Print 40 comment(s) - last by retrospooty.. on Jul 12 at 12:06 PM

A trial for damages is soon to come

It's official: Apple lost the e-books battle.

U.S. District Judge Denise Cote in Manhattan ruled today that Apple tried to raise the prices of e-books through an agency model with other book publishers. This ruling came after a non-jury trial, which ended on June 20.

The e-books fiasco started in April 2012, when the U.S. Department of Justice (DOJ) sued Apple and the five book publishers over anticompetitive practices concerning e-book sales. These book publishers were Hachette Livre (Lagardère Publishing France), Harper Collins (News Corp., U.S.A.), Simon & Schuster (CBS Corp., U.S.A.), Penguin (Pearson Group, United Kingdom) and Verlagsgruppe Georg von Holzbrinck (owner of inter alia Macmillan, Germany).
The book publishers were accused of partaking in an agency sales model with Apple, which meant that publishers were allowed to set the price of a book and Apple would take a 30 percent cut. In addition, the publishers could not let rivals sell the same book at a lower price. Traditionally, publishers sell physical books to retailers for about half of the cover price, which is considered a wholesale model. Retailers then had the ability to sell those books to customers for a lower price if they wanted to.

But when e-books came along, this model was challenged. Amazon started selling best sellers for as low as $9.99 to encourage its Kindle e-reader sales. Publishers were not happy. Apple then came along with iBooks, and publishers began to worry that it would take over the book industry the way Apple's iTunes took over the music industry, where customers would choose to purchase cheap, digital books instead of physical books.

However, Apple attempted to resolve this when it struck a deal with publishers to implement the agency model in 2010. This helped Apple at the time of its iPad and iBooks launch. But its deal with publishers made it seem like an attempt to thwart Amazon's dominance.

Back in May, Cote sided with DOJ in a preliminary hearing after an old email from former Apple CEO Steve Jobs was presented as evidence in the e-books case. The email (dated in 2010) from Jobs to James Murdoch of News Corporation said, "Throw in with Apple and see if we can all make a go of this to create a real mainstream e-books market at $12.99 and $14.99.”

Last month, Lawrence Buterman (a DOJ lawyer) said that Apple's move to increase e-book prices hurt consumers by costing them "millions of dollars." 
"Apple told publishers that Apple - and only Apple - could get prices up in their industry," said Buterman. "Overall, average prices of e-books went up, costing consumers millions of dollars."
All of the five book publishers have already settled with the DOJ, and now, Apple has received its answer as well after a trial that began June 3. But a trial for damages is soon to come. 

Source: Reuters

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By Silent157 on 7/10/2013 10:03:40 AM , Rating: 2
Can anyone guess the damages for such a verdict?

RE: Damages
By Brandon Hill on 7/10/2013 10:33:22 AM , Rating: 2
About tree-fiddy.

Seriously though, who didn't see this coming? The presiding judge called it for the DOJ in the prelims

RE: Damages
By Samus on 7/10/2013 3:25:05 PM , Rating: 2
tree-fiddy million does sound about right. They can't really attack them for billions, but perhaps a billion.

We're talking about $3-$5 in consumer damages for every e-book sold (there are over 300 million "downloads" on iBooks but many are likely free downloads.)

They should have settled, because the damages awarded in a trial, as we all know, greatly exceed a settlement if you lose the trial.

RE: Damages
By Motoman on 7/10/2013 10:36:01 AM , Rating: 2
Whatever it is that they come up with, it won't matter. Apple can write a check for billions of dollars and not even care. Which is why companies like them (and Intel comes to mind) don't really care whether they get caught in criminal activities or not. The penalties don't matter.

So unless the bill comes in for *hundreds* of billions of dollars, which would be kind of awesome, Apple isn't going to care, and isn't going to change the way they do "business."

RE: Damages
By wasteoid on 7/10/2013 11:05:35 AM , Rating: 4
Maybe the penalty shouldn't be a dollar value then; one of the executives should face jail time instead.

That would make corporations with the "too much money to care" attitude think twice before flagrantly violating the law.

RE: Damages
By Motoman on 7/10/2013 11:19:38 AM , Rating: 3
Just one of them? Why? There were a *lot* more people than just one who knew that Apple was doing this stuff.

Put everyone who was involved in the planning and execution of this cartel in jail. For years. Might honestly be *hundreds* of Apple employees.

I think we all know that won't happen. What would be nice, and could happen if someone had the will to do it, would just be to make the monetary penalties actually matter to the corporation - like, take them to the brink of bankruptcy so that they have to scramble just to stay alive.

RE: Damages
By Tony Swash on 7/10/13, Rating: -1
RE: Damages
By Spuke on 7/10/2013 2:32:32 PM , Rating: 5
Try to get out into the real world a bit more.
Says the guy that lives in Fantasyland.

RE: Damages
By retrospooty on 7/10/2013 2:46:50 PM , Rating: 3
I think he has lost the ability to make a logical post as well as all sense of self awareness. LOL "Try to get out into the real world a bit more." coming from such a rabid fanboy is beyond hilarious.

RE: Damages
By superstition on 7/11/2013 9:46:31 PM , Rating: 1
Swash's posts about global warming are generally rated 3-5 routinely. I guess his arguments are logical if one is in agreement with his position.

RE: Damages
By retrospooty on 7/12/2013 12:06:30 PM , Rating: 2
More like when the precious Apple is involved he loses all sense of logic and objectivity. I should have added that caveat in.

RE: Damages
By hpglow on 7/10/2013 12:05:27 PM , Rating: 2
I've never been to prison or even really had issues with the law, but I would exchange a couple years of freedom for even a couple mil in profits. I think the penalty has to start getting complicated. Big fine + prison time + community service + paying your competitors advertisement budget sounds good to me. If that isn't enough to deter these companies than we can put responsible people in the stocks in a busy city somewhere and subject them to public ridicule.

Unfortunately US law is designed to protect these people.

RE: Damages
By retrospooty on 7/10/2013 12:07:00 PM , Rating: 2
"I've never been to prison or even really had issues with the law, but I would exchange a couple years of freedom for even a couple mil in profits"

Would you if you were already a multi-millionaire? I wouldn't, no way, not even a consideration.

RE: Damages
By Alexstarfire on 7/10/2013 2:29:02 PM , Rating: 2
I believe he was saying he'd give up a couple million in profit to avoid jail time. Based on that, you seem to be saying that you'd rather go to jail to save a couple of million dollars even though you're already a multi-millionaire.

Can one of you clarify?

RE: Damages
By retrospooty on 7/10/2013 2:44:27 PM , Rating: 2
I thought he was saying he would go to jail for a couple years for a couple million dollars. I was saying If I were already a multimillionaire, I would not go to jail for a couple more million, or any logical amount. Billions? Maybe, but not for a couple million.

RE: Damages
By littlebitstrouds on 7/10/2013 12:35:28 PM , Rating: 2
Because corporations are people right? I'm all for jail time for corporate law breaking.

RE: Damages
By bah12 on 7/10/2013 1:40:57 PM , Rating: 2
That's right if they get to lobby as equal to a person, they should have to bear the flip coin of that and go to prison like one too.

RE: Damages
By weskurtz0081 on 7/10/2013 2:27:04 PM , Rating: 2
There is sound reasoning to the "corporations are people" logic. Tell you what, go start a company only to have something bad happen that is out of your control, and have a lawyer come after you and take not only all the company assets but all of your personal assets.... bet you aren't nearly as likely to take that risk and start a business are you?

I'm not saying it has no flaws, but it serves a very valid purpose.

RE: Damages
By superstition on 7/11/2013 10:08:09 PM , Rating: 2
“Corporation, n. An ingenious device for obtaining individual profit without individual responsibility.”

-- Ambrose Bierce

RE: Damages
By sprockkets on 7/10/2013 11:56:42 PM , Rating: 2
Problem is the guy who should go to jail is in his grave.

RE: Damages
By Fujikoma on 7/10/2013 11:13:33 AM , Rating: 2
I was thinking that they could prohibit paying out to stock holders for so many years AND ban/sanction the company's products from being made/sold for so many days (day = a year of what a person would recieve in punishment).

Doesn't change anything, we're stuck with it.
By Guspaz on 7/10/2013 10:43:08 AM , Rating: 4
Whatever Apple has to pay, they succeeded. The publishers forced Amazon to switch to the agency model, and even though they've all settled the lawsuits, we're stuck with the Agency model. Amazon's eBook prices are still stupid high (often higher than the hardcover) with the label "price was set by the publisher".

RE: Doesn't change anything, we're stuck with it.
By Motoman on 7/10/2013 10:56:13 AM , Rating: 2
You sure about that? I've never bought an eBook - and won't - but I just ran through a bunch of best sellers on Amazon and didn't see that verbiage on any of them.

By Brandon Hill on 7/10/2013 11:01:00 AM , Rating: 2
Look beneath "Sold by", right under the price:

RE: Doesn't change anything, we're stuck with it.
By Motoman on 7/10/2013 11:05:17 AM , Rating: 2
OIC. Missed that.

So this is kind of is it that these publishers could have settled on this issue but still be doing the same thing?

Note that in the example you gave, the eBook is indeed more expensive than the hardcover version. Sheer morony.

By Solandri on 7/10/2013 1:52:02 PM , Rating: 2
Random House wasn't targeted by the FTC in this lawsuit because they were the only major publisher not to go along with Apple's scheme. If they've gone with an agency model with Amazon, it's a separate deal.

An individual publisher and an individual retailer can make whatever deal they want. The problem with what Apple was doing was they tried to get every publisher on board, and they tried to guarantee they (Apple) always had the lowest price.

By bug77 on 7/10/2013 11:36:15 AM , Rating: 2
Luckily for me, I have so many classics to cover, I won't have to buy an ebook for a looong while.

I am...
By blackseed on 7/10/2013 11:29:57 AM , Rating: 2
so happy

RE: I am...
By Tony Swash on 7/10/13, Rating: -1
RE: I am...
By retrospooty on 7/10/2013 1:08:14 PM , Rating: 5
"What a dumb ass legal action. Using anti-trust laws to bust those who broke a monopoly."

Right, Amazon having a monoploy on e-books is bad... While Apple having a monopoly on apps, e-books, music and all other media is good.

Fanboy 101 logic = fail.

RE: I am...
By chris2618 on 7/10/2013 3:38:06 PM , Rating: 2
I think you mean using anti-trust to bust those who where price fixing.

RE: I am...
By sprockkets on 7/10/2013 3:54:46 PM , Rating: 1
Apple will probably win on appeal

Good luck stating why the court will see any reason to grant it.

What a dumb ass legal action. Using anti-trust laws to bust those who broke a monopoly.

Haha, you don't even know what you are talking about.

Here, let's educate you: First look up "oligopoly".

Next, while you are at it, look up "DOJ investigates Amazon and finds no wrongdoing."

RE: I am...
By retrospooty on 7/10/2013 4:27:09 PM , Rating: 4
"Haha, you don't even know what you are talking about."

He does, its just that he isnt here to "talk about" anything. He is here on an agenda to bend facts and distort truths to make Apple appear in a better light - for whatever ridiculous reason... So that that end, he knows exactly what he is saying and doing.

In other words, the problem isnt that he doesnt know what he is talking about, the problem is he is completely full of shit.

Cost vs Value argument
By Lord 666 on 7/10/2013 11:41:04 AM , Rating: 2
Disclaimer: I am a published author on BN, Amazon, and Apple.

Publishers offer a service to the authors and content creators. The higher prices equate to higher royalties to authors/content providers. Apple and Amazon offered higher percentages than BN. Apple by far offered iBook author which is a superior tool.

What Jobs did was a business driven move by increasing costs, it also created value to stockholders while attracting higher quality material.

As a class action suit, what will consumers actually receive? A gift card for $10 to be spent at the Apple iBookstore? Apple can say they are giving away material to celebrate their 5th anniversary to everyone.

RE: Cost vs Value argument
By retrospooty on 7/10/2013 11:47:55 AM , Rating: 2
"What Jobs did was a business driven move by increasing costs, it also created value to stockholders while attracting higher quality material."

BS... What Jobs did was conspire to raise prices to increase value to stockholders... Period. Regardless of the BS claims, conspiring to raise prices is illegal. The MARKET decides prices, not conspiring Executives. If one company is willing to lower them, and you are a competitor, you need to find a way to compete, not perpitrate shady backroom deals to raise prices.

RE: Cost vs Value argument
By Lord 666 on 7/10/2013 11:53:11 AM , Rating: 2
Agreed that it was collusion. No where did I say they were innocent. However, the music business was guilty of this for years, it was only until Apple brought about the iTunes store to change things up.

I guess my point is there are bigger issues with the United States that colluding an extra $2 per ebook when they are already cheaper than physical copies.

RE: Cost vs Value argument
By retrospooty on 7/10/2013 12:04:51 PM , Rating: 2
Agreed the music business is worse and there are many bigger issues in the US, but at least its one small victory. better than a loss.

Effective punishment
By crimson117 on 7/10/2013 11:22:43 AM , Rating: 2
Here's an effective punishment beyond taking pocket change from Apple's bank accounts:

Force Apple to spin off the entire iBooks service and app as a separate company, and prevent Apple from re-entering the e-book market for the next 10 years.

RE: Effective punishment
By lightfoot on 7/11/2013 12:03:18 AM , Rating: 2
That's a start.

Personally, I think all of iTunes (music, media, books and apps) should be spun off as a separate company. Then the devices and services would both be forced to compete based only on their merits and not their anti-competitive "walled garden" product tying.

Tiffany Hearts Apple
By lightfoot on 7/10/2013 11:27:13 PM , Rating: 2
The e-books fiasco started in April 2012, when the U.S. Department of Justice (DOJ) sued Apple and the five book publishers over anticompetitive practices concerning e-book sales.

No, the e-books fiasco started in January 2010, when Apple and five publishers illegally colluded to fix prices in the e-book market. I've never bought an e-book from Apple, but Apple's criminal actions resulted in me paying more for all e-books. Apple broke the law. They started this fiasco. Not the U.S. Department of Justice. Apple. Stop covering for them, it's not your job to defend Apple. That's their lawyer's job. And they failed.

"This is from the It's a science website." -- Rush Limbaugh

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