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
The redesigned MacBook Air with the all-new M2 Apple silicon chip will be available for customers starting Friday, July 15, MacRumors has learned from a retail source. The new MacBook Air was announced and previewed during WWDC earlier this month, with Apple stating availability will begin in July. The MacBook Air features a redesigned body that is thinner and lighter than the previous...
Fifteen years ago to this day, the iPhone, the revolutionary device presented to the world by the late Steve Jobs, officially went on sale.
The first iPhone was announced by Steve Jobs on January 9, 2007, and went on sale on June 29, 2007. "An iPod, a phone, an internet mobile communicator... these are not three separate devices," Jobs famously said. "Today, Apple is going to reinvent the...
Apple last week launched an updated version of the 13-inch MacBook Pro, and it is the first Mac that is equipped with an updated M2 chip. As it's using a brand new chip, we thought we'd pick up the M2 MacBook Pro and compare it to the prior-generation M1 MacBook Pro to see just what's new.
Subscribe to the MacRumors YouTube channel for more videos. For the video comparison, we're using the...
The Wall Street Journal's Joanna Stern today shared a new documentary about the evolution of the iPhone ahead of the 15th anniversary of the device launching on June 29, 2007. The documentary includes an interview with Apple's marketing chief Greg Joswiak, iPhone co-creator Tony Fadell, and a family of iPhone users.
One segment of the interview reflects on Android smartphones gaining larger...
With many customers choosing to upgrade their iPhone every two or three years nowadays, there are lots of iPhone 11 Pro users who might be interested in upgrading to the iPhone 14 Pro later this year. Those people are in for a treat, as three years of iPhone generations equals a long list of new features and changes to look forward to.
Below, we've put together a list of new features and...
Apple today began selling refurbished Mac Studio models for the first time in the United States, Canada, and select European countries, such as Belgium, Germany, Ireland, Spain, Switzerland, the Netherlands, and the United Kingdom.
In the United States, two refurbished Mac Studio configurations are currently available, including one with the M1 Max chip (10-core CPU and 24-core GPU) for...
There appears to be a serious bug in macOS High Sierra that enables the root superuser on a Mac with a blank password and no security check. The bug, discovered by developer Lemi Ergin, lets anyone log into an admin account using the username "root" with no password. This works when attempting to access an administrator's account on an unlocked Mac, and it also provides access at the login...
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.