Apple Rebuts Antitrust Charges Over E-Book Pricing

ibooks iconAn Apple spokeswoman has officially responded to the lawsuit filed yesterday by the U.S. Department of Justice over the Apple-backed agency model of e-book pricing.

In a statement to All Things D, Apple spokesman Tom Neumayr:

The DOJ’s accusation of collusion against Apple is simply not true. The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry. Since then customers have benefited from eBooks that are more interactive and engaging. Just as we’ve allowed developers to set prices on the App Store, publishers set prices on the iBookstore.

Legal experts commenting on the case said the Justice Department has a steep hill to climb to catch Apple on antitrust charges. Some experts suggest that even amid claims that the publishers met to discuss a shift to an agency model being championed by Apple, the publishers may not be found guilty of antitrust violations.

Top Rated Comments

EricNau Avatar
158 months ago
Publishers also determined their own revenue per book prior to the agency model. The difference now, is that the customer pays more and Apple (or Amazon) gets a larger percentage of the overall price.

If Amazon wants to forgo their profits and pass the savings along to the customer (while still allowing the publisher to determine their own profit per book), they should have that option (and as customers, so should we).

The fact that paperbacks on Amazon are now cheaper than ebooks just highlights how ridiculous the agency model is. If a publisher wants to make $7.99 per book, they should sell the book to Amazon for $7.99 and allow Amazon to determine their own revenue by choosing the final price payed by the customer (as per the wholesale model). Apple had no right to require publishers to change their relationship with Amazon, just so Apple (not the publisher) could increase their own profits.
Score: 11 Votes (Like | Disagree)
Jayse Avatar
158 months ago
Popcorn at the ready, this is gonna be fun. I don't see the DOJ getting up that hill!
Score: 5 Votes (Like | Disagree)
stockscalper Avatar
158 months ago
There was the Sony Walkman, then an assortment of mp3 players. Apple simplified technology and now owns the music industry. They did the same thing with Apps. And now, it looks like the same thing will happen with eBooks. Providing an effective, efficient, and easy method to purchase products will always win over cumbersome, time consuming systems. People will pay more for 'easy' because of it's perceived value.

We're not talking about simplifying the way people buy books/ebooks. That had already been done by Sony, Amazon, Kobo and Barnes and Noble long before Apple got in the game. What's at issue is Apple conspiring with the six largest publishers to fix prices in a monopolistic scheme that has long been illegal in this country.

Anybody who had an ereader knows what happened to ebook prices when Apple cut this deal. There is case precedent, ala Standard Oil, that says the DOJ doesn't need proof of the conspiracy, only evidence of what happened in the market after the deal went into place. Here, as in the famous Standard Oil case, prices shot through the roof. I saw ebooks that had been selling for $5.99 go to $14.99. This is what is going to nail Apple's hide to the wall. It has nothing to do with "innovation."
Score: 4 Votes (Like | Disagree)
mfulton Avatar
158 months ago
What is your source for the iPad marketshare? I found with a Google search a few sources claiming that the iPad has the highest tablet market share, 61% or so. This includes the Kindle Fire, but I don't know if it includes all Kindles.

iPad market share doesn't translate into iBookstore market share.

I use the iPad as my eReader, and it's almost completely within the Kindle app. I very rarely use the iBooks app.
Score: 3 Votes (Like | Disagree)
Tarzanman Avatar
158 months ago
A lot of people claiming that Apple wasn't doing anything wrong and that Amazon (who isn't even part of the suit) was 'ruining things' have apparently not read the lawsuit and probably do not understand what Apple did in concert with the book publishers.

I hope Apple gets destroyed by the feds in court. Anyone abusing their position and breaking the law to illegally extract more money out of consumer pockets deserves punishment.

Apple damned well knew what the publishers doing was illegal collusion, and looked the other way. Apple's involvement implicates them since they have directly profited from the illegal action.

Go DOJ, go!
Score: 3 Votes (Like | Disagree)
jimboutilier Avatar
158 months ago
All I can say is that I had all the content I wanted and paid a lot less before Apple got involved.

Apple appealed to publishers greed to get content they couldn't get any other way and all end users suffered higher prices as a result.

I have no problem with Apple negotiating whatever contracts they wanted to between themselves and publishers. But where those contracts impacted entities other than Apple and the publisher (e.g. other retailers), I consider that interference and collusion which should be punished.
Score: 3 Votes (Like | Disagree)

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