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Books The Almighty Buck The Courts Apple

Apple Agrees To $450 Million Ebook Antitrust Settlement 91

Posted by Soulskill
from the throwing-the-ebook-at-them dept.
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).
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Apple Agrees To $450 Million Ebook Antitrust Settlement

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  • by Anonymous Coward on Wednesday July 16, 2014 @04:41PM (#47470111)

    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)

    by Pope (17780) on Wednesday July 16, 2014 @04:41PM (#47470117)

    Yeah, much better to let Amazon to run all the book publishers out of business. :rolleyes:

  • by dirk (87083) <dirk@one.net> on Wednesday July 16, 2014 @04:43PM (#47470131) Homepage

    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)

    by KamikazeSquid (3611985) on Wednesday July 16, 2014 @04:51PM (#47470199)
    You don't have to eliminate all possibility of profit for the fines to be an effective disincentive ... you just have to reduce profit to the point where engaging in different kinds of business or modifying business practices becomes more profitable than the alternative.
  • by Kookus (653170) on Wednesday July 16, 2014 @04:51PM (#47470205) Journal

    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.

  • by Tablizer (95088) on Wednesday July 16, 2014 @04:53PM (#47470231) Homepage Journal

    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)

    by whoever57 (658626) on Wednesday July 16, 2014 @04:54PM (#47470243) Journal

    Yeah, much better to let Amazon to run all the book publishers out of business. :rolleyes:

    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.

  • by Anubis IV (1279820) on Wednesday July 16, 2014 @05:35PM (#47470569)

    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)

    by whoever57 (658626) on Wednesday July 16, 2014 @07:29PM (#47471371) Journal
    With the exception of the smashwords issue, all of those articles relate to Amazon fighting with publishers. Not one of those articles alleges (apart from the smashwords issue) that Amazon is forcing up the prices at other retailers.What does Wallmart do every day: negotiate with suppliers to get the best deal for itself. What is Amazon doing here?

    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)

    by Namarrgon (105036) on Wednesday July 16, 2014 @08:08PM (#47471567) Homepage

    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)

    by Noah Haders (3621429) on Wednesday July 16, 2014 @08:32PM (#47471687)
    the difference is Amazon is dumping ebooks on the market at a price that is impossible to compete. 100% guaranteed they will sell books for 99 cents until all other parties are dead, then jack up the price while freezing the publishers out. This is how monopolies operate.
  • Re:Fanbois (Score:5, Insightful)

    by farble1670 (803356) on Wednesday July 16, 2014 @09:07PM (#47471847)

    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)

    by Noah Haders (3621429) on Wednesday July 16, 2014 @09:49PM (#47472035)
    not too much perhaps. how hard is it to write a book, how hard is it to edit a book, how hard is it to curate the book industry so the most promising books recieve support and funding, how hard is it to build an industry that supports authors so they can live and work and be professionals, so the entire publishing industry doesnt devolve into 99 cent fan fic? pretty darn hard.
  • Re:Fanbois (Score:5, Insightful)

    by hairyfeet (841228) <bassbeast1968&gmail,com> on Thursday July 17, 2014 @09:42AM (#47474255) Journal

    Uhhh..spin it how you want but the emails showed beyond a doubt that Apple was price fixing and sorry, that is illegal. Also if you think Apple was price fixing "for good of the people"....BWA HA HA HA HA, that is damned funny, it was to increase their share and make sure no competitor could undercut them, again going against free market competition.

    Of course they could always do like Amazon and take less profit per sale...ha ha ha, who am I kidding, Apple take less? never!

If a thing's worth having, it's worth cheating for. -- W.C. Fields

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