Apple to pay $450M fine after US Supreme Court rejects e-book antitrust appeal

Posted:
in iPad edited March 2016
The U.S. Supreme Court on Monday revealed it won't hear Apple's appeal in its iBooks antitrust lawsuit, leaving the iPad maker to pay a $450 million fine to resolve the dispute.

Summation
Apple's closing slide in its e-book antitrust case. | Source: U.S. District Court

The Supreme Court rejected Apple's appeal and won't hear the case, leaving in place the original settlement from 2014, according to Bloomberg. Apple filed its appeal all the way to America's highest court last October, in hopes of having the $450 million settlement overturned.

Per the terms of the 2014 settlement agreement, Apple owes $400 million to e-book consumers, $30 million in legal fees, and the remaining $20 million to states involved in the lawsuit.

In July 2013, U.S. District Judge Denise Cote sided with Justice Department and found that Apple conspired with publishers to artificially inflate e-book prices, based on evidence like emails from former CEO Steve Jobs. Although Amazon's then-standard $10 price tag was allegedly the main target, Apple's tactics forced standard prices up several dollars across the industry.

For the launch of the iBookstore, Apple and book publishers opted to switch to a so-called "agency" pricing model, that allowed publishers to control the prices of books and prevented resellers like Amazon from undercutting those rates. The subsequent increase in e-book prices led the government to take action.

Since then, the agency has switched back to the "wholesale model" preferred by Amazon, which allows resellers to set prices, and sell titles at or below costs if they so choose.
«134

Comments

  • Reply 1 of 71
    jkichlinejkichline Posts: 1,319member
    You didn't expect the government to give up on that amount of money now did you? This verdict is a complete and utter sham in my book.
    SpamSandwichmagman1979AMCjony0lostkiwijustadcomics
  • Reply 2 of 71
    davendaven Posts: 490member
    Honestly I still don't get it. It is ok for Amazon to use their dominant position to drive others out of business but a small reseller can't set up a framework where the price they pay is no higher than the price offered to other resellers?
    AMCjony0dm3stevehbrakkenjustadcomics
  • Reply 3 of 71
    maclvr03maclvr03 Posts: 188member
    As much as I love Apple I remember as soon as iBooks came out all Kindle books that were $9.99 jumped to $12.99 plus. In favor of this ruling. 
    singularitycnocbui
  • Reply 4 of 71
    Did you think that the supreme court was non-political?
    AMCteejay2012steveh
  • Reply 5 of 71
    msanttimsantti Posts: 1,377member
    I been a little agitated with Apple lately but this case is a bunch of nonsense IMO.

    No waay Apple should be paying a dime.
    ksecAMCjony0dm3steveh
  • Reply 6 of 71
    rogifan_newrogifan_new Posts: 3,752member
    Why do I get the feeling this never would have happened were Tim Cook CEO at the time.
    AMC
  • Reply 7 of 71
    msanttimsantti Posts: 1,377member

    Did you think that the supreme court was non-political?
    The liberals there are extremely political.

    As is the Obama DOJ.
  • Reply 8 of 71
    anantksundaramanantksundaram Posts: 18,907member
    sog35 said:
    The amount of jobs and small companies Amazon has ruined is mind blowing.

    Makes me sick that a company like Amazon can undercut the competition by selling goods below cost.
    Amazon stays afloat because they pay most of their executives with stock options instead of cash.  And Wall Street keeps inflating Amazon stock, so they are part of the scam also.

    How is selling goods below cost NOT anti-competitive?  How can other companies compete if Amazon is willing to take losses on every book they sell?
    I couldn't agree more. Pathetic decision.

    I've said this before, and I'll say it again: think that Apple is wasting its time in this business. The payoffs in relation to the costs just don't seem to be worth it.
  • Reply 9 of 71
    gatorguygatorguy Posts: 19,818member
    jkichline said:
    You didn't expect the government to give up on that amount of money now did you? This verdict is a complete and utter sham in my book.
    "The government" isn't reaping the benefits, keeping the money for themselves. Read the ruling. It's right there in the AI article. Less than 5%, $20M, goes to certain US States and none appears to be going to the US Government itself.
    edited March 2016
  • Reply 10 of 71
    latifbplatifbp Posts: 544member
    maclvr03 said:
    As much as I love Apple I remember as soon as iBooks came out all Kindle books that were $9.99 jumped to $12.99 plus. In favor of this ruling. 
    $3? What kind of Frugal Franny are you?
  • Reply 11 of 71
    latifbplatifbp Posts: 544member
    sog35 said:
    The amount of jobs and small companies Amazon has ruined is mind blowing.

    Makes me sick that a company like Amazon can undercut the competition by selling goods below cost.
    Amazon stays afloat because they pay most of their executives with stock options instead of cash.  And Wall Street keeps inflating Amazon stock, so they are part of the scam also.

    How is selling goods below cost NOT anti-competitive?  How can other companies compete if Amazon is willing to take losses on every book they sell?
    Isn't this case different than the Anti-Trust case? I thought there were two separate cases on iBooks going at the same time?
  • Reply 12 of 71
    gatorguygatorguy Posts: 19,818member
    sog35 said:
    Stock is down $5 billion on a $500 million suit. How does that make any sense.

    After taxes this will only cost Apple $300 million, yet the stock is down $5 billion.

    back on topic: Apple needs to seriously spend more on lobbyist and out spend EVERYONE in political contributions. This is not about BRIBING. Apple does not need bribes to be successful. This is about being treated FAIRLY.  Its painfully obviously that Apple has not been treated fairly by the FBI, DOJ, and other government.  If it means spending $1 billion a year on lobbying they should do it.  Its just the price that needs to be paid to get fair treatment by those in power.
    You honestly think any stock price dip today is solely due to SCOTUS not hearing the case??? You profess to be a professional investor, yet sometimes seem clueless about the market. Look at the rest of the tech stocks. 
    singularitycnocbuimagman1979
  • Reply 13 of 71
    icoco3icoco3 Posts: 1,456member
    jkichline said:
    You didn't expect the government to give up on that amount of money now did you? This verdict is a complete and utter sham in my book.
    How much is your book, you price fixer you??!!
  • Reply 14 of 71
    rogifan_newrogifan_new Posts: 3,752member
    gatorguy said:
    sog35 said:
    Stock is down $5 billion on a $500 million suit. How does that make any sense.

    After taxes this will only cost Apple $300 million, yet the stock is down $5 billion.

    back on topic: Apple needs to seriously spend more on lobbyist and out spend EVERYONE in political contributions. This is not about BRIBING. Apple does not need bribes to be successful. This is about being treated FAIRLY.  Its painfully obviously that Apple has not been treated fairly by the FBI, DOJ, and other government.  If it means spending $1 billion a year on lobbying they should do it.  Its just the price that needs to be paid to get fair treatment by those in power.
    You honestly think any stock price dip today is solely due to SCOTUS not hearing the case??? You profess to be a professional investor, yet sometimes seem clueless about the market. Look at the rest of the tech stocks. 
    Amazon, Microsoft and Google are all down more than Apple today. Amazon down almost 3%.
    singularitycrowleyjony0
  • Reply 15 of 71
    jmncljmncl Posts: 42member
    Meanwhile Nook announced it was shutting down today in the UK. Another victim of Amazon's predatory pricing.

    We'll soon see the true cost of devaluing things.
    edited March 2016 latifbpjony0stevehlostkiwi
  • Reply 16 of 71
    This decision came two weeks after Samsung was awarded a victory for copying Apple. So two major decisions against Apple were quickly made after Apple decided to fight creating a back door into iOS. I guess we should look for Koh to decide against Apple soon. Also, we might as well get ready to see all of the patent lawsuits against Apple most likely won by patent trolls. I sense the US government will find ways to make judges comply with making decisions against Apple.
    jony0lostkiwi
  • Reply 17 of 71
    croprcropr Posts: 884member
    sog35 said:
    The amount of jobs and small companies Amazon has ruined is mind blowing.

    Makes me sick that a company like Amazon can undercut the competition by selling goods below cost.
    Amazon stays afloat because they pay most of their executives with stock options instead of cash.  And Wall Street keeps inflating Amazon stock, so they are part of the scam also.

    How is selling goods below cost NOT anti-competitive?  How can other companies compete if Amazon is willing to take losses on every book they sell?
    I don't know for physical goods, but Amazon is not selling an e-book below cost, The production cost for an e-book is a few cents per item.   All other costs are a percentage of the selling price.  So any e-book sold  for $1 or more has a healthy margin. 
  • Reply 18 of 71
    jungmarkjungmark Posts: 6,634member
    Still a sham verdict. I want the Galactic Senate to hear the case! 
  • Reply 19 of 71
    icoco3icoco3 Posts: 1,456member
    This decision came two weeks after Samsung was awarded a victory for copying Apple. So two major decisions against Apple were quickly made after Apple decided to fight creating a back door into iOS. I guess we should look for Koh to decide against Apple soon. Also, we might as well get ready to see all of the patent lawsuits against Apple most likely won by patent trolls. I sense the US government will find ways to make judges comply with making decisions against Apple.
    You didn't hear??  Samsung is preparing a lawsuit against Apple for stealing their plans for future smart phones so Apple could launch a phone in the first place.  This made Samsung look bad and they are suing for defamation, loss of profits, as well as theft of property. /s
    151
  • Reply 20 of 71
    maclvr03maclvr03 Posts: 188member
    sog35 said:

    maclvr03 said:
    As much as I love Apple I remember as soon as iBooks came out all Kindle books that were $9.99 jumped to $12.99 plus. In favor of this ruling. 
    So you are in favor of a company like Amazon selling books below cost to stamp out competition?

    Try to look beyond the $3 you save per book and look at the bigger picture.  Look at how many jobs and companies were destroyed because Amazon sells items below cost.
    If I remember correctly wasn't it Apple demanding the publishers to tell Amazon they must set the price at $12.99 because Apple threatened if they did not then their books wouldn't be available on the iBook store. I could be wrong but that's what I took away from it awhile ago.
Sign In or Register to comment.