Published in News

US's highest court forces Apple to face facts

by on08 March 2016


Steve Jobs ran a cartel

It has taken the highest court in the US to do it, but Apple finally has to admit that its patron saint was a monopolist who ran an ebook cartel designed to raise the cost of books to feather Jobs’ Mobs’ nest.

Apple has been in complete denial about the case even as it lost court case after court case and finally reached the US Supreme Court. Apple’s last argument was pretty weak – either we are able to do what we like or it “chill innovation and risk-taking.”

Unfortunately for Apple, the Supreme Court does not partake of its cool-aid and refused to even hear the case.

This leaves in place a June 2015 ruling by the New York-based 2nd U.S. Circuit Court of Appeals that found Apple liable for engaging in a conspiracy that violated federal antitrust laws. The 2nd Circuit's ruling followed a 2013 decision by U.S. District Judge Denise Cote that Apple played a "central role" in a conspiracy with publishers to raise e-book prices.

The Justice Department said the scheme caused some e-book prices to rise to $12.99 or $14.99 from the $9.99 price previously charged by market leader Amazon.com.
Bill Baer, head of the U.S. Justice Department's antitrust division said that Apple’s liability for knowingly conspiring with book publishers to raise the prices of e-books is settled once and for all.

Publishers that the Justice Department said conspired with Apple include Lagardere, Hachette Book Group, HarperCollins Publishers, Penguin Group, Simon & Schuster and Macmillan. Apple’s co-conspirators all fessed up and did a deal with the prosecutors. Only Apple could not actually see what it had done wrong.

Apple and the publishers agreed on an arrangement in which Apple would get a 30 percent commission and publishers were allowed to set the prices for their books, a tactic known as "agency pricing" that prevents discounting.

The publishers also agreed they would charge all outlets the same amount, meaning Amazon was forced to raise its prices. E-books that had cost $9.99 suddenly cost $12.99 or $14.99.

Last modified on 08 March 2016
Rate this item
(11 votes)

Read more about: