Apple found guilty of price fixing ebooks along with publishers, penalties forthcoming

Apple found guilty of price fixing ebooks along with publishers, penalties forthcoming
While all the major publishers involved settled before going to trial, Apple tried their luck with a court case.

A federal judge has ruled today that Apple is guilty of conspiring with five major book publishers to raise e-book prices. U.S. District Judge Denise Cote in Manhattan says she found "compelling evidence" that Apple repeatedly violated federal antitrust law by conspiring and eventually eliminating competition and raising ebook prices for consumers.



The case was brought by the U.S. DOJ and 33 U.S. states and should expose Apple to damages that could be in the hundreds of millions. The publishers settled for $166 million combined but Apple's share may be triple that.

"Apple chose to join forces with the publisher defendants to raise e-book prices and equipped them with the means to do so," Cote said in a 159-page decision. "Without Apple's orchestration of this conspiracy, it would not have succeeded as it did."

The "agency model" of pricing created by Apple in 2010 before the launch of the iPad, had publishers set the price for ebooks while retailers took a commission, normally 30 percent. This led to higher prices for consumers, with Cote saying average prices went up 18 percent.

With their settlements, the publishers all had to break their agency pricing models, allowing retailers to now discount at will, again. Before Apple, Amazon was selling ebooks at cost in an effort to boost Kindle sales. Ebooks were selling for about $9.99 at the time. After Apple, prices jumped to $12.99 -$14.99.

Written by: Andre Yoskowitz @ 10 Jul 2013 19:32
Tags
Apple Price Fixing ebooks
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  • 18 comments
  • xnonsuchx

    Oh no! Apple might have to part with up to 0.5% of their $100 billion. :-)

    11.7.2013 03:18 #1

  • bobiroc

    Silly Apple... you can only get away lying, cheating, and stealing for so long.. It seems that their crooked actions are catching up to them.

    AMD Phenom II 965 @ 3.67Ghz, 8GB DDR3, ATI Radeon 5770HD, 256GB OCZ Vertex 4, 2TB Additional HDD, Windows 7 Ultimate.

    http://www.facebook.com/BlueLightningTechnicalServices

    11.7.2013 15:52 #2

  • Justoneguy

    Originally posted by bobiroc: Silly Apple... you can only get away lying, cheating, and stealing for so long.. It seems that their crooked actions are catching up to them. The sad part is, they probably made more off of the price fixing than the fine will be. Fines like these don't stop these corporations from ripping off consumers, especially if it's a company with deep pockets like Apple. It's really just a money grab by the DOJ, how many consumers do you think will actually get a refund from the books they purchased?

    11.7.2013 17:27 #3

  • ddp

    0!!!

    11.7.2013 19:52 #4

  • kutulu1

    I believe they currently own the patent for air, so we're all in trouble.

    11.7.2013 22:19 #5

  • bobiroc

    Originally posted by kutulu1: I believe they currently own the patent for air, so we're all in trouble. Only if it is iAir.

    AMD Phenom II 965 @ 3.67Ghz, 8GB DDR3, ATI Radeon 5770HD, 256GB OCZ Vertex 4, 2TB Additional HDD, Windows 7 Ultimate.

    http://www.facebook.com/BlueLightningTechnicalServices

    11.7.2013 22:29 #6

  • jwerner

    Apple is like Nike...limit the product and dealers to those who get full-retail mark and stop shipping to those who don't play by the rules. In the strictest sense of the law this is price-fixing, pure and simple. Things get complicated after that. There's been at least one court case where the Brighton Leather Accessories company was sued by a dealer whose account was closed due to excessive discounting. Brighton was able to prove that the de-valuing of the product could damage the "brand image" to a point where it would quite possibly, over time, cause the Brighton name to no longer represent the level of quality buyer's expect and readily pay for. In effect, legal price fixing can trump the seller's free-market rights. Unbelievable, but not unprecedented. Many folks may remember in the mid to later eighties when IZOD/Lacoste polo shirts became such a commodity they stopped selling even at around $20 to $25 a shirt. IZOD was the licensee for the Lacoste brand resulting in a market collapse of the company (IZOD was owned by somebody like General Mills or the like at the time). So, it can happen, witness the government forcing GM and Chrysler to close dealers in order to insure more profit (less competition = increased profits).

    Apple, of course, thumbs it's nose at human rights as well as the US government, and with deep pockets and a cadre of hot-shot lawyers is it any wonder they did an end-around on Amazon and coerced publishers to force higher market prices for ebooks? If the consumer loses, tough. The "hapless" consumer will, like sheep, get on-board and by force. This is why even though I own at least three Apple products I have a disdain for the company. I do appreciate their engineering even though I detest the closed eco-system (which is defeatable thank goodness).

    The government needs to "slam" this behavior, but I highly doubt the likely outcome will be more than a minor inconvenience.

    John Werner
    Cullman, AL

    12.7.2013 02:47 #7

  • Jemborg

    Originally posted by Justoneguy: Originally posted by bobiroc: Silly Apple... you can only get away lying, cheating, and stealing for so long.. It seems that their crooked actions are catching up to them. The sad part is, they probably made more off of the price fixing than the fine will be. Fines like these don't stop these corporations from ripping off consumers, especially if it's a company with deep pockets like Apple. It's really just a money grab by the DOJ, how many consumers do you think will actually get a refund from the books they purchased? Because you can't return everybody's money just let them get away with it? That's insane. What are you a lacky for big business?


    Its a lot easier being righteous than right.


    12.7.2013 12:39 #8

  • Mrguss

    Originally posted by Jemborg: Originally posted by Justoneguy: Originally posted by bobiroc: Silly Apple... you can only get away lying, cheating, and stealing for so long.. It seems that their crooked actions are catching up to them. The sad part is, they probably made more off of the price fixing than the fine will be. Fines like these don't stop these corporations from ripping off consumers, especially if it's a company with deep pockets like Apple. It's really just a money grab by the DOJ, how many consumers do you think will actually get a refund from the books they purchased? Because you can't return everybody's money just let them get away with it? That's insane. What are you a lacky for big business? Well the only-one's that will make the money are the Lawyer's Firms who sue them. The Fine will be very small, 'cos the U.S. Govt. is on their side.

    Just ask Exxon (The biggest Corp. on Earth) or B.of A. or.....
    - http://www.dailykos.com/story/2013/07/0...Tar-Sands-Spill
    - http://www.nytimes.com/2013/05/08/busin...erica.html?_r=0

    ..is just corporation after corporation; who's fu**ing us one way or another, and the U.S. Government just turn their eyes the other way.

    WELCOME TO AMERICA:
    [Post 2010 #CitizensUnted where the Corporations control Democracy.]


    +5000

    12.7.2013 14:28 #9

  • Jemborg

    Look I know you've got your agenda to pursue MrG but that has nothing to do with whether or not to prosecute these corporations for wrongdoing.... JFC!



    -------------------------------------------------------------------

    Its a lot easier being righteous than right.


    12.7.2013 17:54 #10

  • Mrguss

    As long the U.S. Govt. side with Corporations. Via Congress (Senate, House & WH), DOJ etc. We the people have everything to loose.

    +5000

    13.7.2013 14:56 #11

  • Jemborg

    It's beside the point.

    Its a lot easier being righteous than right.


    13.7.2013 20:33 #12

  • Justoneguy

    Originally posted by Jemborg: Originally posted by Justoneguy: Originally posted by bobiroc: Silly Apple... you can only get away lying, cheating, and stealing for so long.. It seems that their crooked actions are catching up to them. The sad part is, they probably made more off of the price fixing than the fine will be. Fines like these don't stop these corporations from ripping off consumers, especially if it's a company with deep pockets like Apple. It's really just a money grab by the DOJ, how many consumers do you think will actually get a refund from the books they purchased? Because you can't return everybody's money just let them get away with it? That's insane. What are you a lacky for big business?

    Not sure where that came from, just trying to point out that our government is just as corrupt as all the corporations they're in bed with. You read something into my comment that wasn't there.

    14.7.2013 04:29 #13

  • Jemborg

    You do know the courts are not in the same estate as the gov?

    Its a lot easier being righteous than right.


    14.7.2013 06:30 #14

  • Justoneguy

    Originally posted by Jemborg: You do know the courts are not in the same estate as the gov? Same estate? Again, not sure what your point is, or if your just being argumentative. Let me put it like this, fines will not stop this kind of behavior. The only thing that might curb it would be to seek criminal charges against people in the corporation that made the decisions, jail time. If you believe fines will stop it, well they never have. By the way, the DOJ is a branch of the federal government.
    You must be a lackey for big business if you think that "fines" are punishment enough.

    14.7.2013 12:13 #15

  • ddp

    play nice.

    14.7.2013 14:11 #16

  • Jemborg

    Criminal charges would be good too...

    Its a lot easier being righteous than right.


    14.7.2013 21:54 #17

  • ddp

    that too would be nice.

    14.7.2013 22:27 #18

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