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Tag: price fixing

Apple Loses US Anti-trust Case

United States District Judge Denise Cote has ruled that Apple did indeed conspire with a group of book publishers in order to eliminate competition and set ebook prices higher, and force Amazon to do the same. This ruling came as no surprise to legal experts following the trial. And given that all of the publishers in the law suit had already settled, one cannot help but wonder why Apple insist upon going to trial anyway.

If Steve Jobs were still alive, it would be easy to imagine that his stubbornness even in the face of ridiculously long odds, would lead the company down this path. But Steve is dead and it’s time for Apple to forge a new path. Jobs did some great things, but stupid things like the ongoing legal war with Samsung and Android need to be dropped. And this misadventure will be bad for Apple both financially and in the hearts of consumers. I don’t know who Apple thought they were championing by going to trial in defense of higher ebook prices, but certainly not the average consumer.

Apple can still be a great company making cool things that empower the creative spirit in everyone. But letting Steve run the company from beyond the grave is probably not the best strategy.

Do Not Pass Go! eBook Prices May Drop As EU And US Double-team Apple And Publishers

Do not pass go do not collect $200Ars reports that the European Commission is teaming up with the US Department of Justice investigating allegations of collusion and price-fixing in the eBook market by Apple and several large publishers. Apple and publishers Harper Collins, Simon & Schuster, Pearson’s Penguin, Hachette Livre, and Macmillan are accused of working together in order to keep eBook prices artificially high, in some cases higher than the printed edition.

This alleged collusion is behind the move to the agency model in the eBook market by Amazon, Apple, and Barnes & Noble. In the agency model, publishers, rather than the retailer, set the prices of eBooks. Prior to that change, Amazon set its own prices for eBooks, often at a deep discount over the paperback cover price. Most Kindle eBooks costs $9.99 and less during that time, much to the chagrin of publishers who feared a rapid erosion of the printed book market. This changed after several of the large publishers threatened to withhold their books from the Kindle store unless Amazon agreed to the agency model they had worked out with Apple. Following this change, eBook prices rose dramatically, in some cases exceeding the cost of print.

If the EU and US actions against Apple and the publishers is successful, they will likely see large punitive fines and be forced to abandon the agency model. This could see a reduction in eBook prices which in addition to increased happiness for book readers, in this writer’s opinion, could also spark a boom in sales of eBooks and readers. Anything that grows the eBook market is quite welcome here!

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