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Judge Approves $450M Settlement For Apple's Ebook Price Fixing 69

An anonymous reader writes: On Friday a U.S. federal judge approved a settlement in the Apple ebook price-fixing case that could see the technology giant paying $450 million. $400 million of that would go to the roughly 23 million consumers thought to be affected by the price fixing, and the rest would go to lawyers. Though the case is now settled, the dollar amount is not necessarily final — an appeals court still has to rule on a previous verdict. If the appeals court finds in Apple's favor, then the total settlement drops to only $70 million. If they find against Apple, then it's the full amount. "The settlement appeared to reflect fatigue by Apple, the Justice Department, state attorneys general and class-action lawyers eager to conclude a case that has dragged on, largely because of delays by Apple."
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Judge Approves $450M Settlement For Apple's Ebook Price Fixing

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  • by phayes ( 202222 ) on Saturday November 22, 2014 @10:43AM (#48439955) Homepage

    All hail Amazon, the winner by proxy of this fight

    • by I'm New Around Here ( 1154723 ) on Saturday November 22, 2014 @12:51PM (#48440277)

      Sounds like it. Apple and 5 publishers tried to raise the price of new "e-books from the $9.99 price that Amazon had made standard".

      So why does Amazon get to set the price, and not Apple or the publishers?

      • So why does Amazon get to set the price, and not Apple or the publishers?

        There would not have been a problem if Apple had tried to lower the price of ebooks.

        • So why does Amazon get to set the price, and not Apple or the publishers?

          There would not have been a problem if Apple had tried to lower the price of ebooks.

          Actually they did. Ebook prices dropped everywhere but Amazon.

          • Actually they did. Ebook prices dropped everywhere but Amazon.

            Wow. Are you so enamoured with Apple that you have to deny inconvenient facts? From the first paragraph of TFA:

            A federal judge on Friday approved a settlement in which Apple could begin paying $400 million to as many as 23 million consumers related to charges that it violated antitrust law by conspiring with publishers to raise e-book prices and thwart efforts by Amazon.

            See that? It says "raise ebook prices".

            I am constantly amazed by the n

            • Actually they did. Ebook prices dropped everywhere but Amazon.

              See that? It says "raise ebook prices".

              And Snowden is a traitor. Fuck you, and the company that pays you to post here.

          • This is the exact opposite of the truth. Amazon allowed ebooks as low as 99 cents, the itunes price fixing explicitly prevented that from being a possibility.

            • This is the exact opposite of the truth. Amazon allowed ebooks as low as 99 cents, the itunes price fixing explicitly prevented that from being a possibility.

              So there were no more ebooks at Amazon for 99 cents? Prove it or we know you are lying.

              BTW, there are Books on the iBook Store for 99 cents. Obviously Apple only keeps Amazon from selling ebooks cheap. It's fucking magic.

      • by __aaltlg1547 ( 2541114 ) on Saturday November 22, 2014 @01:15PM (#48440345)

        Because setting your own price is legal and colluding with other companies to raise the price isn't.

        • by Anonymous Coward

          Except that's not what happened in this case. Apple said, "You set the price You want; We just take a percentage," as is done in the App Store, is done by traditional publishing companies, and is done anywhere else the agency model is used.

          • by matfud ( 464184 )

            And as it turns out in this case Apple were wrong. Oddly it turns out that they can not just do that. Is that moral or correct in some way? Who knows. But your law sais the did something wrong and owe compensation.

          • Except that's not what happened in this case. Apple said, "You set the price You want; We just take a percentage," as is done in the App Store, is done by traditional publishing companies, and is done anywhere else the agency model is used.

            And coincidently it's the way Amazon's own Kindle Direct Publishing works - just that they took 60% initially before Apple ruined their business model.

      • by Pembers ( 250842 ) on Saturday November 22, 2014 @01:42PM (#48440415) Homepage

        So why does Amazon get to set the price, and not Apple or the publishers?

        Because that's how the sale of every other product to the consumer works - the manufacturer or publisher tells the retailer "we'll sell you a crate of widgets for X dollars apiece" and the retailer is free to sell them to the consumer for whatever they think the consumer is willing to pay. Usually it's some function of X, but it doesn't have to be.

        Agency pricing (so-called because the publisher sets the retail price and the retailer acts as an agent of the publisher, taking a fixed percentage of that as his profit) removes the ability of retailers to compete on price. Apple liked it because they don't want to compete on price anyway. It doesn't matter so much when you're talking about their hardware - plenty of people are willing to pay a premium for an Apple computer or phone or tablet because they perceive them as better or cooler than cheaper products with similar specs from other manufacturers. But if you're talking about ebooks, it's hard to see why you should pay $12.99 or $14.99 for the latest Stephen King or James Patterson from Apple when you could get exactly the same thing for $9.99 or less from Amazon. But if it's the same price at Amazon, you might as well get it from Apple.

        The publishers liked agency pricing because it meant Amazon couldn't price ebooks at a point where it would cut into the publishers' print business. The publishers know that print is going away anyway - they're just trying to prolong it as much as they can because they know that when Barnes & Noble goes bust, there won't be anyone else they can play off against Amazon. They also know that print distribution is the last advantage they have over self-publishing. Self-published ebooks now compete on a level playing field with ebooks from the big publishers, but it's still very difficult for a self-published book to sell a lot of copies in print. (The ones that have managed it were usually picked up by a publisher after doing well as ebooks.) Everything else a publisher can offer an author can be bought from freelancers for a one-off fee, instead of most of the revenue for the life of the copyright.

        Having said all that, the lawsuit was never about agency pricing as such. US competition law cares very little about protecting retailers. What was illegal was that Apple and the publishers colluded to raise prices, thus harming consumers. The fact that they used an unusual method of pricing to do it is neither here nor there, really.

        • by gnupun ( 752725 )

          Agency pricing (so-called because the publisher sets the retail price and the retailer acts as an agent of the publisher, taking a fixed percentage of that as his profit) removes the ability of retailers to compete on price.

          Does it? The retailer can still compete by lowering his profit percentage (30% is ridiculously high anyway and 50% for books over $10 is daylight robbery) of the final sales price. He can also negotiate a lower publisher price based on volume sold (just like traditional retailers). Amazo

          • "The retailer can still compete by lowering his profit percentage"
            No, the agency model implicitly fixed the *retail* price, because the publisher decided both the wholesale price and the retail markup.

      • Sounds like it. Apple and 5 publishers tried to raise the price of new "e-books from the $9.99 price that Amazon had made standard".

        So why does Amazon get to set the price, and not Apple or the publishers?

        This is so simple I'm amazed you got voted up. Fundamental market mechanics is that sellers try to raise the price, buyers try to lower the price. Everything from someone haggling over an item at a flea market to a multi-billion dollar corporate buyout operates this way. Both buyer and seller are a

        • by ihtoit ( 3393327 )

          nothing illegal about running a loss leader - after all, that's what Microsoft did with the XBox. Every console they sold was at a loss. Break even point was about the sixth game purchase at retail, which is why the games were upwards of £60 a pop.

        • Sounds like it. Apple and 5 publishers tried to raise the price of new "e-books from the $9.99 price that Amazon had made standard". So why does Amazon get to set the price, and not Apple or the publishers?

          Apple and the publishers were sellers who tried to raise the price. If they'd arrived at that price individually, then there's no problem. But they colluded to set it at that price, which is absolutely illegal since it breaks this fundamental market mechanic.

          Which price did they arrive at? Oh, yeah, right. You are blowing smoke. There was no fixed price. Let alone that prices fell everywhere but at Amazon which was selling at a loss before.

      • "why does Amazon get to set the price, and not Apple or the publishers?"

        Amazon does not get to set prices through coercive pressure due to its monopsony, the same as how the publishers do not get to set prices through coercive pressure due to collusion. However, this cases was not about Amazon so it cannot be used as a statement on whether or not Amazon can or should uses a monopsony to set market prices.

  • Either way, lawyers won :(

  • Total unadulterated nonsense. Apple comes to an agreement with some publishers to prevent Amazon from lowering prices, (or so the case says and I do not have a tendency to trust anything I hear, but lets assume that is thecase here). People still were buying through Apple but there is no monopoly on books, books can be bought in many formats. Apparently the market gave Apple enough profits as a reward for what they do to allow Apple to play hard, you know what? Amazon could easily raise enough money to fi

    • "without having all the facts" So basically you are talking out of your ass and have no clue what your talking about. Apple committed a serious crime to hurt consumers. In a just world all the Apple executives that signed off on this would be in jail.
  • by PopeRatzo ( 965947 ) on Saturday November 22, 2014 @11:18AM (#48440013) Journal

    $450 million is nothing to Apple. They find that much under the cushions on the sofas in the Apple lounge. They spend more than that every week on KY and poppers.

    • by rknop ( 240417 )

      Indeed, in these kinds of class action lawsuits, there is only one big winner, and that is the lawyers who are litigating it.

      I'm all for class action lawsuits in principle; companies that do things that are bad for soceity should face some sort of consequences for their actions, and people who were inconvenienced or harmed by the actions of companies should have some sort of recompence. In practice, however, usually what happens is that the people nominally benefitting get just a few dollars (probably not

  • Most Americans pay their fair share.
    Couple weasels who hate America think they are so smart, creating and using tax loopholes for their own benefit.

    Not surprise here, seeing Saudis, Russian and American oligarchs vacationing together and sending kids to the same Swiss schools.
    For them USA is just a place to suck money from.

    • If they actually paid their taxes they would have to raise the price of ebooks. Look where that got them.

    • Most Americans pay their fair share. Couple weasels who hate America think they are so smart, creating and using tax loopholes for their own benefit.

      Not surprise here, seeing Saudis, Russian and American oligarchs vacationing together and sending kids to the same Swiss schools. For them USA is just a place to suck money from.

      Errm, apart from the fact that Apple does pay billion in US taxes - you also want rich people around the world to pay US taxes?

      • by ihtoit ( 3393327 )

        Apple avoided paying up to $2.4billion in taxes in 2011 through a complex strategy that funnels money to low tax states and foreign countries such as Ireland and the Netherlands. Through using havens in Asia, Apple have also avoided 1.1Bn Euro tax bill in 2013, and between 2010-2014 they managed to shave an estimated total of $44Bn worth of tax billing worldwide by incorporating offshore.

        Apple Inc are incorporated in Ireland and operate and trade in the USA: they pay NO TAX in either country.
        iTunes funnels

        • Apple Inc are incorporated in Ireland and operate and trade in the USA: they pay NO TAX in either country.

          Liar, liar crotch on fire. Apple paid over 6 billion $ US-taxes in 2012, and 1.5 billion from 2009 to 2012 in Ireland.

  • this equates to a $17 Dollar mail-in rebate, which most people won't bother with (it's only $17), but given previous performances from Microsoft who have been handed down similar class compensation orders, the court will accept this form of payment offered.

    They committed fraud. SOMEONE SHOULD GO TO FUCKING JAIL OVER IT.

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