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44C/SDNY2010 CIVIL COVER SHEET!12 CVThe JS-44 civil cover sheet and (ho Information contained heroin nelthor replace nor supplement the riling and service ofpleadings or other papers as required by law. except as provided by local rules of court This form approved by theJudical Conference ,f the United States in September 1974. is required for use ofthe Clerk ofCourt for the purpose ofinitiating th e civil docke t sheet.

States ofAmerica

APR 11 2012

(FIRM NAME. ADDRESS. AND TELEPHONE NUMBERMcCuaig (Attorney ofRecord)Attachment B, "PlaintiffsAttorneys"

DEFENDANTSApple, Inc., etal.See Attachment A, "Defendants"ATTORNEYS(IF KNOWN)See Attachment C, "Defendants* Attorneys"

OF ACTION (CITE the us.civil statute unoer which you are filing ano write abrief statement ofCAUSE)(OO NOT CITE JURISDICTIONAL STATUTES UNLESS DIVERSITY)15U.S.C. 1,Anticompetitive agreement inrestraint of tradethis or asimilar case been previously filed in SONY at any time? No?Q Yes? [7] Judge Previously Assigned Cotewas this case VolD Irtvo). D Dismissed. NoB Yes D If yes, give date &ase No.AN(xfINONE BOX ONLY) NATURE OF SUIT

ACTIONS UNDER STATUTES

a

FORFEITURE/PENALTY BANKRUPTCY( 1422 APPEAL

28 US C 15 8{ 1423 WITHDRAWAL28USC 15 7

OTHER STATUTES

INSURANCEMARINEMILLER ACTNEGOTIABLEINSTRUMENTRECOVERYOFOVERPAYMENT*ENFORCEMENTOFJUDGMENT

RECOVERYOFDEFAULTEOSTUOENT LOANS(EXCLVETERANS)RECOVERYOFOVERPAYMENTOFVETERAfTS BENEFITSSTOCKHOLDERS SUITSOTHERCONTRACTCONTRACT PRODUCTLIABILITYFRANCHISE

PERSONAL INJURY PERSONAL INJURY( | 3 62 PERSONAL INJURY -

MED MALPRACTICE(1365 PERSONAL INJURYPROOUCT LIABILITY

(1368 ASBESTOS PERSONALINJURY PROOUCTLIABILITY

PERSONAL PROPERTY{ 1370 OTHER FRAUO{ j371 TRUTH IN LENDINGI 1380 OTHERPERSONAL

PROPERTY OAMAGE( | 3 85 PROPERTY DAMAGEPROOUCT LIABILITY

(1310(1315CI320( |330

(|340(1345I 1350t | 35S( |360

AIRPLANEAIRPLANE PROOUCTLIABILITYASSAULT, LIBEL 4SLANOERFEDERALEMPLOYERS"LIABILITYMARINEMARINE PRODUCTLIABILITYMOTOR VEHICLEMOTOR VEHICLEPROOUCT LIABILITYOTHER PERSONALINJURY

ACTIONSUNDERSTATUTESCM*. RIGHTS( 1441 VOT INGt )442 EMPLOYMENT( 1443 HOUSING/

ACCOMMODATIONS( 1444 WELFARE[ |445 AMERICANSWITH

DISABILITIES-EMPLOYMENT(1446 AM6WCANSWITHDISAWLmES OTHER( 1440 OTHERCIVILRIGHTS

PROPERTY

LANO CONDEMNATIONFORECLOSURERENT LEASE &EJECTMENTTORTS TO LANDTORT PRODUCTLIABILITYALLOTHERREAL PROPERTY

PRISONER PETITIONS( | 510 MOTIONS TO

VACATE SENTENCE EMIGRATION20USC22SS( JS30 HABEASCORPUS

( |53S OEATHPENALTY( |S40 MANDAMUSOTHERI |S50 CIVILRIGHTS{ 1555 PRISON CONDITION

11610( |620

AGRICULTUREOTHER FOOO&ORUG

(1625 ORUG RELATEDSE I ZURE OFPROPERTY21 USC 88 1LIQUOR LAWSRR4 TRUCKAIRLINE REGSOCCUPATIONALSAFETY/HEALTHOTHER

( 1630( |640(1650( 1660

PROPERTY RIGHTS( 1820 COPYRIGHTS( 1830 PATENT( 1840 TRADEMARK

( 1690

LABOR

( |710(1720IK30

( |740(1790(1791

SOCIAL SECURITY( J861 HIA(1395ff)( j862 BLACK LUNG (923)( j863 OIWC/DIWW (405(g))( |864 SSID TITLE XVI( ]86S RSI (405(g))

FAIR LABORSTANOARDSACTLABOR/MGMTRELATIONSLABOR/MGMTREPORTING 4DISCLOSUREACTRAILWAYLABORACTOTHERLABORLITIGATIONEMPLRETINCSECURITY ACT

FEDERAL TAX SUITSI 1870 TAXES(U.S.Plaintiffor

Oefendant)( 1871 IRS-THIRD PARTY

26 US C 7609

( 1462 NATURALIZATIONAPPLICATION

(1463 HABEASCORPUS-AUENOETAINEE

(1465 OTHER IMMIGRATIONACTIONS

ok-

( 1400XI410( 1430( |4S0(|460( | 470

(|480( |490( |810( |8S0

(1875

( 1890(1891[ 1892( |893( |894(1895( | 900

11950

STATEREAPPORTIONMENTANT ITRUSTBANKS & BANKINGCOMMERCE06PORTAT1ONRACKETEER INFLUENCED 4CORRUPTORGANIZATION AC T(RICO)CONSUMER CREDITCABLE/SATELLITE TVSELECTIVE SERVICESECURITIES/COMMODITIES/EXCHANGECUSTOMERCHALLENGE12 US C 3410OTHER STATUTORYACTIONSAGRICULTURAL ACTSECONOMICSTABILIZATION ACTENVIRONMENTALMATTERSENERGYALLOCATION AC TFREEDOM OFINFORMATION AC TAPPEALOF FE EDETERMINATIONUNDER EQUAL ACCESSTO JUSTICECONSTITUTIONAUTYOF STATE STATUTES

Checkif demandedincomplaint:CHECK IF THIS ISACLASS ACTIONUNDER F.R.C.P. 23 DO YOU CLAIM THIS CASE IS RELATED TOACIVIL CASE NOWPENDING INSONY?IPSO, STATE:

JUOGECote*See Attachment E, "Statement of Related Case"NOTE: Please submit attheBmeoffiling anexplanation ofwhy casesaredeemed related.

$_ OTHERYESonly ifdemanded incomplaintDEMAND: O YES 0 NO

.DOCKET NUMBER1:11 """1-02293

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UnitedStates v.Apple, Inc. et al. .At t a chmen t A to C iv il C o v er S h ee t

De fendan t s

Apple, Inc.Hachette Book Group, Inc.HarperCollins Publishers L.L.C.Verlagsgruppe Georg von Holtzbrinck GmbHHoltzbrinck Publishers, LLC d/b/a MacmillanThe Penguin Group, A Division of Pearson PLCPenguin Group (USA), Inc.Simon & Schuster, Inc.

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UnitedStates v.Apple, Inc. et al.At t a chmen t B t o C iv il Cov er Sh ee t

Plaintiffs AttorneysMark W. Ryanmark.w.ryan@usdoj .govDavid C. Kullydavid.kully@usdoj .govDaniel McCuaig*daniel.mccuaig@usdoj .govNathan P. Suttonnathan.sutton@usdoj.govMary BethMcGeemary.beth.mcgee@usdoj.govOwen M. Kendlerowen.kendler@usdoj.govWilliam H. Jonesbill.jones2@usdoj.govStephen T. Fairchildstephen.fairchild@usdoj.gov

United States Department of JusticeAntitrust Division, Litigation III450 5th Street, NW, Suite 4000Washington, D.C. 20530Telephone: (202) 307-0520Facsimile: (202) 514-7308*Attorney ofRecord

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UnitedStates v. Apple, Inc. et al.At t a chmen t C to Civ i l Cove r Shee t

Defendants' AttorneysApple, Inc.Richa rd Pa rke rO'Melveny & Myers LLP1625 Eye Street, NWWashington, DC 20006rparker@omm.comHachette Book Group, Inc.P au l Y deFreshfields Bruckhaus Deringer US LLP701 Pennsylvania Avenue, NWSuite 600Washington, DC 20004-2692HarperCollins Publishers L.L.C.Clifford H. AronsonSkadden, Arps, Slate,Meagher & Flom LLPFour Times SquareNew York, NY 10036-6522Verlagsgruppe Georg von Holtzbrinck GmbH & Holtzbrinck Publishers, LLC d/b/aMacmil lanJ oe l M . M it ni ckSidley Austin LLP787 Seventh AvenueNew York, NY 10019The Penguin Group, A Division of Pearson PLC & Penguin Group (USA), Inc.Daniel F. MclnnisAkin Gump Strauss Hauer & Feld LLP1333 New Hampshire Avenue, NWWashington, DC 20036-1564Simon & Schuster, Inc.Helene D. JaffeP roskauer Rose LLPEleven Times SquareNew York, NY 10036-8299

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UnitedStates v. Apple, Inc. et al.At t a chmen t D to Civi l Cover Sheet

Defendant(s) Address(es) and County(ies)Apple, Inc.1 Infinite LoopCupertino, CA 95014Hachette Book Group, Inc.237 Pa rk AvenueNew York, NY 10017HarperCollins Publishers L.L.C.10 E. 53rd S t ree tNew York, NY 10022Verlagsgruppe Georg von Holtzbrinck GmbHGansheidestralie 26Stuttgart 70184GermanyHoltzbrinck Publishers, LLC d/b/a Macmillan175 Fifth AvenueNew York, NY 10010The Penguin Group, A Division of Pearson PLC80 S tr an dLondon WC2R 0RLUnited KingdomPenguin Group (USA) Inc.375 Hudson StreetNew York, NY 10014Simon & Schuster, Inc.1230 Avenue o f t he Amer ica sNew York, NY 10020

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UnitedStates v. Apple, Inc. et al.At t a chmen t E t o C iv il Cove r Shee t

S ta temen t o f Related Case

Pursuant to Rule for the Division ofBusiness Among District Judges (SouthernDistrict) 13, the United States respectfully requests that this case, UnitedStates v.Apple,Inc. et al., be designated as related to In re Electronic BooksAntitrustLitigation, No.1:1l-md-02293 (DLC), presently pending before the Honorable Judge Denise Cote. Bothcases involve allegations of violations of Section 1 of the ShermanAct, 15 U.S.C. 1, inconnection wit h t he sale o f electronic books in t h e Un it ed States. There i s subs tant ia loverlap as to the identity of the defendants as well as the factual allegations giving rise tothe antitrust claims in the different cases. The United States believes that assigning thiscase to Judge Cote will therefore promote judicial efficiency and facilitate reasonablecoordination among the parties to the proceedings. At this time, the United States has noplans to move to join these cases for trial pursuant to Rule 13(e).

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UNITED STATES D IS T RIC T COURTFOR THE SOUTHERN DISTRICT OF NEW YORK

UNITED STATES OF AMERICA,Plaintiff, 12 CV 2826

APPLE, INC.,HACHETTE BOOK GROUP, INC.,HARPERCOLLINS PUBLISHERS L.L.C.,VERLAGSGRUPPE GEORG VON

HOLTZBRINCK GMBH,HOLTZBRINCK PUBLISHERS, LLC

d/b/a MACMILLAN,THE PENGUIN GROUP,A DIVISION OF PEARSON PLC,PENGUIN GROUP (USA), INC., and

SIMON & SCHUSTER, INC.,Defendants.

Civil Action No.

ro

O'.'~ 'J . ;.....

oT ' lS !

> 1

i Or< CO

COMPLA IN T

The United States ofAmerica, acting under the direction of the Attorney General of theUnited States, brings this civil antitrust action against Defendants Apple, Inc. ("Apple");Hachette Book Group, Inc. ("Hachette"); HarperCollins Publishers L.L.C. ("HarperCollins");Verlagsgruppe Georg von Holtzbrinck GmbH and Holtzbrinck Publishers, LLC d/b/a Macmillan(collectively, "Macmillan"); The Penguin Group, a division ofPearson pic and Penguin Group(USA), Inc. (collectively, "Penguin"); and Simon & Schuster, Inc. ("Simon & Schuster";collectively with Hachette, HarperCollins, Macmillan, and Penguin, "Publisher Defendants") toobtain equitable relief to prevent and remedy violations of Section 1 of the Sherman Act, 15U.S.C. 1.

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Plaintiff alleges:I. INTRODUCTION

1. Technology has brought revolutionary change to the business of publishing andsellingbooks, includingthe dramatic explosion in sales of "e-books"that is, books sold toconsumers in electronic form and read on a variety of electronic devices, including dedicated e-readers (such as the Kindle or the Nook), multipurpose tablets, smartphones and personalcomputers. Consumers reap a variety of benefits from e-books, including 24-hour access toproductwith near-instantdelivery, easier portability and storage, and adjustable font size. E-books also are considerably cheaper to produce and distribute than physical (or "print") books.

2. E-book sales have been increasing rapidly ever since Amazon released its firstKindle device in November of 2007. In developing and then mass marketing its Kindle e-readerand associated e-book content, Amazon substantially increased the retail market for e-books.One of Amazon's most successful marketing strategies was to lower substantially the price ofnewly released and bestselling e-books to $9.99.

3. Publishers saw the rise in e-books, and particularly Amazon's price discounting,as a substantial challenge to their traditional business model. The Publisher Defendants fearedthat lower retail prices for e-books might lead eventually to lower wholesale prices for e-books,lower prices for print books, or other consequences the publishers hoped to avoid. EachPublisher Defendant desired higher retail e-book prices across the industry before "$9.99"became an entrenched consumer expectation. By the end of 2009, however, the PublisherDefendants had concluded that unilateral efforts to move Amazon away from its practice ofoffering low retail prices would not work, and they thereafter conspired to raise retail e-bookprices and to otherwise limit competition in the sale of e-books. To effectuate their conspiracy,

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the Publisher Defendants teamed upwithDefendant Apple, whichshared the samegoalofrestraining retail price competition in the sale of e-books.

4. TheDefendants' conspiracy to limit e-bookprice competition cametogetherasthePublisher Defendants werejointly devising schemesto limitAmazon's ability to discount e-books and Defendant Apple was preparing to launch its electronic tablet, the iPad, andconsidering whether it should selle-books thatcould be read onthe newdevice. Apple had longbelieved it would be able to "trounce Amazon by opening up [its] own ebook store," but theintense price competition that prevailed among e-book retailers in late 2009 had driven the retailprice of popular e-books to $9.99 and had reduced retailermargins on e-books to levels thatApple found unattractive. As a result of discussions withthePublisher Defendants, Applelearnedthat the Publisher Defendants shareda commonobjectivewith Apple to limit e-bookretail pricecompetition, andthat thePublisherDefendants also desired to have popular e-bookretail prices stabilizeat levels significantly higher than$9.99. Together, Appleand the PublisherDefendants reached an agreementwherebyretail price competitionwould cease (which all theconspirators desired), retail e-book prices would increase significantly (which the PublisherDefendants desired), and Applewould be guaranteeda 30 percent "commission" on each e-bookit sold (which Apple desired).

5. To accomplish the goal of raising e-bookpricesand otherwise limiting retailcompetitionfor e-books,Apple and the Publisher Defendantsjointly agreed to alter the businessmodel governing the relationship between publishers and retailers. Prior to the conspiracy, bothprint books and e-books were sold under the longstanding "wholesale model." Under this model,publishers sold books to retailers, and retailers, as the owners of the books, had the freedom toestablishretail prices. Defendants weredetermined to end the robust retail price competition in

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e-books thatprevailed, tothebenefit of consumers, under thewholesale model. They thereforeagreed jointlyto replace thewholesale model for selling e-books withan "agency model."Under theagency model, publishers would take control of retail pricing by appointing retailers as"agents"whowouldhavenopower to alter the retailpricesset by the publishers. As a result, thepublishers could end price competition among retailers andraise theprices consumers payfore-books through theadoption of identical pricingtiers. Thischange in business model would nothave occurredwithout the conspiracyamong the Defendants.

6. Apple facilitated thePublisher Defendants' collective effort toend retail pricecompetition bycoordinating their transition toan agency model across all retailers. Appleclearly understood that itsparticipation inthis scheme would result in higher prices toconsumers. AsApple CEOSteveJobsdescribed hiscompany's strategy for negotiating withthePublisher Defendants, "We'llgoto [an] agency model, where you setthe price, and weget our30%, and yes, thecustomer pays a little more, butthat'swhat you want anyway." Apple wasperfectly willing to help thePublisher Defendants obtain their objective of higher prices forconsumers by ending Amazon's "$9.99" price program as long asApple wasguaranteed its30percent margin and could avoid retail price competition fromAmazon.

7. The plan - what Apple proudly described as an "aikido move" - worked. Overthree days in January 2010, each Publisher Defendant entered into a functionally identicalagency contract with Apple that would go into effect simultaneously inApril 2010 and "chang[e]the industry permanently." These"AppleAgencyAgreements" conferredon the PublisherDefendants the power to setApple's retail prices for e-books, while granting Apple theassurancethatthePublisher Defendants would raise retail e-book prices at allothere-book outlets, too.Instead of $9.99, electronic versions ofbestsellers and newly released titles would bepriced

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according to a set of price tiers contained in each of the Apple Agency Agreements thatdetermined de facto retail e-book prices as a function of the title's hardcover list price. Allbestselling and newly released titles bearing a hardcover list price between $25.01 and $35.00,for example,would be priced at $12.99, $14.99, or $16.99,with the retail e-book price increasingin relation to the hardcover list price.

8. After executing the Apple Agency Agreements, the Publisher Defendants all thenquickly acted to complete the scheme by imposing agency agreements on all their other retailers.As a direct result, those retailers lost their ability to compete on price, including their ability tosell the most popular e-books for $9.99 or for other low prices. Once in control of retail prices,the Publisher Defendants limited retail price competition among themselves. Millions of e-books thatwould have sold at retail for $9.99 or for other low prices instead sold for the pricesindicatedby the price schedules included in the Apple Agency Agreementsgenerally, $12.99or $14.99. Otherpriceand non-price competition amonge-bookpublishers and amonge-bookretailers also was unlawfully eliminated to the detriment ofU.S. consumers.

9. The purpose of this lawsuit is to enjoin the Publisher Defendants and Apple fromfurther violationsof the nation's antitrust laws and to restore the competition that has been lostdue to the Publisher Defendants' and Apple's illegal acts.

10. Defendants' ongoing conspiracy and agreement have caused e-book consumers topaytens ofmillionsof dollarsmore fore-booksthan they otherwisewouldhave paid.

11. The United States, through this suit, asks this Court to declare Defendants 'conduct illegal and to enter injunctive reliefto prevent further injury to consumers in the UnitedStates.

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II . DEFENDANTS

12. Apple, Inc. has its principal place of business at 1 Infinite Loop, Cupertino, CA95014. Amongmany other businesses,Apple, Inc. distributes e-books through its iBookstore.

13. Hachette Book Group, Inc. has its principal place of business at 237 Park Avenue,New York, NY 10017. It publishes e-books and print books through publishers such as Little,Brown, and Company and Grand Central Publishing.

14. HarperCollins Publishers L.L.C. has its principal place ofbusiness at 10 E. 53rdStreet, New York, NY 10022. It publishes e-books and print books through publishers such asHarper and William Morrow.

15. Holtzbrinck Publishers, LLC d/b/a Macmillan has its principal place ofbusinessat 175 Fifth Avenue, New York, NY 10010. It publishes e-books and print books throughpublishers such as Farrar, Straus and Giroux and St. Martin's Press. Verlagsgruppe Georg vonHoltzbrinck GmbH owns Holtzbrinck Publishers, LLC d/b/a Macmillan and has its principalplace ofbusiness at Gansheidestrafie 26, Stuttgart 70184, Germany.

16. Penguin Group (USA), Inc. has its principal place of business at 375 HudsonStreet, New York, NY 10014. It publishes e-books and print books through publishers such asThe Viking Press and Gotham Books. Penguin Group (USA), Inc. is the United States affiliateof The Penguin Group, a division of Pearson pic, which has its principal place of business at 80Strand, London WC2R 0RL, United Kingdom.

17. Simon& Schuster, Inc. has its principal place of business at 1230 Avenue of theAmericas, New York, NY 10020. It publishes e-books and print books through publishers sucha s F re e Press and Touchs tone.

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III. JURISDICTION, VENUE, AND INTERSTATE COMMERCE18. PlaintiffUnited States ofAmerica brings this action pursuant to Section 4 of the

Sherman Act, 15 U.S.C. 4, to obtain equitable reliefand other reliefto prevent and restrainDefendants' violations of Section 1 of the Sherman Act, 15 U.S.C 1.

19. This Court has subject matter jur isdict ion over this action under Section 4 of theSherman Act, 15 U.S.C. 4, and 28 U.S.C. 1331,1337(a), and 1345.

20. This Court has personal jurisdict ion over each Defendant and venue is proper inthe Southern District ofNew York under Section 12 of the Clayton Act, 15 U.S.C. 22, and 28U.S.C. 1391, because each Defendant transacts business and is found within the SouthernDistrict ofNew York. The U.S. component of each Publisher Defendant is headquartered in theSouthern District ofNew York, and acts in furtherance of the conspiracy occurred in thisDistrict. Many thousands of the Publisher Defendants' e-books are and have been sold in thisDistrict, including through Defendant Apple's iBookstore.

21. Defendants are engaged in, and their activit ies substantially affect, interstate tradeand commerce. The Publisher Defendants sell e-books throughout the United States. Their e-books represent a substantial amount of interstate commerce. In 2010, United States consumerspaid more than $300 million for the Publisher Defendants' e-books, including more than $40million for e-books licensed through DefendantApple's iBookstore.

IV. CO-CONSPIRATORS

22. Various persons, who are known and unknown to Plaintiff, and not named asdefendants in this action, including senior executives of the Publisher Defendants and Apple,have participated as co-conspirators with Defendants in the offense alleged and have performedacts and made statements in furtherance of the conspiracy.

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V. THE PUBLISHING INDUSTRY AND BACKGROUND OF THE CONSPIRACYA. Print Books

23. Authors submit books to publishers in manuscript form. Publishers editmanuscripts, print and bind books, provide advertising and related marketing services, decidewhen a book should be released for sale, and distribute books to wholesalers and retailers.Publishers also determine the cover price or "list price" of a book, and typically that priceappears on the book's cover.

24. Retailers purchase print books directly from publishers, or through wholesaledistributors, and resell them to consumers. Retailers typically purchase print books under the"wholesale model." Under that model, retailers pay publishers approximately one-halfof the listprice ofbooks, take ownership of the books, then resell them to consumers at prices of theretailer's choice. Publishers have sold print books to retailers through the wholesale model forover 100 years and continue to do so today.

B. E-books

25. E-books are books published in electronic formats. E-book publishers avoid someof the expenses incurred in producing and distributing print books, including most manufacturingexpenses, warehousing expenses, distribution expenses, and costs of dealing with unsold stock.

26. Consumers purchase e-books through websites of e-book retailers or throughapplications loaded onto their reading devices. Such electronic distribution allows e-bookretailers to avoid certain expenses they incur when they sell print books, including mostwarehousing expenses and distribution expenses.

27. From its very small base in 2007 at the t ime of Amazon's Kindle launch, the e-book market has exploded, registering triple-digit sales growth each year. E-books now

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constituteat least ten percent of general interest fiction and non-fiction books (commonly knownas "trade" books1) sold intheUnited States and are widely predicted to reach at least 25 percentofU.S. trade books sales within two to three years.

D. PublisherDefendants and "The $9.99 Problem "28. The Publisher Defendants compete against each other for sales of trade e-books to

consumers. Publishers bid against one another for print- and electronic-publishing rights tocontent that they expect will be most successful in the market. They also compete against eachother in bringing those books to market. For example, in addition to price-setting, they createcover art and other on-book sales inducements, and also engage in advertising campaigns forsome titles.

29. The Publisher Defendants are five of the six largest publishers of trade books inthe United States. They publish the vast majority of their newly released titles as both printbooks and e-books. Publisher Defendants compete against each other in the sales of both tradeprint books and trade e-books.

30. When Amazon launched its Kindle device, it offered newly released andbestsellinge-books to consumers for $9.99. At that time, Publisher Defendants routinelywholesaled those e-books for about that same price, which typically was less than the wholesalepriceof the hardcover versionsof the sametitles, reflecting publishercost savingsassociatedwith the electronic format. From the time of its launch, Amazon's e-book distribution businesshas been consistently profitable, even when substantially discounting some newly released andbestselling titles.1Non-trade e-books includeelectronic versions of children's picturebooksand academictextbooks, reference materials, and other specialized texts that typically are published by separateimprints from tradebooks,oftenare sold through separate channels, andare not reasonablysubstitutable for trade e-books.

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31. To compete with Amazon, other e-book retailers often matched or approachedAmazon's $9.99-or-less prices for e-book versions of new releases and New York Timesbestsellers. As a result of that competition, consumers benefited fromAmazon's $9.99-or-less e-book prices even if they purchased e-books from competing e-book retailers.

32. The Publisher Defendants feared that $9.99 would become the standard price fornewly released and bestselling e-books. For example, one Publisher Defendant's CEObemoaned the "wretched $9.99 price point" and Penguin USA CEO David Shanks worried thate-book pricing "can't be $9.99 for hardcovers."

33. The Publisher Defendants believed the low prices for newly released andbestselling e-booksweredisruptingthe industry. The Amazon-led$9.99 retail price point for themost populare-books troubled the PublisherDefendants because, at $9.99,most of these e-booktitleswere priced substantially lower than hardcover versions of the same title. The PublisherDefendants were concerned these lower e-book prices would lead to the "deflation" of hardcoverbook prices, with accompanying declining revenues for publishers. The Publisher Defendantsalso worried that if $9.99 solidified as the consumers' expected retail price for e-books, Amazonand other retailers would demand that publishers lower their wholesale prices, furthercompressing publisher profit margins.

34. The Publisher Defendants also feared that the $9.99 price point would make e-books so popular that digital publishers could achieve sufficient scale to challenge the majorincumbent publishers' basic business model. The Publisher Defendants were especiallyconcerned that Amazon was well positioned to enter the digital publishing business and therebysupplant publishers as intermediaries between authors and consumers. Amazon had, in fact,taken steps to do so, contracting directly with authors to publish their works as e-booksat a

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higher royalty rate than the Publisher Defendants offered. Amazon's move threatened thePublisher Defendants' traditional positions as the gate-keepers of the publishing world. ThePublisher Defendants also feared that other competitive advantages they held as a result of yearsof investments in their print book businesses would erode and, eventually, become irrelevant, ase-book sales continued to grow.

E. PublisherDefendantsRecognize They CannotSolve "The $9.99 Problem"Alone35. Each Publisher Defendant knew that, acting alone, it could not compel Amazon to

raise e-book prices and that it was not in its economic self-interest to attempt unilaterally to raiseretail e-book prices. Each Publisher Defendant relied on Amazon to market and distribute its e-books, and each Publisher Defendant believed Amazon would leverage its position as a largeretailer to preserve its ability to compete and would resist any individual publisher's attempt toraise the prices at which Amazon sold that publisher's e-books. As one Publisher Defendantexecutive acknowledged Amazon's bargaining strength, "we've always known that unless otherpublishers follow us, there's no chance of success in getting Amazon to change its pricingpractices." In the same email , the executive wrote, "without a critical mass behind us Amazonwon't 'negotiate,' so we need to be more confident of how our fellow publishers will react...."

36. Each Publisher Defendant also recognized that it would lose sales if retail pricesincreased for only its e-books while the other Publisher Defendants' e-books remainedcompetitively priced. In addition, higher prices for just one publisher's e-books would notchange consumer perceptions enough to slow the erosion of consumer-perceived valueof booksthat all the Publisher Defendants feared would result from Amazon's $9.99 pricing policy.

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VI. DEFENDANTS' UNLAWFUL ACTIVITIES37. Beginning no later than September 2008, the Publisher Defendants' senior

executivesengaged in a series ofmeetings, telephone conversations and other communicationsin which theyjointly acknowledged to each other the threat posed by Amazon's pricing strategyand the need to work collectively to end that strategy. By the end of the summer of2009, thePublisher Defendants had agreed to act collectively to force up Amazon's retail prices andthereafter considered and implemented various means to accomplish that goal, including movingunder the guise of a joint venture. Ultimately, in late 2009, Apple and the Publisher Defendantssettled on the strategy that workedreplacing the wholesale model with an agency model thatgave the Publisher Defendants the power to raise retail e-book prices themselves.

38. The evidence showing conspiracy is substantial and includes: Practices facilitating a horizontal conspiracy. The Publisher Defendants regularlycommunicated with each other in private conversations, both in person and on thetelephone, and in e-mails to each other to exchange sensitive information andassurances of solidarity to advance the ends of the conspiracy. Direct evidence of a conspiracy. The Publisher Defendants directly discussed,agreed to, and encouraged each other to collective action to force Amazon to raiseits retail e-book prices. Recognition of illicit nature of communications. Publisher Defendants took stepsto conceal their communications with one another, including instructions to"double delete" e-mail and taking other measures to avoid leaving a paper trail. Acts contrary to economic interests. It would have been contrary to the economicinterests of any Publisher Defendant acting alone to attempt to impose agency onall of its retailers and then raise its retail e-book prices. For example, PenguinGroup CEO John Makinson reported to his parent company board ofdirectors that"the industry needs to develop a common strategy" to address the threat "fromdigital companies whose objective may be to disintermediate traditionalpublishers altogether" because it "will not be possible for any individual publisherto mount an effective response," and Penguin later admitted that it would havebeen economically disadvantaged if it "was the only publisher dealing with Apple

under the new business model ."

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Motive to enter the conspiracy, including knowledge or assurances thatcompetitors also will enter. The Publisher Defendants were motivated by a desireto maintain both the perceived value of their books and their own position in theindustry. They received assurances from both each other and Apple that they allwould move together to raise retail e-book prices. Apple was motivated to ensurethat it would not face competition from Amazon's low-price retail strategy. Abrupt, contemporaneous shift from past behavior. Prior to January 23, 2010, allPublisher Defendants sold their e-books under the traditional wholesale model; byJanuary 25, 2010, all Publisher Defendants had irrevocably committed totransition all of their retailers to the agency model (and Apple had committed tosell e-books on a model inconsistent with the way it sells the vast bulk of thedigital media it offers in its iTunes store). On April 3, 2010, as soon as the AppleAgency Agreements simultaneously became effective, all Publisher Defendantsimmediately used their new retail pricing authority to raise the retail prices oftheir newly released and bestselling e-books to the common ostensible maximumprices contained in their Apple Agency Agreements.

A. ThePublisher Defendants Recognize a CommonThreat39. Starting no later than September of 2008 and continuing for at least one year, the

Publisher Defendants' CEOs (at times joined by one non-defendant publisher's CEO) metprivately as a group approximately once per quarter. These meetings took place in private diningrooms of upscale Manhattan restaurants and were used to discuss confidential business andcompetitive matters, including Amazon's e-book retailing practices. No legal counsel waspresent at any of these meetings.

40. In September 2008, Penguin Group CEO John Makinson was joined byMacmillan CEO John Sargent and the CEOs of the other four large publishers at a dinnermeeting in "The Chefs Wine Cellar," a private room at Picholene. One of the CEOs reportedt hat busines s ma t te r s were discussed.

41. In January 2009, the CEO of one Publisher Defendant, a United States subsidiaryof a European corporation, promised his corporate superior, the CEO of the parent company, thathe would raise the future ofe-books and Amazon's potential role in that future at an upcoming

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meetingof publisher CEOs. Later that month, at a dinner meeting hosted by Penguin GroupCEO John Makinson, again in "The Chefs Wine Cellar" at Picholene, the same group ofpublisher CEOs met once more.

42. On or about June 16, 2009, Mr. Makinson again met privately with otherPublisher Defendant CEOs and discussed, inter alia, the growth of e-books and Amazon's role inthat growth.

43. On or about September 10, 2009, Mr. Makinson once again met privately withother Publisher Defendant CEOs and the CEO of one non-defendant publisher in a private roomof a different Manhattan restaurant, Alto. They discussed the growth of e-books and complainedabout Amazon's role in that growth.

44. In addition to the CEO dinner meetings, Publisher Defendants' CEOs and otherexecutives met in-person, one-on-one to communicate about e-books multiple times over thecourse of2009 and into 2010. Similar meetings took place in Europe, including meetings in thefall of2009 between executives ofMacmillan parent company Verlagsgruppe Georg vonHoltzbrinck GmbH and executives of another Publisher Defendant's parent company.Macmillan CEO John Sargent joined at least one of these parent company meetings.

45. These private meetings provided the Publisher Defendants' CEOs the opportunityto discuss how they collectively could solve "the $9.99 problem."

B. Publisher DefendantsConspireToRaise Retail E-bookPrices Under theGuiseofJoint Venture Discuss ions

46. While each Publisher Defendant recognized that it could not solve "the $9.99problem" by itself, collectively the Publisher Defendants accounted for nearly half ofAmazon'se-book revenues, and by refusing to compete with one another for Amazon's business, the

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Publisher Defendants could force Amazon to accept the Publisher Defendants' new contractterms and to change its pricing practices.

47. The Publisher Defendants thus conspired to act collectively, initially in the guiseof joint ventures. These ostensible joint ventures were not meant to enhance competition bybringing to market products or services that the publishers could not offer unilaterally, but ratherwere designed as anticompetitive measures to raise prices.

48. All five Publisher Defendants agreed in 2009 at the latest to act collectively toraise retail prices for the most popular e-books above $9.99. One CEO of a PublisherDefendant's parent company explained to his corporate superior in a July 29, 2009 e-mailmessage that "[i]n the USA and the UK, but also in Spain and France to a lesser degree, the 'toppublishers' are in discussions to create an alternative platform to Amazon for e-books. The goalis less to compete with Amazon as to force it to accept a price level higher than 9.99 . . . . I am inNY this week to promote these ideas and the movement is positive with [the other four PublisherDefendants]." (Translated from French).

49. Less than a week later, in an August 4, 2009 strategy memo for the board ofdirectors of Penguin's ultimate parent company, Penguin Group CEO John Makinson conveyedthe same message:

Competition for the attention of readers will be most intense fromdigital companies whose objective may be to disintermediatetraditional publishers altogether. This is not a new threat but wedo appear to be on a collision course with Amazon, and possiblyGoogle as well. It will not be possible for any individual publisherto mount an effective response, because of both the resourcesnecessary and the risk of retribution, so the industry needs todevelop a common strategy. This is the context for thedevelopment of the Project Z initiatives [joint ventures] in Londonand New York.

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C. Defendants Agree ToIncrease andStabilize RetailE-bookPrices byCollectivelyAdoptingan AgencyModel50. To raise e-book prices, the Publisher Defendants also began to consider in late

2009 selling e-books under an "agency model" that would take away Amazon's ability to set lowretail prices. As one CEOofa Publisher Defendant's parent company explained in a December6,2009 e-mail message, "[o]ur goal is to force Amazon to return to acceptable sales pricesthrough the establishment of agency contracts in the USA . . . . To succeed our colleagues mustknow that we entered the fray and follow us." (Translated from French).

51. Apple's entry into the e-book business provided a perfect opportunity forcollective action to implement the agency model and use it to raise retail e-book prices. Applewas in the process of developing a strategy to sell e-books on its new iPad device. Appleinitially contemplated selling e-books through the existing wholesale model, which was similarto the manner in which Apple sold the vast majority of the digital media it offered in its iTunesstore. On February 19, 2009, Apple Vice President of Internet Services Eddy Cue explained toApple CEO Steve Jobs in an e-mail, "[a]t this point, it would be very easy for us to compete andI think trounce Amazon by opening up our own ebook store." In addition to consideringcompetitive entry at that time, though, Apple also contemplated illegally dividing the digitalcontent world with Amazon, allowing each to "own the category" of its choiceaudio/video toApple and e-books to Amazon.

52. Apple soon concluded, though, that competition from other retailers - especiallyAmazon - would prevent Apple from earning its desired 30 percent margins on e-book sales.Ultimately, Apple, together with the Publisher Defendants, set in motion a plan that wouldcompel all non-Apple e-book retailers also to sign onto agency or else, as Apple's CEO put it,the Publisher Defendants all would say, "we're not going to give you the books."

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53. The executive in charge ofApple's inchoate e-books business, Eddy Cue,telephonedeach Publisher Defendant and RandomHouse on or around December 8,2009 toscheduleexploratorymeetings inNew YorkCity on December 15and December 16. Hachetteand HarperCollins took the lead inworkingwithApple to capitalize on this goldenopportunityfor the Publisher Defendants to achieve their goal of raising and stabilizing retail e-book pricesabove $9.99 by collectively imposing the agency model on the industry.

54. It appears that Hachette and HarperCollins communicated with each other aboutmovingto an agencymodel during the briefwindow between Mr. Cue's first telephone calls tothe Publisher Defendants and his visit to meet with their CEOs. On the morning ofDecember10, 2009, a HarperCollins executive added to his calendar an appointment to call a Hachetteexecutive at 10:50 AM. At 11:01 AM, the Hachette executive returned the phone call, and thetwo spoke for six minutes. Then, less than a week later in New York, both Hachette andHarperCollins executives told Mr. Cue in their initial meetings with him that theywanted to selle-books under an agency model, a dramatic departure from the way books had been sold for overa century.

55. The other Publisher Defendants also made clear to Apple that they "certainly" didnot want to continue "the existing way that they were doing business," i.e., with Amazonpromoting their most popular e-books for $9.99 under a wholesale model.

56. Apple saw a way to turn the agency scheme into a highly profitable model foritself. Apple determined to give the Publisher Defendants what they wanted while shieldingitself from retail price competition and realizing margins far in excess ofwhat e-book retailersthen averaged on each newly released or bestselling e-book sold. Apple realized that, as a resultof the scheme, "the customer" would "pay[] a li ttle more."

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57. On December 16, 2009, the day after both companies' initial meetings withApple, Penguin Group CEO John Makinson had a breakfast meeting at a London hotel with theCEO of another Publisher Defendant's parent company. Consistent with the PublisherDefendants' other efforts to conceal their activities, Mr. Makinson's breakfast companion wroteto his U.S. subordinate that he would recount portions of his discussion with Mr. Makinson onlyby telephone.

58. By the time Apple arrived for a second round ofmeetings during the week ofDecember 21, 2009, the agency model had become the focus of its discussions with all of thePublisher Defendants. In these discussions, Apple proposed that the Publisher Defendantsrequire all retailers of their e-books to accept the agency model. Apple thereby sought to ensurethat it would not have to compete on retail prices. The proposal appealed to the PublisherDefendants because wresting pricing control from Amazon and other e-book retailers wouldadvance their collusive plan to raise retail e-book prices.

59. The Publisher Defendants acknowledged to Apple their common objective to endAmazon's $9.99 pricing. As Mr. Cue reported in an e-mail message to Apple's CEO Steve Jobs,the three publishers with whom he had met saw the "plus" ofApple's position as "solv[ing the]Amazon problem." The "negative" was thatApple's proposed retail prices - topping out at$12.99 for newly released and bestselling e-books - were a "little less than [the publishers]would like." Likewise, Mr. Jobs later informed an executive of one of the Publisher Defendant'scorporate parents that "[a]ll major publishers" had told Apple that "Amazon's $9.99 price fornew releases is eroding the value perception of their products in customer's minds, and they donot want this practice to continue for new releases."

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60. Asperhaps the only company that couldfacilitate theirgoalof raising retail e-book prices across the industry, Apple knew that it hadsignificant leverage in negotiations withPublisher Defendants. Appleexercised this leverage to demanda thirty percentcommissionamargin significantly above the prevailing competitive margins for e-book retailers. ThePublisher Defendants worried that the combination of paying Apple a higher commission thantheywouldhavelikedand pricingtheir e-books lower than theywantedmight be too muchtobear in exchange for Apple's facilitation of their agreement to raise retail e-book prices.Ultimately, though, they convinced Apple to allow themto raisepriceshighenoughto makethedeal palatable to them.

61. As it negotiatedwith the PublisherDefendantsin December2009 and January2010,Apple kept each PublisherDefendant informed of the statusof its negotiations withtheotherPublisherDefendants. Apple also assured the PublisherDefendants that its proposalswerethe same to each and that no deal Apple agreed to with one publisher would bemateriallydifferent fromany deal it agreed to with another publisher. Apple thus knowingly served as acriticalconspiracyparticipant by allowingthe PublisherDefendants to signal to one another both(a)whichagency termswouldcomprise an acceptable meansof achieving their ultimategoal ofraisingand stabilizing retail e-bookprices,and(b) that they could lock themselves into thisparticular means of collectively achieving thatgoalby all signing theirAppleAgencyAgreement.

62. Apple's Mr.Cue e-mailed eachPublisherDefendantbetween January4,2010,and January6, 2010an outline ofwhat he tabbed"the best approachfor e-books." He reassuredPenguin USACEODavidShanksand otherPublisher Defendant CEOs that Appleadopted the

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approach "[a]fter talking to all the other publishers." Mr. Cue sent substantively identical e-mailmessages and proposals to each Publisher Defendant.

63. The outlined proposal that Apple circulated after consulting with each PublisherDefendant contained several key features. First, as Hachette and HarperCollins had initiallysuggested to Apple, the publisher would be the principal and Apple would be the agent for e-book sales. Consumer pricing authority would be transferred from retailers to publishers.Second, Apple's proposal mandated that every other retailer of each publisher's e-books -Apple's direct competitors - be forced to accept the agency model as well. As Mr. Cue wrote,"all resellersof new titles need to be in agencymodel." Third, Apple would receive a 30 percentcommission for each e-book sale. And fourth, each Publisher Defendant would have identicalpricing tiers for e-books sold through Apple's iBookstore.

64. On January 11, 2010, Apple e-mailed its proposed e-book distribution agreementto all the Publisher Defendants. As with the outlined proposals Apple sent earlier in January, theproposed e-book distribution agreements were substantially the same. Also on January 11, 2010,Apple separately e-mailed to Penguin and two other Publisher Defendants charts showing howthe Publisher Defendant's bestselling e-books would be priced at $12.99 - the ostensiblymaximum price under Apple's then-current price tier proposal - in the iBookstore.

65. The proposed e-book distribution agreement mainly incorporated the principlesApple set out in its e-mail messagesof January 4 through January 6, with two notable changes.First, Apple demanded that the PublisherDefendants provide Apple their complete e-bookcatalogs and that they not delay the electronic release of any title behind its print release.Second, and more important, Apple replaced the express requirement that each publisher adoptthe agency model with each of its retailers with an unusual most favored nation ("MFN") pricing

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provision. That provision was not structured like a standard MFN in favor of a retailer, ensuringApple that it would receive the best available wholesale price. Nor did the MFN ensure Applethat the Publisher Defendants would not set a higher retail price on the iBookstore than they seton other websites where they controlled retail prices. Instead, the MFN here required eachpublisher to guarantee that it would lower the retail price of each e-book in Apple's iBookstoreto match the lowest price offered by any other retailer, even if the Publisher Defendant did notcontrol that other retailer's ultimate consumer price. That is, instead of an MFN designed toprotect Apple's ability to compete, this MFN was designed to protect Apple from having tocompete on price at all, while still maintaining Apple's 30 percent margin.

66. The purpose of these provisions was to work in concert to enforce theDefendants' agreement to raise and stabilize retail e-book prices. Apple and the PublisherDefendants recognized that coupling Apple's right to all of their e-books with its right to demandthat those e-books not be priced higher on the iBookstore than on any other website effectivelyrequired that each Publisher Defendant take away retail pricing control from all other e-bookretailers, including stripping them of any ability to discount or otherwise price promote e-booksout of the retailer's own margins. Otherwise, the retail price MFN would cause Apple'siBookstore prices to drop to match the best available retail price of each e-book, and thePublisher Defendants would receive only 70 percent of those reduced retail prices. Pricecompetition by other retailers, if allowed to continue, thus likely would reduce e-book revenuesto levels the Publisher Defendants could not control or predict.

67. In negotiating the retail price MFN with Apple, "some of [the PublisherDefendants]" asserted that Apple did not need the provision "because they would be moving to

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an agency model with [the other e-book retailers,]" regardless. Ultimately, though, allDefendants agreed to include the MFN commitment mechanism.

68. On January 16, 2010, Apple, via Mr. Cue, offered revised terms to the PublisherDefendants that again were identical in substance. Apple modified its earlier proposal in twosignificant ways. First, in response to publisher requests, it added new maximum pricing tiersthat increased permissible e-book prices to $16.99 or $19.99, depending on the book's hardcoverlist price. Second, Apple's new proposal mitigated these price increases somewhat by addingspecial pricing tiers for e-book versions of books on the New York Timesfiction and non-fictionbestseller lists. For e-book versions of bestsellers bearing list prices of $30 or less, PublisherDefendants could set a price up to $12.99; for bestsellers bearing list prices between $30 and$35, the e-book price cap would be $14.99. In conjunction with the revised proposal, Mr. Cueset up meetings for the next week to finalize agreements with the Publisher Defendants.

69. Each Publisher Defendant required assurances that it would not be the onlypublisher to sign an agreement with Apple that would compel it either to take pricing authorityfrom Amazon or to pull its e-books from Amazon. The Publisher Defendants continued to fearthat Amazon would act to protect its ability to price e-books at $9.99 or less if any one of themacted alone. Individual Publisher Defendants also feared punishment in the marketplace if onlyits e-books suddenly became more expensive at retail while other publishers continued to allowretailers to compete on price. As Mr. Cue noted, "all of them were very concerned about beingthe only ones to sign a deal with us." Penguin explicitly communicated to Apple that it wouldsign an e-book distribution agreement with Apple only if at least three of the other "majorf]"publishers did as well. Apple supplied the needed assurances.

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70. While the Publisher Defendants were discussing e-book distribution terms withApple during the week of January 18, 2010, Amazon met in New York City with a number ofprominent authors and agents to unveil a new program under which copyright holders could taketheir e-books directly to Amazon - cutting out the publisher - and Amazon would pay royaltiesof up to 70 percent, far in excess ofwhat publishers offered. This announcement furtherhighlighted the direct competitive threat Amazon posed to the Publisher Defendants' businessmodel. The Publisher Defendants reacted immediately. For example, Penguin USA CEO DavidShanks reported being "really angry" after "hav[ing] read [Amazon's] announcement." Afterthinking about it for a day, Mr. Shanks concluded, "[o]n Apple I am nowmore convinced thatwe need a viable alternative to Amazon or this nonsense will continue and get much worse."Another decisionmaker stated he was "p****d" at Amazon for starting to compete directlyagainst the publishers and expressed his desire "to screw Amazon."

71. To persuade one of the Publisher Defendants to stay with the others and sign anagreement, Apple CEO Steve Jobs wrote to an executive of the Publisher Defendant's corporateparent that the publisher had only two choices apart from signing the Apple Agency Agreement:(i) accept the status quo ("Keep going with Amazon at $9.99"); or (ii) continue with a losingpolicy of delaying the release of electronic versions ofnew titles ("Hold back your books fromAmazon"). According to Jobs, the Apple deal offered the Publisher Defendants a superioralternative path to the higher retail e-book prices they sought: "Throw in with Apple and see ifwe can all make a go of this to create a real mainstream e-books market at $12.99 and $14.99."

72. In addition to passing information through Apple and during their private dinnersand other in-person meetings, the Publisher Defendants frequently communicated by telephoneto exchange assurances of common action in attempting to raise the retail price of e-books.

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These telephone communications increased significantly during the two-month period in whichthe Publisher Defendants considered and entered the Apple Agency Agreements. DuringDecember 2009 and January 2010, the Publisher Defendants' U.S. CEOs placed at least 56phone calls to one another. Each CEO, including Penguin's Shanks and Macmillan's Sargent,placedat least seven such phone calls.

73. The timing, frequency, duration, and content of the Publisher Defendant CEOs'phone calls demonstrate that the Publisher Defendants used them to seek and exchangeassurances of common strategies and business plans regarding theApple Agency Agreements.For example, in addition to the telephone calls already described in this complaint:

Near the time Apple first presented the agency model, one Publisher Defendant'sCEO used a telephone call - ostensibly made to discuss a marketing joint venture- to tell Penguin USA CEO David Shanks that "everyone is in the same placewith Apple." After receiving Apple's January 16, 2010 revised proposal, executives of severalPublisher Defendants responded to the revised proposal and meetings by, again,

seeking and exchanging confidential information. For example, on Sunday,January 17, one Publisher Defendant's CEO used his mobile phone to call anotherPublisher Defendant's CEO and talk for approximately ten minutes. And on themorning of January 19, Penguin USA CEO David Shanks had an extendedtelephone conversation with the CEO of another Publisher Defendant.

On January 21,2010, the CEO of one Publisher Defendant's parent companyinstructed his U.S. subordinate via e-mail to find out Apple's progress in agencynegotiations with other publishers. Four minutes after that e-mail was sent, theU.S. executive called another Publisher Defendant's CEO, and the two spoke forover eleven minutes.

On January 22, 2010, at 9:30 a.m., Apple's Cue met with one PublisherDefendant's CEO to make what Cue hoped would be a "final go/no-go decision"about whether the Publisher Defendant would sign an agreement with Apple.Less than an hour later, the Publisher Defendant's CEO made phone calls, twominutes apart, to two other Publisher Defendants' CEOs, including Macmillan'sSargent. The CEO who placed the calls admitted under oath to placing themspecifically to learn if the other two Publisher Defendants would sign with Appleprior to Apple's iPad launch.

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On the evening of Saturday, January 23, 2010, Apple's Cue e-mailed his boss,Steve Jobs, and noted that Penguin USA CEO David Shanks "want[ed] anassurance that he is 1 of4 before signing." The following Monday morning, at9:46 a.m., Mr. Shanks called another Publisher Defendant's CEO and the twotalked for approximately four minutes. Both Penguin and the other PublisherDefendant signed their Apple Agency Agreements later that day.74. On January 24,2010, Hachette signed an e-book distribution agreement with

Apple. Overthe next two days, Simon& Schuster,Macmillan,Penguin, and HarperCollinsallfollowed suit and signed e-book distribution agreements with Apple. Within these three days,the Publisher Defendants agreed with Apple to abandon the longstanding wholesale model forselling e-books. The Apple AgencyAgreements took effect simultaneously on April 3, 2010with the release ofApple's new iPad.

75. The final version of the pricing tiers in the Apple Agency Agreements containedthe $12.99 and $14.99 price points for bestsellers, discussed earlier, and also established pricesfor all other newly released titles based on the hardcover list price of the same title. Althoughcouched as maximum retail prices, the price tiers in fact established the retail e-book prices to becharged by Publisher Defendants.

76. By entering the Apple AgencyAgreements, each Publisher Defendant effectivelyagreed to require allof their e-bookretailers to acceptthe agencymodel. BothApple and thePublisher Defendants understood the Agreements would compel the Publisher Defendants totake pricingauthorityfromall non-Apple e-bookretailers. A February 10,2010 presentation byone PublisherDefendant applauded this result (emphasis in original): "The Apple agencymodeldeal means that we will have to shift to an agency model with Amazon which [will]strengthen our control over pricing."

77. Appleunderstoodthat the final AppleAgencyAgreementsensured that thePublisher Defendants would raise their retail e-book prices to the ostensible limits set by the

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Apple pricetiers not only inApple's forthcoming iBookstore, buton Amazon.com andall otherconsumer sites as well. When asked by a Wall StreetJournal reporter at the January 27, 2010iPadunveiling event, "Why shouldshe buy a book for . . . $14.99 fromyour devicewhen shecould buyone for $9.99 fromAmazonon the Kindleor fromBarnes&Noble on the Nook?"AppleCEOSteve Jobs responded, "that won't be the case . . . . the priceswill be the same."

78. Appleunderstood that the retailpriceMFNwas the key commitment mechanismto keepthePublisherDefendants advancing their conspiracy in lockstep. Regardingthe effectoftheMFN, Appleexecutive PeteAlcornremarked in the contextof theEuropeanroll-outof theagency model in the spring of 2010:

I told [Apple executive Keith Moerer] that I think he and Eddy[Cue] made it at least halfway to changing the industrypermanently, and we should keep the pads on and keep fighting forit. I might regret that later, but right now I feel like it's a giant winto keep pushing the MFN and forcing people off the [A]mazonmodel and onto ours. If anything, the place to give is the pricing -long run, the mfh is more important. The interesting insight in themeeting was Eddy's explanation that it doesn't have to be thatbroad any decent MFN forces the model.79. Within the four months following the signing of the Apple Agency Agreements,

andover Amazon's objections,each PublisherDefendanthad transformed its businessrelationship with all of themajore-bookretailersfroma wholesale model to an agencymodeland imposed flat prohibitions against e-bookdiscounting or otherprice competitionon all non-Apple e-book retailers.

80. For example,after it signed its AppleAgencyAgreement,Macmillan presentedAmazon a choice: adopt the agency model or lose the ability to sell e-bookversionsof newhardcover titles for the first seven months of their release. Amazon rejected Macmillan'sultimatumand sought to preserveits ability to sell e-book versionsofnewly released hardcovertitles for $9.99. To resist Macmillan's efforts to force it to accept either the agency model or

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delayed electronic availability, Amazon effectively stopped selling Macmillan's print books ande-books.

81. When Amazon stopped selling Macmillan titles, other Publisher Defendants didnot viewthe situationas an opportunity to gainmarket share froma weakenedcompetitor.Instead, they rallied to support Macmillan. For example, the CEO of one Publisher Defendant'sparent company instructed the Publisher Defendant's CEO that "[Macmillan CEO] John Sargentneeds our help!" The parent company CEO explained, "M[acm]illan have been brave, but theyare small. We need to move the lines. And I am thrilled to know how A[mazon] will reactagainst 3 or 4 of the big guys."

82. The CEO ofone Publisher Defendant's parent company assured Macmillan CEOJohn Sargent of his company's support in a January 31, 2010 email: "I can ensure you that youare not going to find your company alone in the battle." The same parent company CEO alsoassured the head ofMacmillan's corporate parent in a February 1 email that "others will enter thebattle field!" Overall, Macmillan received "hugely supportive" correspondence from thepublishing industry during Macmillan's effort to force Amazon to accept the agency model.

83. As its battle with Amazon continued, Macmillan knew that, because the otherPublisher Defendants, via the Apple Agency Agreements, had locked themselves into forcingagency on Amazon to advance their conspiratorial goals, Amazon soonwould face similar edictsfrom a united front o f Publisher Defendants. And Amazon could not delist the books of all fivePublisher Defendants because they together accounted for nearly halfofAmazon's e-bookbusiness. Macmillan CEO John Sargent explained the company's reasoning: "we believedwhatever was happening, whatever Amazon was doing here, they were going to face - they'regoing to have more of the same in the future one way or another." Another Publisher Defendant

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similarly recognized that Macmillan was not acting unilaterally but rather was "leading thecharge on moving Amazon to the agency model."

84. Amazon quickly came to fully appreciate that not justMacmillan but all fivePublisher Defendants had irrevocably committed themselves to the agency model across allretailers, including taking control of retail pricing and thereby stripping away any opportunity fore-book retailers to compete on price. Just two days after it stopped selling Macmillan titles,Amazon capitulated and publicly announced that it had no choice but to accept the agencymodel, and it soon resumed selling Macmillan's e-book and print book titles.

D. Defendants FurthertheConspiracy byPressuringAnotherPublisher ToAdopttheAgencyModel85. When a company takes a pro-competi tive action by introducing a new product,

lowering its prices, or even adopting a new business model that helps it sell more product atbetter prices, it typically does not want its competitors to copy its action, but prefers to maintaina first-mover or competitive advantage. In contrast, when companies jointly take collusiveaction, such as instituting a coordinated price increase, they typically want the rest of theircompetitors to join them in that action. Because collusive actions are not pro-competitive orconsumer friendly, any competitor that does not go along with the conspirators can take moreconsumer friendly actions and see its market share rise at the expense of the conspirators. Here,the Defendants acted consistently with a collusive arrangement, and inconsistently with a pro-competitive arrangement, as they sought to pressure another publisher (whose market share wasgrowing at the Publisher Defendants' expense after the Apple Agency Contracts becameeffective) to join them.

86. Penguin appears to have taken the lead in these efforts. Its U.S. CEO, DavidShanks, twice directly told the executives of the holdout major publisher about his displeasure

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with their decision to continue selling e-books on the wholesale model. Mr. Shanks tried tojustify the actions of the conspiracy as an effort to save brick-and-mortar bookstores andcriticized the other publisher for "not helping" the group. The executives of the other publisherresponded to Mr. Shanks's complaints by explaining their objections to the agency model.

87. Mr. Shanks also encouraged a large print book and e-book retailer to punish theother publisher for not joining Defendants' conspiracy. In March 2010, Mr. Shanks sent an e-mail message to an executive of the retailer complaining that the publisher "has chosen to stay ontheir current model and will allow retailers to sell at whatever price they wish." Mr. Shanksargued that "[s]ince Penguin is looking out for [your] welfare at what appears to be great costs tous, I would hope that [you] would be equally brutal to Publishers who have thrown in with yourcompetition with obvious disdain for your welfare.... I hope you make [the publisher] hurt likeAmazon is doing to [the Publisher Defendants]."

88. When the third-party retailer continued to promote the non-defendant publisher 'sbooks, Mr. Shanks applied more pressure. In a June 22, 2010 email to the retailer's CEO,Mr. Shanks claimed to be "baffled" as to why the retailer would promote that publisher's booksinstead ofjust those published by "people who stood up for you."

89. Throughout the summer of 2010, Apple also cajoled the holdout publisher toadopt agency terms in line with those of the Publisher Defendants, including on a phone callbetween Apple CEO Steve Jobs and the holdout publisher's CEO. Apple flatly refused to sellthe holdout publisher's e-books unless and until it agreed to an agency relationship substantiallysimilar to the arrangement between Apple and the Publisher Defendants defined by the AppleAgency Agreements.

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E. ConspiracySucceeds at Raising andStabilizing ConsumerE-bookPrices90. The ostensible maximum prices included in the Apple Agency Agreements' price

schedule represent, in practice, actual e-book prices. Indeed, at the time the PublisherDefendants snatched retail pricing authority away from Amazon and other e-book retailers, notone of them had built an internal retail pricing apparatus sufficient to do anything other than setretail prices at the Apple Agency Agreements' ostensible caps. Once their agency agreementstook effect, the Publisher Defendants raised e-book prices at all retail outlets to the maximumprice level within each tier. Even today, two years after the Publisher Defendants began settinge-book retail prices according to the Apple price tiers, they still set the retail prices for theelectronic versions of all or nearly all of their bestselling hardcover titles at the ostensiblemaximum price allowed by those price tiers.

91. The Publisher Defendants' collective adoption of the Apple Agency Agreementsallowed them (facilitated by Apple) to raise, fix, and stabilize retail e-book prices in three steps:(a) they took away retail pricing authority from retailers; (b) they then set retail e-book pricesaccording to the Apple price tiers; and (c) they then exported the agency model and higher retailprices to the rest of the industry, in part to comply with the retail price MFN included in eachApple Agency Agreement.

92. Defendants' conspiracy and agreement to raise and stabilize retail e-book pricesby collectively adopting the agency model and Apple price tiers led to an increase in the retailprices of newly released and bestselling e-books. Prior to the Defendants' conspiracy,consumers benefited from price competition that led to $9.99 prices for newly released andbestselling e-books. Almost immediately after Apple launched its iBookstore in April 2010 andthe Publisher Defendants imposed agency model pricing on all retailers, the Publisher

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Defendants' e-book prices for most newly released and bestselling e-books rose to either $12.99or $14.99.

93. Defendants' conspiracy and agreement to raise and stabilize retail e-book pricesby collectively adopting the agency model and Apple price tiers for their newly released andbestselling e-books also led to an increase in average retail prices of the balance ofPublisherDefendants' e-book catalogs, their so-called "backlists." Now that the Publisher Defendantscontrol the retail prices of e-books - but Amazonmaintains control of its print book retail prices- PublisherDefendants' e-book prices sometimes are higher than Amazon's prices for printversions o f the same titles.

VII. VIOLATION ALLEGED

94. Beginning no later than 2009, and continuing to date, Defendants and their coconspirators have engaged in a conspiracy and agreement in unreasonable restraint of interstatetrade and commerce, constituting a violation of Section 1 of the Sherman Act, 15 U.S.C. 1.This offense is likely to continue and recur unless the relief requested is granted.

95. The conspiracy and agreement consists of an understanding and concert of actionamong Defendants and their co-conspirators to raise, fix, and stabilize retail e-book prices, to endprice competition among e-book retailers, and to limit retail price competition among thePublisher Defendants, ultimately effectuated by collectively adopting and adhering tofunctionally identical methods of selling e-books and price schedules.

96. For the purpose of forming and effectuating this agreement and conspiracy, someor all Defendants did the following things, among others:

a. Shared their business information, plans, and strategies in order toformulate ways to raise retail e-book prices;

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b. Assured each other of support in attempting to raise retail e-book prices;c. Employed ostensible joint venture meetings to disguise their attempts to

raise retail e-book prices;d. Fixed the method of and formulas for setting retail e-book prices;e. Fixed tiers for retail e-book prices;f. Eliminated the ability of e-book retailers to fund retail e-book price

decreases out of their own margins; andg. Raised the retail prices of their newly released and bestselling e-books to

the agreed prices - the ostensible price caps - contained in the pricing schedule of theirApple Agency Agreements.97. Defendants' conspiracy and agreement, in which the Publisher Defendants and

Apple agreed to raise, fix, and stabilize retail e-book prices, to end price competition among e-book retailers, and to limit retail price competition among the Publisher Defendants by fixingretail e-book prices, constitutes aper se violation ofSection 1 of the Sherman Act, 15 U.S.C. 1.

98. Moreover, Defendants' conspiracy and agreement has resulted in obvious anddemonstrable anticompetitive effects on consumers in the trade e-books market by deprivingconsumers of the benefits of competition among e-book retailers as to both retail prices and retailinnovations (such as e-book clubs and subscription plans), such that it constitutes anunreasonable restraint on trade in violation of Section 1 of the Sherman Act, 15 U.S.C. 1.

99. Where, as here, defendants.have engaged in a.per se violation of Section 1 of theSherman Act, no allegations with respect to the relevant product market, geographic market, ormarket power are required. To the extent such allegations may otherwise be necessary, therelevant product market for the purposes of this action is trade e-books. The anticompetitive acts

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at issue in this case directly affect the sale of trade e-books to consumers. No reasonablesubstitute exists for e-books. There are no technological alternatives to e-books, thousands ofwhich can be stored on a single small device. E-books can be stored and read on electronicdevices, while print books cannot. E-books can be located, purchased, and downloadedanywhere a customer has an internet connection, while print books cannot. Industry firms alsoview e-books as a separate market segment from print books, and the Publisher Defendants wereable to impose and sustain a significant retail price increase for their trade e-books.

100. The relevant geographic market is the United States. The rights to license e-books are granted on territorial bases, with the United States typically forming its own territory.E-book retailers typically present a unique storefront to U.S. consumers, often with e-booksbearing different retail prices than the same titles would command on the same retailer's foreignwebsites.

101. The Publisher Defendants possess market power in the market for trade e-books.The Publisher Defendants successfully imposed and sustained a significant retail price increasefor their trade e-books. Collectively, they create and distribute a wide variety of popular e-books, regularly comprising over half of the New York Times fiction and non-fiction bestsellerlists. Collectively, they provide a critical input to any firm selling trade e-books to consumers.Any retailer selling trade e-books to consumers would not be able to forgo profitably the sale ofthe Publisher Defendants ' e-books.

102. Defendants' agreement and conspiracy has had and will continue to haveanticompetitive effects, including:

a. Increasing the retail prices of trade e-books;b. Eliminating competit ion on price among e-book retailers;

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c. Restraining competition on retail price among the Publisher Defendants;d. Restraining competition among the Publisher Defendants for favorable

relationships with e-book retailers;e. Constraining innovation among e-book retailers;f. Entrenching incumbent publishers' favorable position in the sale and

distribution of print books by slowing the migration from print books to e-books;g. Makingmore likely express or tacit collusion among publishers;andh. Reducing competitive pressure on print book prices.

103. Defendants' agreement and conspiracy is not reasonably necessary to accomplishanyprocompetitive objective, or, alternatively, its scope is broader than necessaryto accomplishany such objective.

VIII. REQUEST FOR RELIEF104. To remedy these illegal acts, the United States requests that the Court:

a. Adjudge and decree that Defendants entered into an unlawful contract,combination, or conspiracy in unreasonable restraint of interstate trade and commerce inviolation of Section 1 of the Sherman Act, 15 U.S.C. 1;

b. Enjoin the Defendants, their officers, agents, servants, employees andattorneysand their successors and all other persons acting or claiming to act in activeconcert or participationwith one or moreof them, from continuing,maintaining, orrenewing in any manner, directly or indirectly, the conduct alleged herein or fromengaging in any other conduct, combination,conspiracy, agreement, understanding, plan,program,or other arrangement having the same effect as the alleged violationor thatotherwise violates Section 1 of the Sherman Act, 15 U.S.C. 1, through fixing the

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methodand manner in which they sell e-books,or otherwise agreeing to set the price orrelease date for e-books, or collective negotiation of e-book agreements, or otherwisecollectivelyrestraining retail price competition for e-books;

c. Prohibit the collusive setting of price tiers that can de facto fix prices;d. Declare null and void the Apple Agency Agreements and any agreement

between a Publisher Defendant and an e-book retailer that restricts, limits, or impedes thee-book retailer's ability to set, alter, or reduce the retail price of any e-book or to offerprice orotherpromotions to encourage consumers to purchase anye-book, or contains aretail price MFN;

e. Reform the agreements betweenApple and Publisher Defendants to strikethe retail price MFN clauses as void and unenforceable; and

f. Award to Plaintiff its costs of this action and such other and further reliefasmay be appropriate and as the Court may deemjust and proper.

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DATED: APRIL 11,2012FOR PLAINTIFFUNITED STATES OF AMERICA:

"SrlARIS^^jDZENActing

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44C/SDNY. 5 / 2010

1\

The JS-44 civil cover sheet and Ihe Information contained heroin neither replace nor supplement the ftting and service ofpleadings or other papers as required by law. except as provided by local rules of court. This form, approved by the^^!;zz:^rs,atas ,n sep,ember-*-*- - "*-- ->-- -. APR 11 2012States ofAmerica

DEFENDANTSApple, Inc., et al.See Attachment A, "Defendants"

(FIRM NAME; ADORESS. AND TELEPHONE NUMBER ATTORNEYS (IF KNOWN)McCuaig (Attorney ofRecord)Attachment B, "Plaintiffs Attorneys" SeeAttachment C,"Defendants* Attorneys"OF ACTION (cite the u.s. civil statute under which you are filing ano write abrief statement ofcause)(OO NOT CITE JURISDICTIONAL STATUTES UNLESS DIVERSITY)

15U.S.C. 1,Anticompetitive agreement in restraint oftradethis or asimilar case been previously filed in SONY at any time? No?D Yes? fj] Judge Previously Assigned Cotewas Itts case VolD Invol. D Dismissed. NoB Yes D If yes, give dateAN jx] IN ONE BOX ONL Y)

& Case No .NATURE OF SUIT

ACTIONS UNDER STATUTES

TORTS FORFEITURE/PENALTY BANKRUPTCY( 1422 APPEAL

28USC 15 8( |423 WITHDRAWAL

2 8U SC 15 7

OTHERSTATUTES

INSURANCEMARINENEGOTIABLEINSTRUMENTRECOVERYOFOVERPAYMENT*ENFORCEMENTOFJUOGMENT

RECOVERYOFDEFAULTEDSTUOENT LOANS(EXCLVETERANS)RECOVERYOFOVERPAYMENT OFVETERAN'S BENEFITSSTOCKHOLDERSSUITSOTHERCONTRACTCONTRACTPROOUCTLIABILITYFRANCHISE

PERSONAL INJURY PERSONAL INJURY (1610( 1620( |62S

AGRICULTUREOTHER FOOD &ORUGDRUGRELATEOSEIZURE OFPROPERTY21 USC 88 1LIQUOR LAWSRR STRUCKAIRLINE REGSOCCUPATIONALSAFETY/HEALTHOTHER

( I 400XI410( 14301)450( |460(|470

STATEREAPPORTIONMENTANT ITRUSTBANKS & BANKINGCOMMERCEOEPORTATIONRACKETEER INFLU-ENOEO&CORRUPTORGANIZATION AC T(RICO)CONSUMERCTDITCABLE/SATELLITE TVSELECTIVE SERVICESECURITIES/COMMODITIES/EXCHANGECUSTOMERCHALLENGE12 US C 3410OTHER STATUTORYACTIONSAGRICULTURAL ACTSECONOMICSTABILIZATION ACTENVIRONMENTALMATTERSENERGYALLOCATION ACTFREEDOM OFINFORMATION ACTAPPEALOF FEEDETERMINATIONUNDER EQUALACCESSTO JUSTICECONSTITUTIONALITYOF STATE STATUTES

(1310I I31S( |320(1330

(1340(1345( |3S0(1355( |360

AIRPLANEAIRPLANE PROOUCTLIABILITYASSAULT. LIBEL *SLANDERFEDERALEMPLOYERS'LIABILITYMARINEMARINE PRODUCTLIABILITYMOTOR VEHICLEMOTOR VEHICLEPROOUCT LIABILITYOTHER PERSONALINJURY

ACTIONSUNDER STATUTESCIVIL RIGHTS( |441 VOTING(1442 EMPLOYMENT( 1443 HOUSING/

ACCOMMODATIONS( 1444 WELFARE(1445 AMERICANS WITH

OtSABUJTieS-EMPLOYMENT(1446 AMERICANS WITHDISABILITIES-OTHER( |440 OTHERCMLRIGHTS

( 1362(1365( |368

PERSONAL INJURY -MED MALPRACTICEPERSONAL INJURYPROOUCT LIABILITYASBESTOS PERSONALINJURY PROOUCTLIABILITY

(1630(1640(1650( (660(1690

PERSONAL PROPERTY

PROPERTY RIGHTS( 1820 COPYRIGHTS( 1830 PATENT( J840 TRADEMARK

(1370( |371( | 380(1385

OTHER FRAUOTRUTH IN LENOINGOTHER PERSONALPROPERTYOAMAGEPROPERTY DAMAGEPROOUCT LIABILITY

LABOR

( | 710 FAIR LABORSTANOARDSACTLABOR/MGMTRELATIONS( 1730 LABOR/MGMTREPORTING*DISCLOSURE AC TRAILWAYLABOR AC TOTHERLABORLITIGATIONEMPLRETINCSECURITY ACT

(1720

SOCIAL SECURITY( 1861 HIA(139Sfl)( | 8 62 BLACK LUNG (923)( 1863 OtWODIWW (405(g))( J 86 4 S SIO TITLE XVI( I865 RSI (405(g))

FEDERAL TAX SUITS( 1870 TAXES(U.S PlaintifforDefendant)( |871 IRS-THIRO PARTY

26 US C 7609

I 1480( 1490( |810(|8S0

I 1875

I |890(1891(1892(1893(1894(1895(1900

( |9S0

PROPERTYLANDCONDEMNATIONFORECLOSURERENTLEASE*EJECTMENTTORTS TOLANDTORT PROOUCTLIABILITYALLOTHERREAL PROPERTY

PRISONER PETITIONS

[J740(1790{ |791

CftecA- if demandedincomplaint:CHECK IF THIS ISACLASS ACTIONUNOER F.RC.P. 23ND $ OTHERYES onlyifdemanded in complaintDEMAND: D YES 0 NO

(1510

( 1530( IS3S( |S40tlSSO(1555

MOTIONS TOVACATE SENTENCE20U SC2 2 5 5HABEAS CORPUSOEATH PENALTYMANDAMUS* OTHERCIVIL RIGHTSPRISON CONDITION

EMIGRATION( 1462 NATURALIZATION

APPLICATION(1463 HABEASCORPUS-

ALIENDETAINEE{ 1465 OTHER IMMIGRATION

ACTIONS

M lDO YOU CLAIM THIS CASE IS RELATED TOACIVIL CASE NOW PENDING IN SDNY?IF SO , STATE:JUDGE Cote .DOCKET NUMBER1:11 -md-02293

See Attachment E, "Statement of Related Case"NOTE: Please submit atthetime oftiling anexplanation ofwhycasesare deemed related.

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AN x IN ONE BOX ONLY) " ORIGIN 1 Original L] 2a. Removed from 3 Remanded from 4 Reinstated or Q 5 Transferred from Q 6 Multidistrict 7Appeal to Oistrict

S t a t A Cm l r f Annu l ! a t d P n ur t DAnnAHA^ /O :*.. r . i . . , : . . . , . ,__ - .__ . .roceeding S t a t e Cou r tLI 2b.Removed from

Sta te Cour t AN Oat l e a st o n eparty is pr o se .

Appellate Court Reopened {Specify Oistrict) Litigation Judge fromMagistrate JudgeJudgment

AN x IN ONE BOXONLY) BASIS OF JURISDICTION1 U.S. PLAINTIFF 0 2 U.S. DEFENDANT 3 FEDERAL QUESTION D4 DIVERSITY(U.S. NOT A PARTY)

IFDIVERSITY, INDICATECITIZENSHIP BELOW.(28 USC 1322, 1441)

CITIZENSHIPOF PRINCIPAL PARTIES (FOR DIVERSITY CASES ONLY)(Placean [X] inone box for Plaintiff and one box for Defendant)OF THIS STATE

IZEN OF ANOTHER STATE ( ] 2 { | 2

PTF O EF(li in CITIZEN OR SUB JEC T OF A

FOREIGN COUNTRY

PTF OEF PTF DEF I 3 t 13 INCORPORATED and PRINCIPAL PLACE ( )S [J5OF BUSINESS IN ANOTHER STATE

INCORPORATED or PRINCIPAL PLACE f. ) (MOF BUSINESS IN THI S STATE

FOREIGN NATION (1 6 [ ]6

ADDRESS(ES) ANDCOUNTY(IES)

States Department of Justiceitrust Division, Litigation III0 5 th S tree t NW, Sui te 4000ington, D.C. 20530

ANTS)ADDRESS(ES) ANDCOUNTY(IES)

Attachment D, "Defendants) Address(es) andCounty(ies)"

ADDRESS UNKNOWNREPRESENTATION ISHEREBY MADE THAT. ATTHIS TIME. IHAVE BEEN UNABLE. WITH REASONABLE DILIGENCE TO ASCERTAIN THEADDRESSES OF THE FOLLOWING DEFENDANTS:

one: THIS ACTION SHOULD BE ASSIGNED TO: Q WHITE PLAINS \7\ MANHATTAN(DONOTcheckeitherboxif thisa PRISONER PETITION.)TE,/ /

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UnitedStates v.Apple, Inc. et al. .At t a chmen t A to Civ i l Cov er Sh ee t

Defendan t s

Apple, Inc.Hachette Book Group, Inc.HarperCollins Publishers L.L.C.Verlagsgruppe Georg von Holtzbrinck GmbHHoltzbrinck Publishers, LLC d/b/a MacmillanThe Penguin Group, A Division ofPearson PLCPenguin Group (USA), Inc.Simon & Schuster, Inc.

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UnitedStates v. Apple, Inc. et al.At t a chmen t B t o C iv il Cov er Sh e et

Plaintiffs AttorneysMark W. Ryanmark.w.ryan@usdoj.govDavid C. Kullydavid.kully@usdoj .govDaniel McCuaig*daniel.mccuaig@usdoj .govNathan P. Suttonnathan.sutton@usdoj.govMary Beth McGeemary.beth.mcgee@usdoj.govOwen M. Kendlerowen.kendler@usdoj.govWilliam H. Jonesbill j ones2@usdoj.govStephen T. Fairchildstephen.fairchild@usdoj.gov

United States Department of JusticeAntitrust Division, Litigation III450 5th Street, NW, Suite 4000Washington, D.C. 20530Telephone: (202) 307-0520Facsimile: (202) 514-7308*Attorney ofRecord

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United States v. Apple, Inc. et al.At t a chmen t C to Civi l Cover Shee t

Defendants' AttorneysApple, Inc.Richard ParkerO'Melveny & Myers LLP1625 Eye Street, NWWashington, DC 20006rparker@omm.comHachette Book Group, Inc.P au l Y deFreshfields Bruckhaus Deringer US LLP701 Pennsylvania Avenue, NWSu it e 600Washington, DC 20004-2692HarperCollins Publishers L.L.C.Clifford H. AronsonSkadden, Arps, Slate, Meagher & Flom LLPFour Times SquareNew York, NY 10036-6522Verlagsgruppe Georg von Holtzbrinck GmbH & Holtzbrinck Publishers, LLC d/b/aMacmil lanJ oe l M . M it ni ckSidley Austin LLP787 S ev en th Av enueNew York, NY 10019The Penguin Group, A Division of Pearson PLC & Penguin Group (USA), Inc.Daniel F. MclnnisAkin Gump Strauss Hauer & Feld LLP1333 New Hampshire Avenue, NWWashington, DC 20036-1564Simon & Schuster, Inc.Helene D. JaffeP r oskauer Rose LLPEleven Times SquareNew York, NY 10036-8299

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UnitedStates v. Apple, Inc. et al.At t a chmen t D to C iv il Cove r Shee t

Defendant(s) Address(es) and County(ies)Apple, Inc.1 Infinite LoopCupertino, CA 95014Hachette Book Group, Inc.237 P a rk Av enueNew York, NY 10017HarperCollins Publishers L.L.C.10 E. 53rd StreetNew York, NY 10022Verlagsgruppe Georg von Holtzbrinck GmbHGansheidestraBe 26Stuttgart 70184GermanyHoltzbrinck Publishers, LLC d/b/a Macmillan175 Fifth AvenueNew York, NY 10010The Penguin Group, A Division of Pearson PLC80 S tr an dLondon WC2R 0RLUnited KingdomPenguin Group (USA) Inc.375 Hudson StreetNew York, NY 10014Simon & Schuster, Inc.1230 Avenue o f t he Ameri casNew York, NY 10020

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UnitedStates v.Apple, Inc. et al.At t a chmen t E to Civ i l Cover Sheet

S ta temen t o f Related Case

Pursuant to Rule for the Division ofBusiness Among District Judges (SouthernDistrict) 13, the United States respectfullyrequests that this case, United States v. Apple,Inc. et al., be designated as related to Inre Electronic Books Antitrust Litigation, No.1:1l-md-02293 (DLC), presently pending before the Honorable Judge Denise Cote. Bothcases involve allegationsofviolationsof Section 1 of the ShermanAct, 15U.S.C. 1, inconnection with the sale of electronic books in the United States. There is substantialoverlap as to the identityof the defendantsas well as the factual allegations giving rise tothe antitrust claims in the different cases. The United Statesbelievesthat assigning thiscase to Judge Cote will therefore promote judicial efficiency and facilitate reasonablecoordination among the parties to the proceedings. At this time, the United States has noplans to move to join these cases for trial pursuant to Rule 13(e).