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Apple Loses Ebook Price Fixing Appeal, Must Pay $450 Million
An anonymous reader writes: A federal appeals court ruled 2-1 today that Apple indeed conspired with publishers to increase ebook prices. The ruling puts Apple on the hook for the $450 million settlement reached in 2014 with lawyers and attorneys general from 33 states. The Justice Dept. contended that the price-fixing conspiracy raised the price of some e-books from the $10 standard set by Amazon to $13-$15. The one dissenting judge argued that Apple's efforts weren't anti-competitive because Amazon held 90% of the market at the time. Apple is unhappy with the ruling, but they haven't announced plans to take the case further. They said, "While we want to put this behind us, the case is about principles and values. We know we did nothing wrong back in 2010 and are assessing next steps."
Every publisher believes that the e-books don't really compete against one another in price because each one is unique. They aren't interchangeable...someone won't say "wow, I bet I can get this same book cheaper somewhere else..."
But they are wrong. Lately, people have been able to get the same book cheaper by buying a used physical copy (still cheaper even after shipping costs). But, apart from that, when the price of a book exceeds the potential customer's sense of the book's value, they absolutely will buy a completely different book instead.
No product is immune to market forces, which is a good thing, and price-fixing harms the majority.
Enh... ok.... the pedantic in me is speaking up. Apologies in advance.
Although it may not apply in this case, I feel compelled to point out that "doing nothing wrong" and "not being criminally liable" are two entirely different things. The first is a moral judgement, and the second is decided by law, which may or may not be related to anything moral.
Conversely "doing something that any reasonable person would know is wrong" and "being criminally liable for such action" are two entirely different things as well. You could probably think of several recent examples in the news.
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
Why shouldn't you be able to buy it at the price of a used book? After all, you can't resell it. I'd say that's a right worth a lot of money.
According that Apple only had net revenue of $42.1 billion. So that's like our 30k household finding $320 in the couch. A rather nice day I'm sure.
Not really. $320 is a lot of food money for the family living on $30,000.
It may be the same percentage, but after a certain amount, it doesn't affect your lifestyle(or business) in any real sense.
You think that if Bill Gates lost 1/2 billion overnight, his life would change at all?
I guarantee that the family will feel the loss of $320 far more than Gates or Apple losing $500,000,000.
The fine is a joke. The US needs to start adding in punitive damages to corporate bad behaviour. Off the cuff numbers: If the price fixing gave Apple $1 billion in profit, the fine should be $4 billion.
Even with the fines, it is more profitable to behave badly than it is to be honest. Apple would do it all over again, except try a little harder to get away with it.
Only if you are dumb enough to think that the price to the consumer is related to the cost of production. Cost of production may set the minimum that a producer will sell for. The actual selling price is what people will pay. Pretty simple, actually.
https://tidbits.com/article/13912 has a good explanation of why this is illegal and how people were harmed.
In essence there's nothing wrong with putting something for sale at a certain price. However in this case harm was done. the rise in prices hurt consumers, and publishers made less money because quantity of sales were lost and more money was being taken by the distributors.
This becomes illegal because Apple colluded with publishers. The whole point of antitrust law is to prevent prices from rising due to anti-competitive measures exactly like this.