Apple Agrees To $450 Million Ebook Antitrust Settlement 91
An anonymous reader writes: Last year, a U.S. District Judge ruled that Apple conspired with publishers to control ebook prices in violation of antitrust laws. Apple launched an appeal which has yet to conclude, but they've now agreed to a settlement. If the appeal verdict goes against Apple, they will be on the hook for $450 million, most of which will go to consumers. If they win the appeal, they'll still have to pay $70 million. $450 million is much more than the other publishers had to pay, but much less than the expected penalty from a damages trial set for August (and still only about one percent of Apple's annual profit).
Fines don't mean anything to them! (Score:4, Insightful)
For a company which makes billions (and has probably made enough profit from this endeavour to justify the fine) fines like this mean nothing. Until people start getting jailed like normal people would do things like this will continue to happen. You can bet your ass if a CEO got 5 years in jail that company wouldn't set a single foot wrong after that for fear of it happening again.
LMAO (Score:1, Insightful)
Yeah, much better to let Amazon to run all the book publishers out of business. :rolleyes:
Cost of doing business (Score:5, Insightful)
The thing I haven't seen addressed (and probably never will) is exactly how much money Apple was able to make from this. My guess is that they benefited far more than 450 million dollars from this. So if that is the case, why would they not do the same thing again since they came out ahead in the long run? You can't make the penalty less than what the company made by breaking the law, as it just becomes a cost of doing business at that point. If they don't get caught they make a boatload of money and if they do get caught they just make less money (but still make money).
Opportunity cost (Score:4, Insightful)
Fine them the same as infringement cases... (Score:3, Insightful)
So what does that come out to?
They sell something like 800 million books a year:
http://www.digitalbookworld.co... [digitalbookworld.com]
Multiple that by 9,000 per infringement:
http://blogs.wsj.com/law/2012/... [wsj.com]
A conservative estimate would have them owing:
7,200,000,000,000
Or if you don't want to count the 0's: 7.2 trillion dollars.
I think they should fork over the 7.2 trillion; that'll teach them a lesson.
Jobs' aggressiveness (Score:4, Insightful)
It appears that one key to Apple's rocketing "success" under Jobs was that he knew he was dying soon and burned bridges left and right in order to grab as much early-mover market-share as possible to gain leveraging power for Apple.
People couldn't blame his bad moves on Apple itself because the dude behind it would be worm-bait when it all came out such that the reputation of the company wouldn't take such a huge hit. He was a voluntary shock-absorber.
We also have the employee "poaching" situation in addition to this Ebook move. I bet more will come out someday.
One has to give Jobs credit for using every weapon at his disposal, including death. His slimebaggery was masterful chess (except maybe for ignoring doctors).
Re:LMAO (Score:5, Insightful)
Yes, the DOJ should totally prosecute the theoretical future anti-trust actions by Amazon, while ignoring the actual increase in prices brought about by market manipulation of Apple. :rolleyes.
Re:Cost of doing business (Score:4, Insightful)
My guess is that they benefited far more than 450 million dollars from this.
The entire eBooks market was only making $3 billion in revenue [digitalbookworld.com] in each of 2012 and 2013. And I think we'll all agree that the market of today is much larger than it was back in 2010, when Apple and the iPad entered the scene with their combination of an Agency Model and Most Favored Nation clauses, which were deemed to be anticompetitive when used together.
Apple's share of the market in 2010 was somewhere between 10% and 20% [the-digital-reader.com], depending on who you believe (most suggest it was 10%, but let's go with 20% for the sake of argument, since it'd mean they'd have made more money). So, if we use 2012's numbers (which, again, will be larger than 2010's actual numbers), their revenue would have only been $600 million at most during that time. I'll admit that I am not an accountant, so I may be misusing these numbers, but as I understand it, their 30% cut for the agency model would be taken out of the $600 million, meaning they'd receive roughly $180 million in a year.
To say the least, you'd have a hard time making the case that the $180 million they made was somehow $450 million or more greater than the amount they'd have made had they not engaged in anticompetitive practices. Though, if I recall correctly, treble damages were being pursued, so that may explain a large chunk of the discrepancy. Even so, it is highly doubtful Apple benefitted by anywhere even in the ballpark of the amount they are being fined.
Re:LMAO (Score:5, Insightful)
Yes, there is a risk that Amazon may be so dominant that it can push up prices, but that is mostly a theoretical risk (smashwords excepted).
So, perhaps an investigation is warranted, but, in no way does that mean the Apple should not be fined for its actions.
Re:Fanbois (Score:5, Insightful)
Sadly for you, the "facts" are on Amazon's side here. Apple was being legally outcompeted, and resorting to illegal collusion needs to be smacked down, regardless of how much they hated seeing their potential marketshare slipping away. Maybe they should have tried to compete by lowering prices further, rather than raising them? Would be a better outcome for consumers.
Re:Fanbois (Score:3, Insightful)
Re:Fanbois (Score:5, Insightful)
the whole point of Apple's ebook efforts was to provide a bulwark against the Amazon Ultron-like eater-of-worlds mopolistic behavior. It was a last ditch effort from apple and the publishers to try and prevent Amazon from eating and owning the entire author and book industry, from writing books to editing them to printing them to selling them.
so your whole argument is that it was okay for apple to commit a crime to thwart amazon from becoming more successful? if amazon ended up breaking laws, so be it, and let them stand accountable at that point.
apple isn't some angel coming down from on high to protect the poor little ebook authors. they were simply trying to thwart a competitor from becoming dominant in the field. they wanted a (larger) piece of the pie, and they broke the law trying to get it.
the irony of course is that Amazon is the one that pushed the DOJ in the first place, and that an "independent" lawyer involved on the plaintiff's side does a lot of work for amazon and even works out of Amazon's building.
i don't think you understand what irony means.
Re:Fanbois (Score:4, Insightful)
Comment removed (Score:5, Insightful)