Apple Could Owe $500 Million After Being Found Guilty in E-Book Antitrust Case

[MacRumors]

After being found guilty in federal court of conspiring to artificially inflate e-book prices, legal experts are estimating that Apple could owe as much as $500 million in damages.

GigaOm has shared a chart provided to the federal judge in the case by the Texas attorney general. It shows how much in damages the five publishers have been found liable and how much they have paid in settlements. The remainder -- after damages have been trebled for willful violations -- works out to roughly $500 million.

The chart shows that the publishers have paid out over $166 million so far. Earlier this month, a lawyer from Hagens Berman -- the class action firm in the case -- told my colleague Jeff Roberts that Apple would likely face a liability payment of harm to consumers times three, minus the $166 million already paid out by publishers. On Wednesday, Law360 reported (paywall) the same thing, calculating that if Apple loses its appeal it would face about $490 million in damages. I annotated the chart above with those figures.

Apple has indicated that it will appeal the guilty ruling and it's likely that it will be many months or even years before the case is resolved.

Article Link: Apple Could Owe $500 Million After Being Found Guilty in E-Book Antitrust Case

 

[pirg]

No sweat, they'll use the 600 million Samsung owes them for stealing

 

[appleisking]

500 mil, I'm sure Apple's shaking in their gold boots

 

[Lazy]

What I don't get is why in the original case part of their defense didn't include pointing out the Amazon was illegally selling ebooks below cost as an anti-competitive move, and that their model put a stop to that, which is why prices went up.

 

[CrazyForApple]

Tim Cook craps that much out everyday after dinner

 

[ka-spot]

500 mil? really?

 

[A Hebrew]

They deserve the fine.

 

[scbn]

This sounds like 'rob the rich' since they have the money...

 

[distemp]

This sounds like 'rob the rich' since they have the money...

Nah. Apple was really trying to scam us all into paying higher prices. It wasn't an accident that ebook prices went from a generally standard $10 to whatever the hell the publishers wanted when the iPad came around.

 

[cmwade77]

What I don't get is why in the original case part of their defense didn't include pointing out the Amazon was illegally selling ebooks below cost as an anti-competitive move, and that their model put a stop to that, which is why prices went up.

Actually, it is not illegal to sell books below cost. It may or may not be a smart business move, but it's not illegal.

What is illegal however is selling something (in this case books) at a set price and telling the manufacturer (in this case the publishers) that they can't let anyone else sell it for a lower price. This is what Apple was doing and why they should definitely be considered guilty.

Many gas stations tried something similar about 10 years ago and were fined for it. Retailers have tried this before and didn't get away with it. Why should Apple be let off the hook?

 

[Mad Mac Maniac]

$500M is nothing to sneeze at... even for Apple. Plus, who does this money go to? The US Government? These kinds of laws/rulings are so self-serving its ridiculous....

 

[gotluck]

Lol at these responses.. Samsung will probably scoff at whatever amount they end up having to pay Apple too . We'll see how everyone feels then..

 

[jm001]

$500 mil? That comes out of their petty cash probably. I can see Tim now as he searches through the couches at HQ for change.

 

[rpe33]

$500 million? Drop in the bucket.

 

[Diode]

Actually, it is not illegal to sell books below cost. It may or may not be a smart business move, but it's not illegal.

What is illegal however is selling something (in this case books) at a set price and telling the manufacturer (in this case the publishers) that they can't let anyone else sell it for a lower price. This is what Apple was doing and why they should definitely be considered guilty.

Many gas stations tried something similar about 10 years ago and were fined for it. Retailers have tried this before and didn't get away with it. Why should Apple be let off the hook?

Apple wasn't setting the price though. The publishers were. The publishers could have just as easily lowered their price to match Amazon's but chose to force Amazon into an agency model so they could match the price to what they were selling through the App store.

 

[pirg]

Lol at these responses.. Samsung will probably scoff at whatever amount they end up having to pay Apple too . We'll see how everyone feels then..

Who cares? Neither company is going to be hurt by it. This stuff is not about the money

 

[Dontazemebro]

What, Apple over-inflating prices?

Can't be true.

 

[benspratling]

What is illegal however is selling something (in this case books) at a set price and telling the manufacturer (in this case the publishers) that they can't let anyone else sell it for a lower price. This is what Apple was doing and why they should definitely be considered guilty.

Hey can you provide a citation for that in Apple's contracts (maybe I missed it?)

 

[jonnysods]

Where does this money go?

 

[inlinevolvo]

What I don't get is why in the original case part of their defense didn't include pointing out the Amazon was illegally selling ebooks below cost as an anti-competitive move, and that their model put a stop to that, which is why prices went up.

No such law exists. It's called the free market (for the most part, it is free).

----------

Where does this money go?

To consumes who overpaid for the books.

 

[gotluck]

Who cares? Neither company is going to be hurt by it. This stuff is not about the money

Does not compute

Everything is about money, especially with these corps.

 

[FirstNTenderbit]

What I don't get is why in the original case part of their defense didn't include pointing out the Amazon was illegally selling ebooks below cost as an anti-competitive move, and that their model put a stop to that, which is why prices went up.

It's pretty simple. You can't base your defense on a fallacy. Selling something below cost isn't illegal. It's called a loss leader. Retailers do it to get you in their doors (virtual or physical) with the hopes that you will buy more profitable things.

 

[rossor]

Going to the Supreme Court

This case protected Amazon's monopoly, the exact opposite of what anti-trust law is supposed to accomplish. It's clear Amazon has been raising prices lately (beginning with eliminating discounts - see the New York Times piece from early July). So until this one is heard by the Supreme Court at some distant point in the future, enjoy being at Amazon's mercy!

 

[chrisbru]

It's pretty simple. You can't base your defense on a fallacy. Selling something below cost isn't illegal. It's called a loss leader. Retailers do it to get you in their doors (virtual or physical) with the hopes that you will buy more profitable things.

Mostly true. It CAN be illegal, but only if a company is doing it specifically to drive a smaller competitor out of business. However, that is because the predatory pricing is evidence of antitrust violations, and typically is a VERY high hurdle to clear because predatory pricing at least temporarily benefits consumers, and new market entrants make it impossible for a business to price predatorily, drive competition out completely, and then jack prices back up to higher-than-before levels.

 

[Lazy]

Mostly true. It CAN be illegal, but only if a company is doing it specifically to drive a smaller competitor out of business. However, that is because the predatory pricing is evidence of antitrust violations, and typically is a VERY high hurdle to clear because predatory pricing at least temporarily benefits consumers, and new market entrants make it impossible for a business to price predatorily, drive competition out completely, and then jack prices back up to higher-than-before levels.

What he said.