Apple to Pay $450 Million to Settle E-Book Price Fixing Case

Discussion in ' News Discussion' started by MacRumors, Jul 16, 2014.

  1. macrumors bot


    Apr 12, 2001

    According to court records filed on Wednesday, July 16, Apple will pay $450 million as part of an out-of-court settlement with class action lawyers and state district attorneys over e-book price fixing, reports Reuters.

    Apple first reached a settlement agreement with the 33 U.S. states and territories involved in the lawsuit in June, successfully avoiding a lengthy and expensive damages trial. Settlement details were sealed at that time, however, pending court approval. $400 million of the $450 million is earmarked for consumers.

    The settlement is contingent on a pending appeals case Apple filed in February with the U.S. Circuit Court of Appeals in New York. In the filing, Apple asked the court to overturn the original ruling that found the company guilty of conspiring to fix e-book prices.
    Though found guilty, Apple has maintained its innocence throughout the dispute, claiming that it "kick-started competition in a highly concentrated market, delivering higher output, lower price levels, and accelerated innovation." Should Apple's appeal be successful, sending the claim back to District Court, the company will pay out $50 million to settle consumer damages claims. If the appeals court reverses the initial decision entirely, Apple will pay no damages.

    Along with $450 million in damages, Apple has also been subjected to several penalties levied by the U.S. Department of Justice, including an order to hire an external antitrust monitor. Publishers involved in the case, including Hachette, HarperCollins, Simon & Schuster, Macmillan, and Penguin also settled for a total of $166 million, which has already been making its way to customers in the form of refunds.

    Article Link: Apple to Pay $450 Million to Settle E-Book Price Fixing Case
  2. macrumors regular

    Feb 26, 2011
  3. macrumors newbie

    Jun 24, 2014
    Yes, I agree with you 100%.

    it's too bad that Apple has to resort to these measures when they've got billions in the bank.
  4. macrumors 601


    Sep 15, 2011
    Vilano Beach, FL
    Tim should pay it in cash. With ones.

    “Four hundred forty nine million, nine hundred, ninety nine thousand, and one ..."
    "Four hundred forty nine million, nine hundred, ninety nine thousand, and two ..."
  5. macrumors 6502a


    Jul 17, 2012
    New York City
  6. macrumors 68000

    Four oF NINE

    Sep 28, 2011
    Soviet Union
    I never understood that judgement. What exactly was the damage?
  7. macrumors regular

    Feb 14, 2011
  8. JAT
    macrumors 603

    Dec 31, 2001
    Mpls, MN
  9. macrumors regular

    Nov 19, 2012
    Yes, paying $450m as an out of court settlement screams "we are innocent" to me.
  10. macrumors 68020

    Oct 14, 2011
    Legit question here, what is the difference between what Apple did and what Amazon does? Because I hear people say that Amazon gets away with worse than what Apple did.
  11. macrumors 68000


    Oct 2, 2007
    is this the things about Apple and Publishers making prices "set" for ebooks?

    This is an odd thing. it sounds like stopping the "price fix" means a company can sell books for a really low price (even at a loss) which is GOOD for the consumer.
    BUT, that means smaller companies that cannot afford to sell that low or at a loss will LOOSE OUT. Which means less competition overall which isn't good for the consumer.

    Like a double-edged (or triple-edged) sword.
  12. macrumors 65816

    Oct 9, 2012

    A bad settlement beats a good lawsuit.
  13. macrumors 65816

    Jul 7, 2008
  14. macrumors 65816


    Apr 4, 2003
  15. macrumors regular

    May 13, 2011
    What a joke.

    Apple tries to save the e-book industry from an abusive monopolist (Amazon) and instead of being thanked for improving the state of competition, the government slaps it down to protect the monopolist.
  16. macrumors 68000


    Jun 22, 2003
    Meanwhile Amazon is actively punishing publishers and emerges unscathed.
  17. macrumors 68020


    Aug 28, 2008
    Beverly, Massachusetts
    Hi Tim! :cool: didn't know you have a MacRumors account.
  18. macrumors 65816


    Feb 7, 2013
    Hahahahahahahahaha you are so brainwashed it's unbelievable

    Hope you don't get an email signed "Tim Cook" telling you to jump off a bridge or something, you'd believe it was him.

    Tip: it's fake

    Apple can do no wrong in your eyes
  19. macrumors newbie

    Jun 24, 2014
    You realize you're quoting a guy who sent Hitler $50k for his birthday every year?
  20. macrumors newbie

    Oct 18, 2012
    The DOJ really made a bad call on this one. Their understanding of economics and free enterprise is mediated by their belief that lower prices are always better for the public. Short sighted-ness is the hallmark of our time, and the DOJ is no exception here.
  21. Editor


    Staff Member

    Dec 7, 2012
    Under the original wholesale model, companies like Amazon would pay a set amount for books from publishers and were then free to price ebooks however they wanted. Amazon often sold books at a loss or at very small profit margins to edge other sellers out of the market (and to encourage customer loyalty), which in turn forced publishers to continually cut the price on books. Publishers dislike the wholesale model because it encourages consumers to expect lower priced books, a burden that ultimately falls on them.

    Under the agency model, set up by Apple, publishers set the price for books and retailers like Amazon were paid a set amount for every book sold (a 30/70 split, more or less). Because Amazon wasn't buying outright and setting its own prices, this ultimately led to higher e-book prices and more profit for publishers. Apple and six major publishers forced Amazon into an agency model over a wholesale model.

    Another issue surrounding Apple's agreement with the major publishers included a "most favored nation" clause that prevented publishers from selling books at other retailers at a price lower than what was available in the iBookstore. Basically, publishers set book prices higher and no one could sell them lower than what was available in the iBookstore, and according to the DOJ, this resulted in artificially higher prices across the board for consumers. Definitely somewhat of a lose/lose situation -- either customers get higher prices or Amazon kills competition by taking a loss.
  22. macrumors 65816


    Sep 7, 2011
    3 countries for tax benefit

    Apple, with it's billions and billions needs to try and take advantage of writers trying to make a living.


  23. macrumors 68020

    Nov 4, 2008
    If Apple are guilty they should pay, no question. What I don’t like is the way this was done with, (what seemed like), the judges friends involved.
  24. macrumors 68000


    Mar 17, 2010
    Planet Earth
    That's pocket change for Apple.
  25. macrumors 603


    Jul 27, 2009
    Premià de Mar
    Can you link to that ruling saying that Amazon is "an abusive monopolist"?

    And can you explain how fixing the price in all the stores helps competition?

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