Judge Rules that Apple Conspired to Raise eBook Prices
Posted on July 10, 2013 2:57 PM by Rob Williams
In 2010, the United States’ Department of Justice filed a suit against Apple for conspiring to raise eBook prices. Today, District Judge Denise Cote reveals that she agrees, with penalties against Apple to be discussed later.
The case began not long after Apple’s original iPad release, which had a big eBook focus. Stemming from the fact that some publishers didn’t like Amazon’s method of keeping book prices low (aka: by force), some teamed up with Apple, which allegedly became a ringleader of sorts. Soon, books found through iTunes carried prices of $12.99 and $14.99, rather than the $9.99 that Amazon had been charging. Eventually, Amazon’s prices rose as well.
Apple feels that it’s being wronged in the case, with a spokesperson claiming, “Apple did not conspire to fix e-book pricing. When we introduced the iBookstore in 2010, we gave customers more choice, injecting much needed innovation and competition into the market, breaking Amazon’s monopolistic grip on the publishing industry. We’ve done nothing wrong.“
Given the massive popularity of Amazon’s Kindle platform, it’s easy to see where Apple is coming from on that point, but the obvious increases in eBook prices that followed the iPad’s launch stood out like a sore thumb.
Apple’s planning to appeal its fate, although as Judge Cote seems sure that Apple is just pleading ignorance here, it seems likely that the company will be hit with a requirement to refund the excess that its customers paid, which could be valued in the hundreds of millions (it’s worth noting that some publishers that settled with the DoJ before going to trial also reimbursed a total of $164 million to customers – including a staggering $75 million from Penguin alone).