Apple Gets Huge Fine For Fixing Book Prices

Posted: Mar 7 2016, 12:47pm CST | by , in News | Apple

 
Apple Gets Huge Fine for Fixing Book Prices
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Apple has been found guilty of e-book price fixing.

The Supreme Court has declined to hear Apple's appeal of a decision from a lower court that is going to cause them to pay a $450 million fine as part of its settlement. The case was on the premise that Apple conspired with five publishers to increase e-book prices.

The decision from the court leaves in place the 2nd U.S. Circuit Court of Appeals that found Apple to be liable for taking part with five major publishers, including Hachette; News Corp's HarperCollins; Penguin Group Inc; Macmillan; and Simon & Schuster, a division of CBS to keep e-book prices high. Doing so would have damaged not only other online retailers, but it would have damaged Amazon's dominant position.

In a statement, Apple said, "Apple did not conspire to fix e-book pricing and this ruling does nothing to change the facts We are disappointed the Court does not recognize the innovation and choice the iBooks Store brought for consumers. While we want to put this behind us, the case is about principles and values. We know we did nothing wrong back in 2010."

Before the final decision, there was an unusual grouping of booksellers (including Barnes and Nobles), the American Booksellers Association, and the Author Guild filed an Amicus Curiae, friend of the court, petition in Apple's favor.

They said thta "competition is vital to the book industry." And, the group stated, "In late 2009, the market for retail distribution of electronic books ("e-books") was essentially a monopoly, with Amazon.com, Inc. ("Amazon") controlling 90% of e-book sales. Amazon sold many of the most popular e-books at a loss, making it difficult for other retailers to enter the e-book market as they 'would run the risk of losing money if [they] tried.'"

"Apple's entry into the e-book market," they argued, means that "a single distributor no longer controlled the electronic marketplace of ideas. The Department of Justice (DoJ) wasn't impressed. They argued, Apple had "orchestrated a conspiracy with five major publishers to eliminate retail price competition and raise e-book prices."

The DoJ maintained that the illegal scheme has raised some e-book prices to $12.99 or $14.99 from $9.99, and the SCOTUS agreed.

In a statement, Bill Baer, head of the DoJ's antitrust division said "Apple's liability for knowingly conspiring with book publishers to raise the prices of e-books is settled once and for all. Baer added that Apple and the publishers' price-fixing conspiracy was nothing less than "cynical misconduct."

Buyers of Apple e-books may see a small return, according to Reuters.

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<a href="/latest_stories/all/all/46" rel="author">Noel Diem</a>
Noel passion is to write about geek culture.

 

 

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