Apple 2012 Annual Report Download - page 22

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The Apple iPod iTunes Antitrust Litigation (formerly Charoensak v. Apple Computer, Inc. and Tucker v. Apple
Computer, Inc.); Somers v. Apple Inc.
These related cases have been filed on January 3, 2005, July 21, 2006 and December 31, 2007 in the
United States District Court for the Northern District of California on behalf of a purported class of direct and
indirect purchasers of iPods and iTunes Store content, alleging various claims including alleged unlawful tying of
music and video purchased on the iTunes Store with the purchase of iPods and unlawful acquisition or
maintenance of monopoly market power under §§1 and 2 of the Sherman Act, the Cartwright Act, California
Business & Professions Code §17200 (unfair competition), the California Consumer Legal Remedies Act and
California monopolization law. Plaintiffs are seeking unspecified compensatory and punitive damages for the
class, treble damages, injunctive relief, disgorgement of revenues and/or profits and attorneys fees. Plaintiffs are
also seeking digital rights management free versions of any songs downloaded from iTunes or an order requiring
the Company to license its digital rights management to all competing music players. The cases are currently
pending.
Apple eBooks Antitrust Litigation (United States of America v. Apple Inc., et al.)
On April 11, 2012, the U.S. Department of Justice (the “DOJ”) filed a civil antitrust action against the Company
and five major book publishers in the U.S. District Court for the Southern District of New York, alleging an
unreasonable restraint of interstate trade and commerce in violation of §1 of the Sherman Act and seeking,
among other things, injunctive relief, the District Court’s declaration that the Company’s agency agreements with
the publishers are null and void and/or the District Court’s reformation of such agreements. The DOJ’s complaint
asserts, among other things, that the decision by the five publishers to shift to an agency model to sell eBooks
and their agreements with the Company were an attempt to “raise, fix and stabilize retail e-book prices, to end
price competition among e-book retailers, and to limit retail price competition.” The Company filed a response to
the DOJ complaint in late May 2012, denying the DOJ’s allegations, and it intends to vigorously contest the
lawsuit. The lawsuit is now in discovery, with an initial trial date set for June 2013. Three of the five publishers
have reached a settlement with the DOJ, which requires the publishers to terminate their agreements with the
Company and renegotiate new agreements pursuant to the terms of their settlements with the DOJ. The District
Court approved the settlement on September 6, 2012 and, accordingly, these three publishers terminated their
original agreements and have entered into new agreements with the Company.
Item 4. Mine Safety Disclosures
Not applicable.
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