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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK -------------------------------------x : IN RE ELECTRONIC BOOKS ANTITRUST : LITIGATION : : -----------------------------------: No. 11-md-02293 (DLC) : This Document Relates to : : : ALL ACTIONS : : -------------------------------------x APPLE INC.S ANSWER TO CONSOLIDATED AMENDED CLASS ACTION COMPLAINT For its Answer to Plaintiffs Consolidated Amended Class Action Complaint (Complaint), Defendant Apple Inc. (Apple) states as follows. Except as specifically admitted, Apple denies the allegations in the Complaint. I. 1. RESPONSE TO INDIVIDUAL PARAGRAPHS

Apple admits that eBook sales have increased rapidly since November 2007,

when Amazon released the Kindle, but denies that the Kindle revolutionized the book publishing industry. Apple lacks sufficient information and belief to admit or deny whether there are major economic advantages to eBook technology or whether eBook distribution costs are massively lower than those associated with brick-and-mortar publishing. Apple admits that there are costs associated with print books that are not present with eBooks. Apple specifically denies that it decided free market competition should not be allowed to work. Except as otherwise admitted, Apple denies the allegations in paragraph 1.

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2.

Apple lacks sufficient information and belief to respond to the allegations in the

first sentence in paragraph 2, and on that basis denies them. Apple admits, on belief, that Amazon generally sets eBook prices below prices for print books and that Amazon has, at times, set a $9.99 price level for certain newly released titles. Apple lacks sufficient information and belief to respond to the remaining allegations in paragraph 2, and on that basis denies them. 3. Apple lacks sufficient information and belief as to the state of mind of the Pub-

lisher Defendants to respond to the allegations in paragraph 3, and on that basis denies them, except Apple admits that publicly and privately in their individual discussions with Apple, representatives of each of the publishers separately expressed varying degrees of unhappiness with Amazons tactics, including its pricing. Apple further admits that Amazon is the dominant eBook retailer and wields market power over eBooks. 4. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 4 relating to the Publisher Defendants, and on that basis denies them. Apple specifically denies that it coordinated with the Publisher Defendants to force Amazon to abandon its proconsumer pricing. Apple denies the remaining allegations in paragraph 4. 5. Apple admits that the allegations in paragraph 5 purport to recite excerpts from al-

leged news articles and avers that, if and to the extent the alleged documents are ever held to be admissible, they will speak for themselves. 6. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 6, and on that basis denies them. 7. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 7, and on that basis denies them.

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8.

Apple admits that it announced the launch of the iPad in January 2010. Apple

further admits that its iPhone, iPad, and iPod touch devices offer functions which include the ability to distribute, store, and access digital media through the App Store and the iTunes Store. Apple denies the remaining allegations in paragraph 8, and specifically denies the allegation that Apple had strong incentives to help the Publisher Defendants restrain trade and increase the price of eBooks. 9. Apple admits that, prior to finalizing its eBook distribution agreements with pub-

lishers, news articles reported that the agreements would adopt an agency pricing model. Apple denies that the adoption of an agency model worked a radical or fundamental change in pricing that had existed for more than a hundred years. Apple also denies that its distribution agreements with publishers prevented other retailers from setting consumer prices for eBooks. Apple denies the remaining allegations in paragraph 9. 10. Apple lacks sufficient information and belief to respond to the allegations in par-

agraph 10, and on that basis denies them, except that Apple admits that it entered into an individual bilateral distribution agreement with each of the Publisher Defendants. 11. Apple admits that it conducted bilateral negotiations with each Publisher Defend-

ant prior to announcing the launch of the iPad. Apple denies the remaining allegations in paragraph 11. 12. Apple admits that the allegations in paragraph 12 purport to recite excerpts from

alleged news articles and avers that, if and to the extent the alleged documents are ever held to be admissible, they will speak for themselves. Apple further admits that it engaged in individual bilateral contract negotiations with the Publisher Defendants during January 2010. Apple denies the remaining allegations in paragraph 12.

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13.

Apple lacks sufficient information and belief as to the state of mind of the Pub-

lisher Defendants to respond to the allegations in paragraph 13, and on that basis denies them. Apple specifically denies that the $9.99 price point was the industry standard. Apple denies the remaining allegations in paragraph 13. 14. Apple lacks sufficient information and belief to respond to the allegations in par-

agraph 14, and on that basis denies them, except that Apple admits, on belief, that Amazon possessed a very high share (possibly approaching 90%) of the eBook sales volume when Apple entered the eBook retail business in 2010. 15. Apple admits that the allegations in paragraph 15 purport to recite excerpts from

alleged news articles and avers that, if and to the extent the alleged documents are ever held to be admissible, they will speak for themselves. Apple denies the remaining allegations in paragraph 15. 16. Apple admits that it announced the launch of the iPad on January 27, 2010, and

that the iPad includes an e-reader app called iBooks. Apple further admits that around the same time, Apple announced that it had entered into individual bilateral eBook distribution agreements that would allow Apple to offer eBooks through its iBookstore and that these agreements adopted an agency model. Apple denies that the agency model was newly minted. Apple lacks sufficient information and belief to respond to the remaining allegations in paragraph 16, and on that basis denies them. 17. Apple admits that the allegations in paragraph 17 purport to recite from excerpts

of a news article and avers that, if and to the extent the alleged news article is ever held to be admissible, it will speak for itself. Apple denies the remaining allegations in paragraph 17.

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18.

Apple admits that the allegations in paragraph 18 purport to recite from excerpts

of the biography of Steve Jobs and avers that, if and to the extent the alleged book excerpts are ever held to be admissible, they will speak for themselves. Apple denies the remaining allegations in paragraph 18. 19. Apple admits that the iPad went on sale the first week of April 2010. Apple lacks

sufficient information or belief to respond to the remaining allegations in paragraph 19, and on that basis denies them. 20. Apple lacks sufficient information or belief to respond to the allegations in para-

graph 20 regarding the pricing of eBooks, and on that basis denies them. Apple denies that eBooks sold through the iBookstore face no pricing competition from Amazon or other edistributors or remain at supra-competitive levels. Apple denies the remaining allegations in paragraph 20. 21. Apple admits that Plaintiffs claims arise under federal and state law and that

Plaintiffs seek damages and injunctive relief, but denies that it has engaged in illegal conduct and denies that any relief is appropriate. 22. Apple admits that one of the named plaintiffs purports to identify himself in para-

graph 22. To the extent that any response to the allegations in paragraph 22 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 22, and on that basis denies them. 23. Apple admits that one of the named plaintiffs purports to identify himself in para-

graph 23. To the extent that any response to the allegations in paragraph 23 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information

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and belief sufficient to respond to the remaining allegations in paragraph 23, and on that basis denies them. 24. Apple admits that one of the named plaintiffs purports to identify himself in para-

graph 24. To the extent that any response to the allegations in paragraph 24 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 24, and on that basis denies them. 25. Apple admits that one of the named plaintiffs purports to identify herself in para-

graph 25. To the extent that any response to the allegations in paragraph 25 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 25, and on that basis denies them. 26. Apple admits that one of the named plaintiffs purports to identify himself in para-

graph 26. To the extent that any response to the allegations in paragraph 26 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 26, and on that basis denies them. 27. Apple admits that one of the named plaintiffs purports to identify himself in para-

graph 27. To the extent that any response to the allegations in paragraph 27 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 27, and on that basis denies them.

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28.

Apple admits that one of the named plaintiffs purports to identify himself in para-

graph 28. To the extent that any response to the allegations in paragraph 28 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 28, and on that basis denies them. 29. Apple admits that one of the named plaintiffs purports to identify herself in para-

graph 29. To the extent that any response to the allegations in paragraph 29 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 29, and on that basis denies them. 30. Apple admits that one of the named plaintiffs purports to identify herself in para-

graph 30. To the extent that any response to the allegations in paragraph 30 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 30, and on that basis denies them. 31. Apple admits that one of the named plaintiffs purports to identify herself in para-

graph 31. To the extent that any response to the allegations in paragraph 31 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 31, and on that basis denies them. 32. Apple admits that one of the named plaintiffs purports to identify herself in para-

graph 32. To the extent that any response to the allegations in paragraph 32 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information

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and belief sufficient to respond to the remaining allegations in paragraph 32, and on that basis denies them. 33. Apple admits that one of the named plaintiffs purports to identify herself in para-

graph 33. To the extent that any response to the allegations in paragraph 33 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 33, and on that basis denies them. 34. Apple admits that one of the named plaintiffs purports to identify himself in para-

graph 34. To the extent that any response to the allegations in paragraph 34 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 34, and on that basis denies them. 35. Apple admits that one of the named plaintiffs purports to identify herself in para-

graph 35. To the extent that any response to the allegations in paragraph 35 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 35, and on that basis denies them. 36. Apple admits that one of the named plaintiffs purports to identify himself in para-

graph 36. To the extent that any response to the allegations in paragraph 36 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 36, and on that basis denies them.

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37.

Apple admits that one of the named plaintiffs purports to identify herself in para-

graph 37. To the extent that any response to the allegations in paragraph 37 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 37, and on that basis denies them. 38. Apple admits that one of the named plaintiffs purports to identify himself in para-

graph 38. To the extent that any response to the allegations in paragraph 38 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 38, and on that basis denies them. 39. Apple admits that one of the named plaintiffs purports to identify herself in para-

graph 39. To the extent that any response to the allegations in paragraph 39 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 39, and on that basis denies them. 40. Apple admits that one of the named plaintiffs purports to identify herself in para-

graph 40. To the extent that any response to the allegations in paragraph 40 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 40, and on that basis denies them. 41. Apple admits that one of the named plaintiffs purports to identify himself in para-

graph 41. To the extent that any response to the allegations in paragraph 41 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information

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and belief sufficient to respond to the remaining allegations in paragraph 41, and on that basis denies them. 42. Apple admits that one of the named plaintiffs purports to identify herself in para-

graph 42. To the extent that any response to the allegations in paragraph 42 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 42, and on that basis denies them. 43. Apple admits that one of the named plaintiffs purports to identify himself in para-

graph 43. To the extent that any response to the allegations in paragraph 43 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 43, and on that basis denies them. 44. Apple admits that one of the named plaintiffs purports to identify herself in para-

graph 44. To the extent that any response to the allegations in paragraph 44 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 44, and on that basis denies them. 45. Apple admits that one of the named plaintiffs purports to identify himself in para-

graph 45. To the extent that any response to the allegations in paragraph 45 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 45, and on that basis denies them.

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46.

Apple admits that one of the named plaintiffs purports to identify herself in para-

graph 46. To the extent that any response to the allegations in paragraph 46 is required, Apple denies that the named plaintiff was injured as a result of its conduct. Apple lacks information and belief sufficient to respond to the remaining allegations in paragraph 46, and on that basis denies them. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. Apple denies the allegations in paragraph 47. Apple admits the allegations in paragraph 48. Apple admits the allegations in paragraph 49. Apple admits the allegations in paragraph 50. Apple admits the allegations in paragraph 51. Apple admits the allegations in paragraph 52. Apple admits the allegations in paragraph 53. Apple admits the allegations in paragraph 54. Apple admits that venue is proper in this district. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 56, and on that basis denies them. 57. Apple lacks information and belief sufficient to respond to the allegations con-

cerning the Publisher Defendants, and on that basis denies those allegations. 58. Apple has never participated in the print book business, and therefore lacks suffi-

cient information and belief to respond to the allegations in paragraph 58, and on that basis denies them.

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59.

Apple responds that paragraph 59 generally appears to provide an accurate high-

level description of a portion of the print book business. Apple has never participated in the print book business, and therefore lacks sufficient information and belief to respond beyond that. 60. Apple lacks information and belief sufficient to respond to the allegations in par-

agraph 60, except that Apple denies that all eBook retailers used the wholesale model. 61. Apple admits the allegations in paragraph 61, except that Apple denies that Ama-

zons Kindle revolutionized the book publishing industry. Apple denies the remaining allegations in paragraph 61. 62. Apple lacks sufficient information and belief to respond to the allegations in par-

agraph 62, and on that basis denies them. 63. Apple denies that $9.99 was a standard pro-consumer price for new eBook ti-

tles. Apple lacks sufficient information and belief to respond to the remaining allegations in paragraph 63, and on that basis denies them. 64. Apple lacks sufficient information and belief as to the allegations in paragraph 64,

and on that basis denies them, except Apple admits that Amazon has at times set a $9.99 price level for certain newly released eBook titles and New York Times bestsellers. 65. Apple is informed and believes that wholesale prices for newly released and best-

selling eBooks were often above the $9.99 price reference in paragraph 65, although Apple lacks sufficient information and belief to respond to the remaining allegations in paragraph 65, and on that basis denies them. 66. Apple lacks sufficient information and belief to admit or deny whether there are

major economic advantages to eBook technology or whether eBook distribution costs are massively lower than those associated with brick-and-mortar publishing. Apple admits that

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there are costs associated with print books that are not present with eBooks and vice versa. Apple lacks sufficient information and belief to respond to the remaining allegations in paragraph 66, and on that basis denies them. 67. Apple lacks sufficient information and belief to respond to the allegations in par-

agraph 67, and on that basis denies them, except that Apple admits that Barnes & Noble released the Nook in 2009 and that eBook retailers Barnes & Noble and Sony have at times set a $9.99 price level for certain newly released eBook titles and New York Times bestsellers. 68. Apple is informed and believes that wholesale prices paid by Amazon to book

publishers for newly released and best-selling eBooks were often below the price Amazon paid to book publishers. Apple admits that Amazon possessed a very high share (possibly approaching 90%) of the eBook sales volume when Apple entered the eBook retail business in 2010. Apple lacks sufficient information and belief to respond to the remaining allegations in paragraph 68, and on that basis denies them. 69. Apple admits that eBooks are a fast-growing segment of the book industry, and

growth accelerated when Apple began offering eBooks through its iBookstore. Apple lacks sufficient information and belief to respond to the remaining allegations in paragraph 69, and on that basis denies them, except that Apple denies that Amazons eBooks business strategy is proconsumer. 70. Apple has never participated in the print book business, and therefore lacks suffi-

cient information and belief to respond to the allegations in paragraph 70, and on that basis denies them.

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71.

Apple has never participated in the print book business, and therefore lacks suffi-

cient information and belief to respond to the allegations in paragraph 71, and on that basis denies them. 72. Apple has never participated in the print book business, and lacks sufficient in-

formation and belief to respond to the allegations in paragraph 72, and on that basis denies them. Apple admits that publicly and privately in their individual discussions with Apple, representatives of each of the publishers separately expressed varying degrees of unhappiness with Amazons tactics, including its prices. 73. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 73, and on that basis denies them. 74. Apple lacks sufficient information and belief as to the state of mind of the Pub-

lisher Defendants to respond to those allegations, and on that basis denies the allegations in paragraph 74. 75. Apple lacks sufficient information and belief as to the state of mind of the Pub-

lisher Defendants to respond to those allegations, and on that basis denies the allegations in paragraph 75. Apple admits that the allegations in paragraph 75 purport to recite excerpts from alleged documents and avers that, if and to the extent the alleged documents are ever held to be admissible, they will speak for themselves. 76. Apple admits that it entered the eBook retail business with no market share and

that part of its motivation to start an iBookstore was to generate revenue and profits for the corporation and its shareholders and to avoid negative margins that it believed Amazon was incurring as it sold certain bestselling eBooks below cost, but Apple denies that it sought to do so by driving prices above $9.99. Apple lacks sufficient information and belief as to the state of

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mind of the Publisher Defendants to respond to those allegations, and on that basis denies the allegations in paragraph 76. 77. Apple lacks sufficient information and belief as to the state of mind of the Pub-

lisher Defendants to respond to those allegations, and on that basis denies the allegations in paragraph 77. Apple denies the remaining allegations in paragraph 77. 78. Apple lacks sufficient information and belief to respond to the allegations in par-

agraph 78, and on that basis denies them, except Apple admits that publicly and privately in their individual discussions with Apple, representatives of each of the publishers separately expressed varying degrees of unhappiness with Amazons tactics, including its prices. 79. Apple lacks sufficient information and belief as to the allegations in paragraph 79,

and on that basis denies them. 80. Apple admits that the allegations in paragraph 80 purport to recite excerpts from

an alleged News Corp. earnings call and avers that, if and to the extent the alleged call transcript is ever held to be admissible, it will speak for itself. 81. Apple admits that in its individual discussions, representatives of each of the Pub-

lisher Defendants separately expressed varying degrees of unhappiness with Amazons prices. Apple lacks sufficient information and belief as to the remaining allegations in paragraph 81, and on that basis denies them. 82. Apple admits that the allegations in paragraph 82 purport to recite excerpts from

an alleged blog posting and avers that, if and to the extent the alleged blog post is ever held to be admissible, it will speak for itself. Apple denies the remaining allegations in paragraph 82. 83. Apple denies the allegations in paragraph 83.

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84.

Apple lacks sufficient information and belief to respond to the allegations in para-

graph 84, and on that basis denies them. 85. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 85, and on that basis denies them. 86. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 86, and on that basis denies them. 87. Apple lacks sufficient information and belief as to the allegations in paragraph 87,

and on that basis denies them. 88. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 88, and on that basis denies them. 89. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 89, and on that basis denies them. 90. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 90, and on that basis denies them. 91. Apple admits that the allegations in paragraph 91 purport to recite from excerpts

of a letter and avers that, if and to the extent the alleged letter is ever held to be admissible, it will speak for itself. 92. On belief, Apple admits that publishers continue to sell print books to Amazon

under the wholesale model. Apple further admits that print book retailers compete with retailers of eBooks. Apple admits that under an agency model, publishers retain the ability to set prices for their eBooks. Apple denies the remaining allegations in paragraph 92. 93. Apple admits that under the agency model, the publishers retain the ability to set

the price of their eBooks. Apple denies that the agency model deprived consumers of the

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benefit of competition or stabilized the market. Apple denies the remaining allegations in paragraph 93. 94. Apple lacks sufficient information and belief as to the state of mind of the Pub-

lisher Defendants to respond to those allegations in paragraph 94, and that basis denies the allegations. Apple denies that it coordinated its activities with the Publisher Defendants to restrain trade. Apple denies the remaining allegations in paragraph 94. 95. Apple lacks sufficient information and belief as to the state of mind of the Pub-

lisher Defendants to respond to those allegations, and on that basis denies the allegations in paragraph 95. 96. Apple denies that it entered into an agreement to force Amazon to abandon its

pro-consumer pricing. Apple lacks sufficient information and belief to respond to the remaining allegations in paragraph 96, and on that basis denies them. 97. 98. Apple denies the allegations in paragraph 97. Apple denies the allegations in paragraph 98 as to itself. Apple lacks sufficient

information and belief to respond to the remaining allegations in paragraph 98, and on that basis denies them. 99. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 99, and on that basis denies them. 100. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 100, and on that basis denies them. 101. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 101, and on that basis denies them.

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102.

Apple lacks sufficient information and belief to respond to the allegations in para-

graph 102, and on that basis denies them. 103. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 103, and on that basis denies them. 104. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 104, and on that basis denies them. 105. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 105, and on that basis denies them, except Apple admits that the allegations in paragraph 105 purport to recite from excerpts of a news article and avers that, if and to the extent the news article is ever held to be admissible, it will speak for itself. 106. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 106, and on that basis denies them, except that Apple admits that during December 2009, there were reports in the press suggesting that publishers were planning to withhold eBook versions of certain new hardcover releases. 107. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 107, and on that basis denies them, except Apple admits that during December 2009, there were press reports suggesting that publishers were planning to withhold eBook versions of certain new hardcover releases. 108. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 108, and on that basis denies them. 109. Apple lacks sufficient information and belief as to the state of mind of the Pub-

lisher Defendants to respond to those allegations, and on that basis denies the allegations in paragraph 109. Apple denies the remaining allegations in paragraph 109.

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110.

Apple lacks sufficient information and belief to respond to the allegations in para-

graph 110, and on that basis denies them. 111. Apple admits that it introduced the iPad and iBookstore to compete for the sale of

eBooks with all of its competitors. Apple lacks sufficient information and belief as to the state of mind of the Publisher Defendants to respond to the remaining allegations in paragraph 111, and on that basis denies them. 112. 113. 114. Apple denies the allegations in paragraph 112. Apple denies the allegations in paragraph 113. Apple admits that part of its motivation to start an iBookstore was to generate

revenue and profits for the corporation and its shareholders and to avoid negative margins that it believed Amazon was incurring as it sold certain bestselling eBooks below cost. Apple admits that it manufactures mobile devices that are used to distribute, store and access digital media, through the iOS platform. Apple admits that consumers can download digital media through, among other e-retailers, Apples App Store and the iTunes Store. Apple denies, however, that it is a dominant manufacturer of such devices. Apple otherwise denies the allegations in paragraph 114. 115. Apple, on belief, admits that Amazon has sought to establish the dominance of its

single purpose eReader through strategic loss-leader pricing on eBooks. Apple denies the remaining allegations in paragraph 115. 116. Apple admits that Amazon has introduced the Kindle Fire Tablet, and that it is a

competitive product to the iPad for certain uses, but denies the remaining allegations in paragraph 116. 117. Apple denies the allegations in paragraph 117.

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118.

Apple lacks sufficient information and belief to respond to the allegations in para-

graph 118, and on that basis denies them, except Apple admits that Apples App store offers 70% of royalties to software application publishers. 119. 120. 121. 122. 123. Apple denies the allegations in paragraph 119. Apple denies the allegations in paragraph 120. Apple denies the allegations in paragraph 121. Apple denies the allegation in paragraph 122. Apple admits the allegations in paragraph 123, except denies any implication that

its agreements with the Publisher Defendants were multi-lateral. 124. Apple admits that it entered into eBook distribution agreements with each of the

Publisher Defendants under which Apple agrees to serve as an agent of the publishers. Those agreements are the best evidence of their contents. Apple lacks sufficient information and belief to respond to the allegations in paragraph 124 regarding any other eBook retailers distribution agreements with the Publisher Defendants, and on that basis denies them. 125. Apple responds that paragraph 125 generally appears to provide an accurate high-

level description of the wholesale model that traditionally has been used to distribute print books. Apple has never participated in the print book business, and therefore lacks sufficient information and belief to respond beyond that. On belief, Apple admits that Amazon has, at times, set a $9.99 price level for certain newly released titles, even though Amazon purchases the content for near or above $9.99. Apple denies the remaining allegations in paragraph 125. 126. Apple admits that it entered into eBook distribution agreements with the Publisher

Defendants during the same time period and that each agreement adopted the agency model. Apple denies the remaining allegations in paragraph 126, including the allegations that the

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agreements resulted in an unprecedented industry shift in pricing and sales model in the book industry. 127. Apple denies the allegations in paragraph 127 and avers that the referenced

agreements are the best evidence of their contents. 128. 129. 130. 131. 132. 133. Apple denies the allegations in paragraph 128. Apple denies the allegations in paragraph 129. Apple denies the allegations in paragraph 130. Apple denies the allegations in paragraph 131. Apple denies the allegations in paragraph 132. Apple admits that it engaged in individual, but simultaneous, negotiations with

each of the Publisher Defendants and further admits that it entered into agreements with each of the Publisher Defendants within days of each other. Apple denies the remaining allegations in paragraph 133, except that Apple admits that the final agreements provide that Apples commission is 30% of the eBook retail price and admits that the agreements include an MFN provision. 134. Apple denies the allegations in paragraph 134, and avers that the allegations in

paragraph 134 mischaracterize the alleged statement of Steve Jobs. 135. 136. Apple denies the allegations in paragraph 135. Apple lacks sufficient information and belief as to the allegations in paragraph

136, and on that basis denies them. 137. Apple lacks sufficient information and belief as to the allegations in paragraph

137 and on that basis denies them, except that Apple admits, on belief, that Amazon had a very high share (possibly approaching 90%) of eBook sales volume when Apple entered the eBook retail business in 2010.

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138.

Apple lacks sufficient information and belief as to the allegations in paragraph

138, and on that basis denies them. 139. Apple lacks sufficient information and belief as to the allegations in paragraph

139, and on that basis denies them, except that Apple admits, on belief, that Amazon had a substantial share of eBook sales at the time Apple entered into the business, and it continues to be the dominant eBook distributor. 140. Apple admits eBooks sold through its iBookstore can only be read on Apple de-

vices. Apple specifically denies that the iPad would not help a publisher tap into a new customer market. Apple lacks sufficient information and belief as to the remaining allegations in paragraph 140, and on that basis denies them. 141. 142. Apple denies the allegations in paragraph 141. Apple lacks sufficient information and belief as to the state of mind of the Pub-

lisher Defendants to respond to the allegations in paragraph 142, and on that basis denies them. 143. Apple lacks sufficient information and belief as to the allegations in paragraph

143, and on that basis denies them. 144. Apple lacks sufficient information and belief as to the state of mind of the pub-

lisher defendants to respond to the allegations in paragraph 144, and on that basis denies them. 145. Apple denies that the agency model of eBook distribution was a radical switch

and further denies that Amazon was the true target of the negotiations between the Publisher Defendants and Apple. Apple lacks sufficient information and belief to respond to the remaining allegations in paragraph 145, and on that basis denies them. 146. Apple lacks sufficient information and belief as to the allegations in paragraph

146, and on that basis denies them.

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147.

Apple lacks sufficient information and belief as to the allegations in paragraph

147, and on that basis denies them. 148. Apple lacks sufficient information and belief as to the allegations in paragraph

148, and on that basis denies them. 149. Apple lacks sufficient information and belief as to the allegations in paragraph

149, and on that basis denies them, except that Apple specifically admits its distribution agreement with Macmillan contained an MFN, and Apple specifically denies that Apple and Macmillan agreed to a pricing formulae and MFN Clauses, assuring themselves that Amazon would be closed out of the market unless Amazon agreed to allow the Publisher Defendants to raise prices. 150. Apple lacks sufficient information and belief as to the allegations in paragraph

150, and on that basis denies them. 151. Apple lacks sufficient information and belief as to the allegations in paragraph

151, and on that basis denies them. 152. Apple lacks sufficient information and belief as to the allegations in paragraph

152, and on that basis denies them. 153. Apple lacks sufficient information and belief as to the allegations in paragraph

153, and on that basis denies them. 154. Apple lacks sufficient information and belief as to the allegations in paragraph

154, and on that basis denies them. 155. Apple lacks sufficient information and belief as to the allegations in paragraph

155, and on that basis denies them.

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156.

Apple lacks sufficient information and belief as to the allegations in paragraph

156, and on that basis denies them. 157. Apple lacks sufficient information and belief as to the allegations in paragraph

157, and on that basis denies them. 158. Apple lacks sufficient information and belief as to the allegations in paragraph

158, and on that basis denies them. 159. Apple lacks sufficient information and belief as to the allegations in paragraph

159, and on that basis denies them. 160. Apple lacks sufficient information and belief as to the allegations in paragraph

160, and on that basis denies them. 161. 162. Apple denies the allegations in paragraph 161. Apple lacks sufficient information and belief as to the state of mind of Amazon to

respond to those allegations in paragraph 162, and on that basis denies them. Apple denies the remaining allegations in paragraph 162. 163. Apple lacks sufficient information and belief as to the allegations in Paragraph

163, and on that basis denies them. 164. Apple lacks sufficient information and belief as to the allegations in Paragraph

164, and on that basis denies them. 165. Apple lacks sufficient information and belief as to the allegations in Paragraph

165, and on that basis denies them. 166. Apple lacks sufficient information and belief as to the allegations in Paragraph

166, and on that basis denies them.

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167.

Apple lacks sufficient information and belief as to the allegations in Paragraph

167, and on that basis denies them. 168. Apple denies that its conduct has had real economic consequences to potential

class members and further denies that it has inflicted harm on consumers. Apple lacks sufficient information and belief as to the allegations in paragraph 168, and on that basis denies them. 169. Apple lacks sufficient information and belief as to the allegations in paragraph

169, and on that basis denies them. 170. Apple admits that it did not conspire with Random House. Apple lacks sufficient

information and belief as to the remaining allegations in paragraph 170, and on that basis denies them. 171. 172. 173. Apple denies the allegations in paragraph 171. Apple denies the allegations in paragraph 172. Apple lacks sufficient information and belief as to the allegations in paragraph

173, and on that basis denies them. 174. Apple admits that it entered into agency agreements with the Publisher Defend-

ants during the same time period, but denies that the agency model represented a radical, structural change to a business model that has been in existence for decades. Apple lacks sufficient information and belief as to the remaining allegations in paragraph 174, and on that basis denies them. 175. Apple lacks sufficient information and belief as to the allegations in paragraph

175, and on that basis denies them.

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176.

Apple lacks sufficient information and belief as to the allegations in paragraph

176, and on that basis denies them. 177. Apple lacks sufficient information and belief as to the allegations in paragraph

177, and on that basis denies them. 178. Apple lacks sufficient information and belief as to the allegations in paragraph

178, and on that basis denies them. 179. Apple lacks sufficient information and belief as to the allegations in paragraph

179, and on that basis denies them. 180. Apple lacks sufficient information and belief as to the allegations in paragraph

180, and on that basis denies them. 181. Apple lacks sufficient information and belief as to the allegations in paragraph

181, and on that basis denies them. 182. Apple lacks sufficient information and belief as to the allegations in paragraph

182, and on that basis denies them. 183. Apple admits that it sought to negotiate distribution agreements with the Publisher

Defendants that allowed it to require a publisher to offer a competitive price on a new release in the iBookstore. Apple denies the remaining allegations in paragraph 183. 184. 185. Apple denies the allegations in paragraph 184. Apple admits that its iPad and eReader applications compete with Amazons Kin-

dle and that Apple has been successful in selling eBooks and increased its market share from the zero market share it had upon entry, but lacks information and belief sufficient to admit or deny whether it has gained market share at the expense of Amazon and on that basis denies that

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allegation. Apple lacks sufficient information and belief as to the remaining allegations in paragraph 185, and on that basis denies them. 186. Apple lacks sufficient information and belief as to the allegations in paragraph

186, and on that basis denies them. 187. Apple lacks sufficient information and belief as to the allegations in paragraph

187, and on that basis denies them. 188. Apple denies that the price of eBooks has soared. Apple lacks sufficient infor-

mation and belief as to the allegations in paragraph 188, and on that basis denies them. 189. 190. 191. Apple denies the allegations in paragraph 189. Apple denies the allegations in paragraph 190. Apple admits that certain state authorities and the Department of Justice have ini-

tiated litigation in this venue. Apple denies the remaining allegations in paragraph 191. 192. Apple admits that the Texas Attorney General launched an inquiry. Apple fur-

ther admits that the allegations in paragraph 192 purport to recite from excerpts of an industry newsletter and avers that, if and to the extent the industry newsletter is ever held to be admissible, it will speak for itself. 193. Apple admits that the Connecticut Attorney General launched an inquiry. Ap-

ple further admits that the allegations in paragraph 193 purport to recite from excerpts of a press release and avers that, if and to the extent the press release is ever held to be admissible, it will speak for itself. 194. Apple admits that the allegations in paragraph 194 purport to recite from excerpts

of a press release and avers that, if and to the extent the press release is ever held to be admissible, it will speak for itself.

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195.

On information and belief, Apple admits that European Union antitrust regula-

tors made unannounced raids on eBook publishers. Apple admits that the remaining allegations in paragraph 195 purport to recite from excerpts of a press release and avers that, if and to the extent the press release is ever held to be admissible, it will speak for itself. 196. Apple admits that the allegations in paragraph 196 purport to recite from excerpts

of a press release and avers that, if and to the extent the press release is ever held to be admissible, it will speak for itself. 197. 198. 199. Apple admits the allegations in paragraph 197. Apple admits the allegations in paragraph 198. Apple admits the allegations in the first sentence in paragraph 199. Apple denies

that eBooks represent a distinct antitrust market and further denies that the geographic market is the entire United States. On belief, Apple admits the remaining allegations in paragraph 199. 200. To the extent the allegations in paragraph 200 are legal conclusions, no respon-

sive pleading is required. To the extent any response is required, Apple denies the allegations in paragraph 200. 201. 202. 203. Apple denies the allegations in paragraph 201. Apple denies the allegations in paragraph 202. Apple has never participated in the print book business, and therefore lacks suffi-

cient information and belief to respond to the allegations in paragraph 203, and on that basis denies them. 204. Apple denies that it participated in a conspiracy to restrict and increase the price

range of eBooks, and denies the remaining allegations in paragraph 204. 205. Apple denies the allegations in paragraph 205.

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206.

Apple admits that it was an eBook retailer prior to entering into the agency

agreements with the Publisher Defendants but denies that it set the prices of eBooks. Apple has always sold eBooks under the agency model. Apple lacks sufficient information and belief to respond to the remaining allegations in paragraph 206, and on that basis denies them. 207. Apple admits that, under its bilateral contracts with book publishers, each Pub-

lisher Defendant decides the price of its product in the retail marketplace, and Apples commission is 30% of the retail price. Those contracts are the best evidence of their contents. Apple lacks sufficient information and belief to respond to the remaining allegations in paragraph 207, and on that basis denies them. 208. Apple admits that its bilateral contract with each Publisher Defendant was the re-

sult of individual negotiations during January 2010, and that the resulting agreements have some similar terms, but they are not identical. Those contracts are the best evidence of their contents. Apple denies the remaining allegations in paragraph 208. 209. Apple admits that its individual agreement with each Publisher Defendant identi-

fies Apple as an agent of the contracting Publisher Defendant and that each agreement provides Apple will sell, market, and distribute eBooks on behalf of the publisher. Those contracts are the best evidence of their contents. Apple lacks sufficient information and belief to respond to the allegations in paragraph 209 regarding any other eBook retailers contractual agreements with the Publisher Defendants, and on that basis denies them. 210. Apple admits that it does not have the authority to set eBook prices under its

agency agreements with each Publisher Defendant. Apple alleges that it separately negotiated certain limitations on the prices charged by the Publisher Defendants. Those agreements are the best evidence of their contents. Apple lacks sufficient information and belief to respond to the

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allegations in paragraph 210 regarding any other eBook retailers contractual agreements with the Publisher Defendants, and on that basis denies them. 211. Apple admits that each of its agency agreements with the Publisher Defendants

provides that a 30% commission will be paid to Apple for the sale of a Publisher Defendants eBook. Apple lacks sufficient information and belief to respond to the allegations in paragraph 211 regarding any other eBook retailers contractual agreements with the Publisher Defendants, and on that basis denies them. 212. Apple admits that its agency agreements with each Publisher Defendant specify

Apples and the Publisher Defendants responsibilities under the individual agreements. Those agreements are the best evidence of their contents. Apple lacks sufficient information and belief to respond to the allegations in paragraph 212 regarding any other eBook retailers contractual agreements with the Publisher Defendants, and on that basis denies them. Apple denies any remaining allegations in paragraph 212. 213. Apple responds that the allegations in paragraph 213 generally appear to provide

an accurate high-level description of Apples agency agreements with the Publisher Defendants. Those agreements are the best evidence of their contents. Apple lacks sufficient information and belief to respond to the allegations in paragraph 213 regarding any other eBook retailers contractual agreements with the Publisher Defendants, and on that basis denies them. 214. Apple admits in general under its agency agreements that the Publisher Defend-

ants bear the credit risk from eBook sales to customers if the stated conditions are met, but the specific terms relating to accounts receivable and credit risk are not uniform. Apple further admits that there are return policies provided in each of its agency agreements, but alleges that they are not uniform. Apples agency agreements themselves are the best evidence of their

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contents. Apple lacks sufficient information and belief to respond to the allegations in paragraph 215 regarding any other eBook retailers contractual agreements with the Publisher Defendants, and on that basis denies them. 215. Apple admits that its agency agreements allow it to provide defined excerpts of

eBooks to customers at no charge, and that those excerpts need not be protected by Apples security solution. Apples agency agreements themselves are the best evidence of their contents. Apple lacks sufficient information and belief to respond to the allegations in paragraph 215 regarding any other eBook retailers contractual agreements with the Publisher Defendants, and on that basis denies them. 216. Apple admits the allegations in paragraph 216, except that Apple has certain lim-

ited rights to modify a file. Apple lacks sufficient information and belief to respond to the allegations in paragraph 216 regarding any other eBook retailers contractual agreements with the Publisher Defendants, and on that basis denies them. 217. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 217, and on that basis denies them. 218. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 218, and on that basis denies them. 219. Apple lacks sufficient information and belief to respond to the allegations in para-

graph 219, and on that basis denies them. 220. Apple admits that the allegations in paragraph 220 purport to recite excerpts of

the iBookstore Terms and Conditions and avers that, if and to the extent the Terms and Conditions are ever held to be admissible, they will speak for themselves. Apple denies any remaining allegations in paragraph 220.

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221.

Apple admits that the allegations in paragraph 221 purport to recite excerpts of

the Amazons Kindle License Agreement and Terms of Use and avers that, if and to the extent the Kindle License Agreement is ever held to be admissible, it will speak for itself. Apple lacks sufficient information and belief to respond to the allegations in paragraph 221, and on that basis denies them. 222. Apple admits that the Complaint purports to contain screen captures from Ama-

zons website that indicate that the eBook price was set by the publisher. Apple lacks sufficient information and belief as to the allegations in paragraph 222, and on that basis denies them. 223. Apple admits that the Complaint purports to contain a screen capture of a pur-

chase confirmation from Amazon that indicates the publisher is the entity selling the eBook to the purchaser. Apple lacks sufficient information and belief as to the allegations in paragraph 223, and on that basis denies them. 224. To the extent the allegations in paragraph 224 are legal conclusions, no respon-

sive pleading is required. To the extent any response is required, Apple admits that under its agency agreements with the Publisher Defendants, Apple acts as an agent of the Publisher Defendants. Apple denies the remaining allegations in paragraph 224. 225. The allegations in paragraph 225 are legal conclusions, and therefore no respon-

sive pleading is required. To the extent any response is required, Apple denies the allegations in paragraph 225. 226. The allegations in paragraph 226 are legal conclusions, and therefore no respon-

sive pleading is required. To the extent any response is required, Apple denies the allegations in paragraph 226.

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227.

The allegations in paragraph 227 are legal conclusions, and therefore no respon-

sive pleading is required. To the extent any response is required, Apple denies the allegations in paragraph 227, and specifically denies that it engaged in a conspiracy among horizontal competitors. Apple is not a publisher and is not in competition with the other Defendants. 228. Apple admits that Plaintiffs purport to bring this case as a class action on behalf

of the putative class alleged, but denies that this case may be properly maintained as a class action and denies the remaining allegations in paragraph 228. 229. To the extent the allegations in paragraph 229 are legal conclusions, no respon-

sive pleading is required. To the extent any response is required, Apple lacks sufficient information and belief to respond to the allegations in paragraph 229, and on that basis denies them. 230. To the extent the allegations in paragraph 230 are legal conclusions, no respon-

sive pleading is required. To the extent any response is required, Apple denies the allegations in paragraph 230. 231. The allegations in paragraph 231 are legal conclusions, and therefore no respon-

sive pleading is required. To the extent any response is required, Apple denies the allegations in paragraph 231. 232. The allegations in paragraph 232 are legal conclusions, and therefore no respon-

sive pleading is required. To the extent any response is required, Apple lacks sufficient information and belief to respond to the allegations in paragraph 232, and on that basis denies them. 233. The allegations in paragraph 233 are legal conclusions, and therefore no respon-

sive pleading is required. To the extent any response is required, Apple denies the allegations in paragraph 233.

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234.

Apple admits that its corporate headquarters are located in Cupertino, California,

but otherwise denies the allegations in paragraph 234. Apple specifically denies that it created, adopted, ratified, and/or implemented any unlawful or anticompetitive conduct. 235. Apple admits that it is incorporated in California but denies that it served as an

intermediary for communications between publishers. Apple denies any remaining allegations in paragraph 235. 236. Apple admits that Steve Jobs is the former CEO and Chairman of Apple but de-

nies the remaining allegations in paragraph 236. 237. Apple admits that paragraph 237 purports to recite from excerpts of the terms and

conditions of purchase from the iBookstore and avers that, if and to the extent the terms and conditions are ever held to be admissible, they will speak for themselves. Apple denies the remaining allegations in paragraph 237. 238. Apple admits that Plaintiffs purport to bring this case as a class action under Rule

23 of the Federal Rules of Civil Procedure, but denies that this case may be properly maintained as a class action and denies the remaining allegations in paragraph 238. 239. Apple admits that Plaintiffs purport to bring this case as a class action by indirect

purchasers of eBooks in the event Plaintiffs are not a direct purchaser and the Court determines that California law does not apply. Apple denies that this case may be properly maintained as a class action and denies the remaining allegations in paragraph 239. 240. Apple admits that Plaintiffs purport to bring this case as a class action under vari-

ous state laws. Apple denies the remaining allegations in paragraph 240. 241. herein. Apple incorporates its response to paragraphs 1 through 240 as if fully set forth

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242.

Apple denies the allegations in paragraph 242. The alleged conduct is subject to

the rule of reason and, to the extent constituting an agreement within the meaning of Section 1 of the Sherman Act, Plaintiffs must prove a relevant product market in order to establish a violation of Section 1. Apple denies that eBooks defines a separate and distinct relevant product market. 243. 244. 245. 246. Apple denies the allegations in paragraph 243. Apple denies the allegations in paragraph 244. Apple denies the allegations in paragraph 245. Apple lacks sufficient information and belief as to whether Plaintiffs and the puta-

tive class members are direct purchasers of eBooks, and on that basis denies the allegations in paragraph 246, except Apple admits that, in selling eBooks, it acts as an agent for the Publisher Defendants. 247. 248. Apple denies the allegations in paragraph 247. Apple incorporates its response to paragraphs 1 through 247 as if fully set forth

herein. Apple admits that Plaintiffs purport to assert a claim on behalf of a putative class or subclass under the Cartwright Act if the Court rules the Sherman Act does not apply. Apple denies the remaining allegations in paragraph 248. 249. 250. 251. herein. Apple denies the allegations in paragraph 249. Apple denies the allegations in paragraph 250. Apple incorporates its response to paragraphs 1 through 250 as if fully set forth

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252.

Apple admits that its activities associated with its sale of eBooks took place in in-

trastate commerce in each of the states listed in paragraphs 253-280 but denies the remaining allegations in paragraph 252. 253. 254. 255. 256. 257. 258. 259. 260. 261. 262. 263. 264. 265. 266. 267. 268. 269. 270. 271. 272. Apple denies the allegations in paragraph 253. Apple denies the allegations in paragraph 254. Apple denies the allegations in paragraph 255. Apple denies the allegations in paragraph 256. Apple denies the allegations in paragraph 257. Apple denies the allegations in paragraph 258. Apple denies the allegations in paragraph 259. Apple denies the allegations in paragraph 260. Apple denies the allegations in paragraph 261. Apple denies the allegations in paragraph 262. Apple denies the allegations in paragraph 263. Apple denies the allegations in paragraph 264. Apple denies the allegations in paragraph 265. Apple denies the allegations in paragraph 266. Apple denies the allegations in paragraph 267. Apple denies the allegations in paragraph 268. Apple denies the allegations in paragraph 269. Apple denies the allegations in paragraph 270. Apple denies the allegations in paragraph 271. Apple denies the allegations in paragraph 272.

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273. 274. 275. 276. 277. 278. 279. 280. 281. 282. herein. 283. 284. 285.

Apple denies the allegations in paragraph 273. Apple denies the allegations in paragraph 274. Apple denies the allegations in paragraph 275. Apple denies the allegations in paragraph 276. Apple denies the allegations in paragraph 277. Apple denies the allegations in paragraph 278. Apple denies the allegations in paragraph 279. Apple denies the allegations in paragraph 280. Apple denies the allegations in paragraph 281. Apple incorporates its response to paragraphs 1 through 282 as if fully set forth

Apple denies the allegations in paragraph 283. Apple denies the allegations in paragraph 284. Apple admits that Plaintiffs demand a trial by jury and hereby demands a trial by

jury as to all issues so triable. ANSWER TO CLAIM FOR RELIEF Apple denies that any of the requested relief is properly awarded. III. SEPARATE AND ADDITIONAL DEFENSES Without assuming any burden of proof that it would not otherwise bear, Apple also asserts the following separate and additional defenses:

FIRST SEPARATE AND ADDITIONAL DEFENSE The relief sought in the Complaint is not in the public interest. 37

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SECOND SEPARATE AND ADDITIONAL DEFENSE The Complaint fails to state a claim for relief. THIRD SEPARATE AND ADDITIONAL DEFENS Plaintiffs have failed to join all parties necessary for a just adjudication of its purported claims. FOURTH SEPARATE AND ADDITIONAL DEFENSE Apple alleges that, without admitting any liability whatsoever, at all times its conduct was reasonable and that its actions were undertaken in good faith to advance legitimate business interests and had the effect of promoting, encouraging, and increasing competition. FIFTH SEPARATE AND ADDITIONAL DEFENSE The Complaint is barred, in whole or in part, insofar as it challenges or seeks to impair the exercise of rights protected by the First Amendment of the United States Constitution and by the Noerr-Pennington doctrine. SIXTH SEPARATE AND ADDITIONAL DEFENSE Plaintiffs claims, and the claims of a putative class, will be extinguished, in whole or in part, by any judgment on or releases of the claims brought by certain states in their parens patriae capacity in The State of Texas, et al. v. Penguin Group, et al., 1:12cv-03394-DLC and it is inequitable to allow both sets of overlapping claims to proceed simultaneously. SEVENTH SEPARATE AND ADDITIONAL DEFENSE Apple has insufficient knowledge or information to determine whether it may have additional, as yet unstated, separate defenses available. Apple has not knowingly and intentionally waived any applicable separate and additional defenses and reserves the right to raise additional defenses as they become known to it through discovery in this matter. Apple further reserves the 38

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right to amend this Answer to add, delete, or modify defenses based upon legal theories that may or will be divulged through clarification of Plaintiffs Complaint, through discovery, or through further legal analysis of Plaintiffs position in this litigation. Dated: May 29, 2012 Richard Parker (admitted pro hac vice) OMELVENY & MYERS LLP 1625 Eye Street, NW Washington, DC 20006 T: 202.383.5380; F: 202.383.5414 rparker@omm.com Respectfully submitted, /s/ Daniel S. Floyd Daniel S. Floyd (admitted pro hac vice) Daniel G. Swanson (admitted pro hac vice) GIBSON, DUNN & CRUTCHER LLP 333 South Grand Avenue Los Angeles, CA 90071-3197 T: 213.229.7000; F: 213.229.7520 dfloyd@gibsondunn.com dswanson@gibsondunn.com Attorneys for Defendant Apple Inc.

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