, California.

Meanwhile, prolific legal scholar and NYU law professor Richard Epstein goes even further, and claims that "it will take some time to hear the whole story, but the betting here is that this lawsuit is a big mistake."

Attorney General Cries 'Conspiracy'

In an April 11 press conference held in Washington, D.C., Attorney General Eric Holder went on and accused the companies named as defendants in the legal pursuit of concocting a "conspiracy." On the other hand, not even this side of the story accused publishers of setting specific prices. If the publishers named as defendants agreed on something, they agreed on a business model. More specifically, the publishers considered the so-called "agency model" that Apple's iBookstore offered to be better than Amazon's wholesale model.

Returning to precedents, the BMI vs. CBS case back in 1979 is worth noting, as the court then ruled that "not all arrangements among actual or potential competitors that have an impact on price are per se violations." Moreover, according to a 2007 case, manufacturers can enforce minimum retail prices - one aspect of what publishers are now accused of "conspiring" with e-books.

3 Publishers Settle, Apple Litigates

Three of the publishers named as defendants in the suit - News Corp.'s HarperCollins Publishers, Simon & Schuster, and Lagardere SCA's Hachette Book Group - have agreed to settle the lawsuit.

Meanwhile, Apple, Pearson's Penguin Group, and Verlagsgruppe Georg von Holtzbrinck's Macmillan Publishers have chosen to litigate. Mark Lemley, Professor of Law at Stanford, who specializes in antitrust and intellectual property, said he expected Apple to fight back. "Apple has a history of being fairly aggressive in litigation," said the professor. "There's some sense in their corporate culture that we're right."

Apple's Response

After days of silence, Apple responded to the antitrust charges, dismissing the DOJ's accusations as untrue. On Thursday, April 12, AllThingsD posted a statement from Apple spokesman Tom Neumayr:

"The DOJ's accusation of collusion against Apple is simply not true," reads the statement. "The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry. Since then customers have benefitted from eBooks that are more interactive and engaging. Just as we've allowed developers to set prices on the App store, publishers set prices on the iBookstore."

(reported by Alexandra Burlacu, edited by Dave Clark)