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Apple Settles State and Consumer Class Action E-Book Price Fixing Lawsuit

ibooks-iconAccording to a letter filed in the Southern District Court of New York, Apple has reached an out-of-court settlement with both class action lawyers and state district attorneys over e-book price-fixing, reports Bloomberg.

Settlement details remain sealed and must be approved by the court. If approved, this agreement will end litigation ahead of a potentially costly damages trial that was slated to begin July 14. Apple faced more than $800 million in damages in this class-action antitrust lawsuit involving both consumers and states.
Steve Berman, a lawyer representing the plaintiffs, said by phone that all the U.S. attorneys general and consumers settled the case. Berman said he filed a memorandum of understanding with the court under seal, which prevents him from describing the agreement.
In an earlier decision, Apple was found guilty of conspiring to fix e-book prices in a lawsuit brought by the U.S. Department of Justice. As part of its preparations for launching the iBookstore alongside the iPad in 2010, Apple sought to weaken Amazon's hold on the industry and change the business model that governed the sale of e-books, an effort that resulted in higher prices for consumers. Apple filed an appeal in that case earlier this year.

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11 weeks ago
All while Amazon wields complete monopoly power in the bookseller world. Unbelievable....
Rating: 7 Votes
11 weeks ago
But book prices have not changed. Amazon still sells books as a loss lead at the author/publisher's expense, and iBooks are still MSRP sticker priced. This whole thing accomplished nothing but putting money in lawyer's pockets.
Rating: 5 Votes
11 weeks ago

Apple sought to weaken Amazon's hold on the industry and change the business model that governed the sale of e-books, an effort that resulted in higher prices for consumers. Apple filed an appeal in that case earlier this year.

As a publisher who sets a firm wholesale price on the books I publish I welcomed the agency model Apple proposed. It "raised prices to consumers" by protecting "copyright owners' rights to set wholesale prices to above cost".

Amazon wanted to sell loss leader products and transfer the cost reductions to copyright owners and not compensate them for their work since under the Amazon model the owner gets a percentage of actual sale price, even if it is $1 or $0.

That's a ripoff.

The fact they exploited a wrinkle in regulator attitudes (not written down) and thus gave civil plaintiffs a foothold based on the arbitrary and monologue rulings of regulators, means this country, in fact, does not operate under the rule of law.

It's also an example of the majority squashing the minority.

Rocketman

cite (pdf):
http://www.v-serv.com/usr/ATFE-03-16-09.pdf
Rating: 4 Votes
11 weeks ago

Glad this is out of the way, it was a slam dunk, they clearly did conspire to keep prices high, the evidence is clear for everyone to see except those who dont want to.

Amazon kept (and keeps) book prices low, people talk about a "monopoly" but it patently isn't, there are numerous places to buy books from, online or in print. The only monopoly (or to be accurate oligopoly) was the conspiracies of a handful of major publishers and Apple to keep prices high.


The only thing the "conspirators" did was enact an agency model which keeps vendors like Amazon from instituting aggressive "loss leaders". These below-cost prices which would eventually turn into predatory contract negotiations like we have now with Hatchette and Time Warner.

And it's not over for either Apple or Amazon.
Rating: 3 Votes
11 weeks ago

Ok I give up. Sorry I wasted your time. It's my poor English that leads me to raw and rough simplifications. Bye.


Apple clearly was in the wrong in this case and the fact that posters in here are arguing keeping prices higher for the consumers isn't a negative is inane.
Rating: 3 Votes
11 weeks ago
I'm not feeling shortsighted. I look beyond the names involved, I see a company found guilty for fixing ebook prices (raising prices for final consumers). I see the same company reaching out of court settlements. And I see some guys trying to explain me that an higher price was better in the end. I live on another planet, different from yours.
Rating: 2 Votes
11 weeks ago

So? Amazon's is looking out for the consumer by lowering prices, how is that a bad thing? They're fighting the greedy corporations and writers. Apple was just looking to inflate prices so they could get their cut.


Funny to see all these " consumers" willing to pay more just to show off how rich they are.
I probably live on another planet, that one where you have to earn the money you want to spend


Funny to see all these "consumers" who can't see beyond their own wallet. How much more did an average consumer on a tight budget pay under agency pricing? $5? Maybe $10? Going by the amounts of the refunds that people have posted, probably less than that. Personally, I didn't buy a single eBook.

I think that encouraging quality and diversity of content is a good thing. I think that consolidating all the power over an industry as culturally important as the book industry in a corporation like Amazon is bad.

As much as the anti-Apple position would like to pretend that Apple actions resulted in an increase in price over the price established by a free market, the reality is that the pre-Apple market rate was set by Amazon, and Amazon alone. The post-Apple market rate was set by dozens of competing publishers. I prefer a more competitive market.

I also think it was hypocritical of the DOJ to go after an alleged conspiracy of publishers that made up 40% of the market and then turn around and approve the merger of the top 2 publishers to give them control of more than 30% of the market.
Rating: 2 Votes
11 weeks ago

Glad this is out of the way, it was a slam dunk,


The settlment is contingent upon the appeal of the DOJ case.

they clearly did conspire to keep prices high, the evidence is clear for everyone to see except those who dont want to.


Care to post this clear evidence? I've been asking in every post on this topic. The best I get is "agency pricing bad" or "mfn bad". Even though the judge herself said that they are legal alone or in combination.

Amazon kept (and keeps) book prices low, people talk about a "monopoly" but it patently isn't, there are numerous places to buy books from, online or in print. The only monopoly (or to be accurate oligopoly) was the conspiracies of a handful of major publishers and Apple to keep prices high.


Amazon was certainly a monopoly as defined by the FTC prior to Apple's entry into the eBook market and arguably still is today.

http://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/single-firm-conduct/monopolization-defined
Rating: 2 Votes
11 weeks ago
Glad this is out of the way, it was a slam dunk, they clearly did conspire to keep prices high, the evidence is clear for everyone to see except those who dont want to.

Amazon kept (and keeps) book prices low, people talk about a "monopoly" but it patently isn't, there are numerous places to buy books from, online or in print. The only monopoly (or to be accurate oligopoly) was the conspiracies of a handful of major publishers and Apple to keep prices high.
Rating: 2 Votes
11 weeks ago

Indeed. Customers and authors are better served by Amazon's values than Apple's. Hopefully this has put Apple in their place.


That's the most ridiculous, short-sighted, ignorant statement that I have seen in a long time. Amazon is currently involved in using its monopoly position to force publishers like Hachette and Time Warner to do what Amazon wants, by removing the products of these companies from their website.

Surely customers and authors are really well-served by products disappearing from Amazon because Amazon is busy blackmailing the publishers.

----------

Isn't the solution simple though? Don't sell on Amazon.


Amazon is in a monopoly position. Companies are forced to sell through Amazon, or face major financial consequences. And when Apple tried to provide an alternative, you saw how that ended.
Rating: 2 Votes

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