The final chapter in Apple's e-book price-fixing saga is over
It’s been years in the making, but the final chapter has finally closed on the antitrust suit against Apple. According to Bloomberg, the United States Supreme Court has refused to hear Cupertino’s appeal of a court’s finding that Apple orchestrated a scheme to raise e-book prices. That refusal leaves Apple on the hook for its $450 million settlement.
What happened?
It seems that e-books should be cheaper than hard copies, due to the lower production costs. However, since these publishers have switched to an agency model, many e-books cost more than their printed counterparts.
- AppAdviceIn case you weren’t around or otherwise missed it, this whole case stems from discussions that Apple reportedly had with publishers in the months leading up to the launch of the first iPad in 2010 and the iBookstore feature. The states alleged that Apple, seeking to gain a foothold in an e-book market dominated by Amazon, persuaded five of the biggest publishers in the business to shift to a system under which they, not the retailers, would set e-book prices.
A settlement, but then challenges to that deal
Even so, the settlement states if a higher court reverses the ruling from the New York judge, Apple might just have to pay $70 million, or possibly even nothing at all.
- AppAdviceIn July 2014, Apple conditionally agreed to pay $450 million in damages, and the court also assigned a monitor to keep tabs on Cupertino’s business. Apple wasn’t done, though, since the agreement was contingent on higher courts upholding the ruling from the New York judge. Cupertino quickly filed its appeals, even asking for the monitor to be removed. The monitor was ultimately removed in 2015, after the Justice Department found that it was finally satisfied with Apple’s measures to guard against further anticompetitive behavior.
So who gets the money?
According to the terms of the settlement agreement, the majority of the $450 million will go to e-book consumers. In fact, Cupertino is expected to pay out $400 million to said consumers and $20 million to the more than 30 states involved. The final $30 million will go towards court costs and other legal fees.
Finally, the end of the era
It’s good to see this final chapter closing. Apple might not like the outcome, but it’s clear that Cupertino led the book publishers into taking actions that resulted in e-book prices skyrocketing. The days of getting best sellers at much cheaper prices for their electronic versions are all but over, and it definitely seems like Apple’s collusion with the book publishers had quite a bit to do with that.
