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

[rh1]

They deserve the fine.

They probably do.
Just a prediction, mid range iPhone will be price bumped to cover lawsuit losses. Like they did with the iPhone 5, they started at £529 instead of £499 for an SIM-Free Unlocked model.

Wouldn't surprise me if the so called mid range iPhone started at £429 Unlocked. Or for the US, no more $0 iPhone's with a contract. Soon starts at $49 or $199.

 

[mj1108]

enjoy being at Amazon's mercy!

....or at Apple's mercy and paying more for e-books?

 

[solipsism]

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?

1) So the term "dumping" in anti-trust law means nothing to you?

2) Most Favored Nation is not illegal: https://en.wikipedia.org/wiki/Most_favoured_nation

3) Apple was not accused for using MFN, they were accused of colluding, which they were found guilty of despite there being absolutely no evidence to support it. No offense to Australians, but it was a kangaroo court.

 

[pirg]

Does not compute

Everything is about money, especially with these corps.

What I mean is it's not the money that's going to stop these companies, the money is just collateral damage. Both apple and Samsung were caught. Apple fixing prices and Samsung stealing.

Posting a fine is chump change, and is not going to affect them in the least.

I'm not arguing as some here do that Google is here for harmony and peace. Of course all corps exist solely to make money.

 

[thekev]

500 mil? really?

I wouldn't view that number as realistic. You might remember the last time Google was fined. The initial article threw out a big number. It's click bait.

 

[cambox]

Sounds like another APPLE CRUMBLE!

 

[solipsism]

What I mean is it's not the money that's going to stop these companies, the money is just collateral damage. Both apple and Samsung were caught. Apple fixing prices and Samsung stealing.

Posting a fine is chump change, and is not going to affect them in the least.

I'm not arguing as some here do that Google is here for harmony and peace. Of course all corps exist solely to make money.

I think what you're trying to say is that it was a calculated risk.

Perhaps Apple did collude and conspire, despite no evidence showing they did, but with Amazon's seemingly illegal monopolistic dumping tactics they wouldn't have been able to compete unless they also sold books at a loss. This isn't good for anyone. It devalues the books, the publishers, and when Amazon feels they have completely won they could then change the prices to be much higher (like they did the day Apple lost this round).

Apple now has a hold of the eBook market with quality digital copies that made Amazon go redo many titles that had spelling errors, formatting errors, etc., as well as getting Amazon to make their Kindle apps better. We also have publishers that don't see eBooks as a dead end with Amazon making them an inferior product with a demising value.

 

[olowott]

Yawn!! doesnt even put a dent

 

[pirg]

I think what you're trying to say is that it was a calculated risk.

Perhaps Apple did collude and conspire, despite no evidence showing they did, but with Amazon's seemingly illegal monopolistic dumping tactics they wouldn't have been able to compete unless they also sold books at a loss. This isn't good for anyone. It devalues the books, the publishers, and when Amazon feels they have completely won they could then change the prices to be much higher (like they did the day Apple lost this round).

Apple now has a hold of the eBook market with quality digital copies that made Amazon go redo many titles that had spelling errors, formatting errors, etc., as well as getting Amazon to make their Kindle apps better. We also have publishers that don't see eBooks as a dead end with Amazon making them an inferior product with a demising value.

It was a risk and it backfired yes. Don't get me started on Amazon either because I agree with you there.

My original point was that even though that risk backfired and now they may owe some money the fine is inconsequential. What hurts apple is just being found guilty. They make that money in five days.

Same with Samsung, they can afford a fine but everyone (except the "jury was biased" tin foil crowd) see that they're thieves.

 

[jfx94]

I wonder if I'll see any of that, since I paid for several iBooks when the original iPad was released.

On second thought, probably not. Most of that money will probably go to legal fees and court costs and lawyers. The couple dollars I might have ended up with will probably be used to create the program that figured out how much they owed everyone.

Even if they did give me the money, I'd probably spend it back in one of Apple's stores (iTunes, iBook, App). That's kind of ironic; once your used to their ecosystem, it would take a lot of effort to get out.

 

[FirstNTenderbit]

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.

CAN be. Yep. In this instance was it? NOPE! I wasn't addressing theory. I was responding directly to your query regarding Apple's legal team not using it as a part of their case. They didn't do it because Amazon did nothing illegal. That was my answer to your question.

I have a question for you regarding the portion of your comment I bolded. I've seen that statement made by a lot of people. In your opinion what would Amazon gain if they did exactly what you said? Genuinely curious.

 

[solipsism]

It was a risk and it backfired yes. Don't get me started on Amazon either because I agree with you there.

My original point was that even though that risk backfired and now they may owe some money the fine is inconsequential. What hurts apple is just being found guilty. They make that money in five days.

Same with Samsung, they can afford a fine but everyone (except the "jury was biased" tin foil crowd) see that they're thieves.

If they would have had no chance for an eBook store against Amazon's previously described tactics and now they have an established one it makes it worthwhile if, over the entire lifetime of them selling eBooks, make a profit that exceeds whatever fine they're impose. I'd hope even the anti-Apple people can understand such basic maths.

 

[pirg]

If they would have had no chance for an eBook store against Amazon's previously described tactics and now they have an established one it makes it worthwhile if, over the entire lifetime of them selling eBooks, make a profit that exceeds whatever fine they impose. I'd hope even the anti-Apple people can understand such basic maths.

This is true...and most probably they will do just that, eat the fine and make it up tenfold over their lifetime.

It wasn't the smartest and obviously not a legal strategy but it'll probably benefit them, even if it wasn't right.

 

[theelysium]

This is BS. They did not inflate prices.

Here is my Spin

What we have here is government abuse. The government is mad that Apple will not move their cash from over seas banks to our banks.

The Gov wants Apple to move money so they can unfairly over tax the S H I T out of it. Since Apple will not move their money the Gov has concocted this BS to get the money they think they deserve from Apple.

Does that sound about right?

 

[Technarchy]

Tim Cook: "will you guys take a personal check?"

 

[MrCornfed]

.

 

[BaldiMac]

I find this calculation a bit odd. Apple is liable for everything that the publishers didn't settle for? That implies that Apple would have no liability if the publishers were all found guilty.

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?

Judge Cote's decision:
"If Apple is suggesting that an adverse ruling necessarily implies that agency agreements, pricing tiers with caps, MFN clauses, or simultaneous negotiations with suppliers are improper, it is wrong. As explained above, the Plaintiffs have not argued and this Court has not found that any of these or other such components of Apple’s entry into the market were wrongful, either alone or in combination."

Agency pricing, pricing caps, MFN clauses, and simultaneous negotiations were not found to be wrongful alone or in combination. Despite all the claims in these forums that they showed obvious guilt.

 

[tdtran1025]

Kudos to FTC! Bring down the prices of ebooks for K-12 and undergraduate, as The President outlined in his speech yesterday of how important education is for the future of America, which affects the global economy.

 

[foobarbaz]

That formula doesn't make any sense to me.

Why does the amount the publishers settled for affect the damages Apple would pay?

If the publishers negotiated differently and settled for less, then Apple would have to make up the difference in their payment?

 

[BillyBobBongo]

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

$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.

$500 million? Drop in the bucket.

How incredibly vulgar you all are.

Perhaps you can explain to me why you think that Apple is the righteous one in all of this, rather than be annoyed for being ripped off? Instead you find comedy in such grotesque sums of money by assuming them to be a pittance?

 

[bitsoda]

If you make an annual $35,000 salary, this is like paying a $116 fine. Not a huge deal, but it definitely stings.

 

[appleisking]

How incredibly vulgar you all are.

Perhaps you can explain to me why you think that Apple is the righteous one in all of this, rather than be annoyed for being ripped off? Instead you find comedy in such grotesque sums of money by assuming them to be a pittance?

rofl wow. I couldn't care less about any of this. Not a stockholder, don't own anything in Apple Inc. to me this is like watching a movie with popcorn. It's all amusing. Apple will be just fine don't you worry.

 

[chrisbru]

CAN be. Yep. In this instance was it? NOPE! I wasn't addressing theory. I was responding directly to your query regarding Apple's legal team not using it as a part of their case. They didn't do it because Amazon did nothing illegal. That was my answer to your question.

I actually didn't state that they should have used it as a defense, someone else did. I was just explaining that it IS possible for predatory pricing to be technically illegal, it just usually isn't.

I have a question for you regarding the portion of your comment I bolded. I've seen that statement made by a lot of people. In your opinion what would Amazon gain if they did exactly what you said? Genuinely curious.

If there was a big demand for ebooks, then the benefit would be taking a loss on them for a short period of time until all other players in the market completely disappeared. When they had a monopoly on ebooks, they could push the prices up as high as they want (to a point where people would still buy them of course) and keep all of the profit for themselves.

For example, gas station chains tried to do this a while back. They'd sell gas at crazy discounts so that the smaller competitors couldn't get any business and they'd close up shop. Once the competition was gone, they were free to charge ridiculous prices for gas because it is something people rely on and thus must buy even at inflated prices.

E books probably wouldn't ever see this happen though, to be completely honest. It's not a necessity like gas.

 

[BaldiMac]

If there was a big demand for ebooks, then the benefit would be taking a loss on them for a short period of time until all other players in the market completely disappeared. When they had a monopoly on ebooks, they could push the prices up as high as they want (to a point where people would still buy them of course) and keep all of the profit for themselves.

For example, gas station chains tried to do this a while back. They'd sell gas at crazy discounts so that the smaller competitors couldn't get any business and they'd close up shop. Once the competition was gone, they were free to charge ridiculous prices for gas because it is something people rely on and thus must buy even at inflated prices.

E books probably wouldn't ever see this happen though, to be completely honest. It's not a necessity like gas.

I don't think that Amazon's long term goal is to raise prices. If anything, they would use their eventual monopsony power to pound the publishers into lower wholesale prices.

Ultimately, I think it's all about creating more customer accounts and transactions by driving competitors out of business in different markets. It's a strategy that isn't even considered by current predatory pricing laws as far as I can tell. But it's just as destructive, in my opinion.

 

[pezareawesome]

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

I know, right? Those poor rich folks always getting taken advantage of by those disgusting money-grubbing poor people.

It's amazing how a company can raise prices taking more money from the customer, and the customer complains when the company is caught.