Apple Blames Book Publishers in E-Books Antitrust Lawsuit
Reuters is reporting that Apple has responded to the Justice Department's accusations that the company colluded with publishers to increase e-book pricing, saying that it negotiated with the publishers separately and reached different agreements with each.
But Apple said the publishers had decided, independent of Apple, to eliminate discounts on wholesale book prices of e-books, to sell lucrative hardcover books first to bookstores in a practice called windowing and to take other measures to push Amazon to raise prices.
In a court filing dated April 26 but released on Tuesday, Apple said it had approached publishers to create an online bookstore that would eventually become the iBookstore and had demanded a 30 percent commission, that publishers would not undercut prices paid to Apple, and that "windowing" be scrapped.
Apple said that points of contention in early negotiations centered around Apple's demand for a 30 percent commission and price caps. Apple went on to note that each publisher immediately offered its own counterproposals in what Apple described as "tough negotiations."
The company also claims that before it entered the market the publishers were engaged in a battle to break Amazon's grip on the low-cost e-book market, with Apple laying the blame for any potential collusion on the publishers.
The lawsuit was originally filed in April 2012 and included HarperCollins, Simon and Schuster, Hachette Book Group, Macmillan and Penguin, but the Justice Deparment settled with the publishers and has since concentrated on Apple. Recently, CEO Tim Cook was ordered to testify in the case.
Popular Stories
Phishing attacks taking advantage of Apple's password reset feature have become increasingly common, according to a report from KrebsOnSecurity. Multiple Apple users have been targeted in an attack that bombards them with an endless stream of notifications or multi-factor authentication (MFA) messages in an attempt to cause panic so they'll respond favorably to social engineering. An...
At least some Apple software engineers continue to believe that iOS 18 will be the "biggest" update in the iPhone's history, according to Bloomberg's Mark Gurman. Below, we recap rumored features and changes for the iPhone. "The iOS 18 update is expected to be the most ambitious overhaul of the iPhone's software in its history, according to people working on the upgrade," wrote Gurman, in a r...
Apple today announced that its 35th annual Worldwide Developers Conference is set to take place from Monday, June 10 to Friday, June 14. As with WWDC events since 2020, WWDC 2024 will be an online event that is open to all developers at no cost. Subscribe to the MacRumors YouTube channel for more videos. WWDC 2024 will include online sessions and labs so that developers can learn about new...
Apple may be planning to add support for "custom routes" in Apple Maps in iOS 18, according to code reviewed by MacRumors. Apple Maps does not currently offer a way to input self-selected routes, with Maps users limited to Apple's pre-selected options, but that may change in iOS 18. Apple has pushed an iOS 18 file to its maps backend labeled "CustomRouteCreation." While not much is revealed...
Apple on late Tuesday released revised versions of iOS 17.4.1 and iPadOS 17.4.1 with an updated build number of 21E237, according to MacRumors contributor Aaron Perris. The updates previously had a build number of 21E236. The revised updates are available for all iPhone and iPad models that are compatible with iOS 17 and iPadOS 17, but they can only be installed via the Finder app on macOS...
Apple will introduce new iPad Pro and iPad Air models in early May, according to Bloomberg's Mark Gurman. Gurman previously suggested the new iPads would come out in March, and then April, but the timeline has been pushed back once again. Subscribe to the MacRumors YouTube channel for more videos. Apple is working on updates to both the iPad Pro and iPad Air models. The iPad Pro models will...
With the App Store and app ecosystem undergoing major changes in the European Union, The Wall Street Journal today shared a profile on App Store chief Phil Schiller, who is responsible for the App Store. Though Schiller transitioned from marketing chief to "Apple Fellow" in 2020 to take a step back from Apple and spend more time on personal projects and friends, he is reportedly working...
Top Rated Comments
Mostly cloudy with a 100% chance of multiple lawsuit stories.
Fill in the blank with nearly anything & it would be appropriate :)
It's called a loss leader. Sell some popular books at cost or below cost, sell 95% of other ebooks at profit. End result: overall profits
Supermarkets have been doing this for decades.
Apple is using this "loss leader" pricing right now for its iBookstore on a few ebooks. Apple could have competed with Amazon on prices if it wanted to. Buy ebook at wholesale like Amazon did. Have a sale on a few popular titles and sell the rest at profits.
Apple is better suited to this strategy than Amazon since Apple is many times more profitable and have a bigger cash hoard.
But Apple wanted the 30% margin. Wholesale competition means the margin would be very tiny. Best way to get the 30% margin is to forced Amazon and B&N and other ebookstore to take the 30% margin too.
When retailers are guaranteed 30% margin and no price competition, who lose out? Consumers
That's why the publishers have agreed to pay something like $52 million in restitution for the ebook price fixing.
----------
What law has Amazon broken in their quest to destroy competitions and preventing competitors from entering the market?
Amazon can't be guilty of what they haven't done yet. I.E. raising the price when they have a monopoly.
In fact, when Amazon have 90% of the ebook market and they jack up the price, buying it at $7 wholesale and selling at $12, what to prevent competitors like a guy in his garage can buy $7 wholesale and sell it at $9.
Amazon price: $12
Competitor price: $9
Look at Apple domination in digital music selling at $1.29.
Amazon competed buy selling a lot of popular songs at $0.99, less margin but increase market share. Some did switch from Itunes to AmazonMP3.
You seem to imply that before the iBook store there was a competitive situation. Can't agree. Amazon was guilty of predatory pricing in my opinion and this in itself was anti trust. Now, I agree two wrongs don't make a right, but to sanction Apple for manipulating a "market" where it wasn't possible to profit from sales is wrong. If the anti trust bodies had sanctioned Amazon for its pricing policies, and a viable market had emerged, then there would have been no need for the publishers to try to protect themselves from being beholden to a single outlet.