DOJ Filing Calls Apple “Ringmaster” of E-Book Pricing Rise

[Spooky]

Apple's creation of the iBooks electronic book store and its agency pricing model was not an altruistic attempt to break Amazon's grip on the nascent e-book market, but a conspiracy to eliminate price competition and raise e-book prices.

That's the gist of a new U.S. Department of Justice filing against Apple in the agency's upcoming lawsuit against the company. According to the DOJ, Apple was the "ringmaster" of a plan that raised mainstream e-book pricing well above the $9.99 price point Amazon had established by shifting the industry from a wholesale model, where retailers set prices, to an agency model where publishers set prices. Among the agency's evidence supporting that allegation:

An e-mail from Apple co-founder Steve Jobs to James Murdoch of News Corp. — parent company of HarperCollins — that reads in part, "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."

A comment Jobs made to biographer Walter Isaacson, explaining that Apple "told the publishers, 'We'll go to the agency model, where you set the price, and we get our 30 percent, and yes, the customer pays a little more, but that's what you want anyway.'"

According to the DOJ, those statements are clear evidence of collusion. "Apple knew that the plan it was proposing involved a 'dramatic business change' for publisher defendants," the agency argued in its filing. "Accordingly, Apple kept each publisher defendant aware that it was orchestrating and coordinating a common approach for all of them."

Apple is now the lone holdout in the DOJ's lawsuit, originally brought against the company and five major publishing houses last April. HarperCollins, Hachette, Macmillan, Penguin and Simon & Schuster have all since settled. But Apple, the alleged "ringmaster," continues to dig its heels in.

"Apple did not conspire to fix eBook pricing," Apple spokesman Tom Neumayr said in a statement. "We helped transform the eBook market with the introduction of the iBookstore in 2010 bringing consumers an expanded selection of eBooks and delivering innovative new features. The market has been thriving and innovating since Apple's entry and we look forward to going to trial to defend ourselves."

Below, the DOJ's latest filing:

http://allthingsd.com/20130515/doj-filing-calls-apple-ringmaster-of-e-book-pricing-rise/

[TinkTanker]

The day Apple released the iPad along with the iBookstore, I complained loudly that all Apple was doing was forcing Amazon to raise their prices. While Amazon is the 800 pound gorilla, Apple is the 2400 pound gorilla on crack and steroids.

Darn those pesky emails showing Apple set out to rig the prices of ebooks instead of letting market forces prevail.

[Spooky]

Highlighted DOJ Powerpoint doc: http://www.documentcloud.org/documents/706511-doj-opening-powerpoint.html#document/p1

[TinkTanker]

9:16 AM

A judge has found that Apple violated federal antitrust laws in an eBooks price-fixing case where the company was accused of leading a conspiracy to keep the prices of eBooks artificially high, Reuters reports. U.S. District Judge Denise Cote in Manhattan said that Apple would now face a trial to determine the damages it would pay as a result of violating the law to fix eBook prices. Reuters notes that publishers accused of taking part in the price-fixing conspiracy have already settled with the government out of court.

http://bgr.com/2013/07/10/apple-ebook-antitrust-ruling/

[Eric]

http://youtu.be/2BtYW3eHjRU

[TinkTanker]

http://youtu.be/2BtYW3eHjRU

[Spooky]

http://youtu.be/2BtYW3eHjRU

[Spooky]

http://bgr.com/2013/07/10/apple-ebook-antitrust-ruling/

Apple did not conspire to fix ebook pricing and we will continue to fight against these false true accusations. When we introduced the iBookstore in 2010, we gave customers more choice higher prices, injecting a much needed innovation price increase and competition into the market, breaking Amazon's monopolistic grip policy that ebooks should not be more than $9.99 on the publishing industry. We've done nothing wrong and we will appeal the judge's decision. Even though we shouldn't.

[Spooky]

Apple faces 5-year ban for e-book price rigging conspiracy

Apple should be banned from entering anti-competitive e-book distribution contracts for five years and should end its business ties with five publishers with which it conspired to raise e-book prices, federal and state regulators said on Friday.

The U.S. Department of Justice and 33 U.S. states and territories proposed those sanctions after a federal judge in New York found in a civil antitrust case last month that Apple played a "central role" in a conspiracy with the publishers to raise e-book prices.

Regulators also want Apple to let retailers such as Amazon.com Inc and Barnes & Noble provide links to make it easier for consumers to compare prices.

They also want Apple to use an outside monitor to ensure that its internal antitrust compliance policies are strong enough to catch illegal conduct before consumers are harmed. The proposed changes require the approval of Judge Denise Cote.

"Under the department's proposed order, Apple's illegal conduct will cease, and Apple and its senior executives will be prevented from conspiring to thwart competition," said Bill Baer, head of the Justice Department's antitrust division.

Apple did not immediately respond to requests for comment. It has said it did not conspire to fix e-book prices and that it planned to appeal last month's court decision.

Regulators accused Apple of conspiring to undercut Amazon.com's e-book dominance, causing some prices to rise to $12.99 or $14.99 from the $9.99 that Amazon.com was charging.

They said the alleged collusion had begun in late 2009 and continued into early 2010, as Cupertino, California-based Apple was launching its popular iPad tablet.

The publishers were Hachette Book Group, HarperCollins, Penguin Group (USA), Simon & Schuster and Macmillan.

Only Apple went to trial, while the publishers agreed to pay more than $166 million for the benefit of consumers.

A hearing to discuss remedies is scheduled for Aug. 9. Judge Cote has said she also plans to hold a trial on damages.

http://www.nbcnews.com/business/apple-faces-5-year-ban-e-book-price-rigging-conspiracy-6C10825035

[Spooky]

I'm Rich!!!

Your Credit from the Apple eBooks Antitrust Settlement is ready to use

Dear Kelly Bailey,

You now have a credit of $2.48 in your Amazon account. Apple Inc. (Apple) funded this credit to settle antitrust lawsuits brought by State Attorneys General and Class Plaintiffs about the price of electronic books (eBooks). This new credit is in addition to any previous credit you received from the settlement.
You do not have to do anything to claim your credit. We have already added it to your Amazon account. We will automatically apply your available credit to your next purchase of qualifying items through Amazon.com, an Amazon device, or an Amazon app. The credit applied to your purchase will appear as a gift card in your order summary and in your account history.

In order to spend your credit, please visit the Kindle bookstore or Amazon.com. Your credit is valid for six months and will expire on April 20, 2018, by order of the Court. If you have not used it, we will remind you of your credit before it expires.

If you have any questions about your credit, please visit http://www.amazon.com/applebooksettlement or contact Amazon customer service.

Thank you for being a Kindle customer.

The Amazon Kindle Team


Settlement ID Number:

AMQHKDXN/NyWMkP1VS