Apple's ebook price-fixing court battle spills into Canada

Posted:
in General Discussion edited January 2014
A Canadian class-action lawsuit alleging that Apple and its partner ebook publishers colluded to artificially inflate the price of content offered through the iBookstore was given the go ahead to launch on Friday.

According to Normand Painchaud, the lawyer who first filed the suit in Quebec Superior Court in February, Canadians who purchased an ebook from Apple within the past two years could be partially recompensed if the Cupertino, Calif., company is found guilty of price fixing, reports The Montreal Gazette.

The lawsuit, which is identical to the antitrust suit initiated by the U.S. Department of Justice as well as a corresponding investigation by the European Commission, claims that Apple and five large publishing houses illegally worked together to raise ebook pricing.

?Prices have definitely gone up,? Painchaud said. ?So consumers could be eligible for damages.?

Painchaud went on to say that his lawsuit is the first of three to move forward in Canada, with the other two requests waiting for approval in British Columbia and Ontario. The lawyer notes that if any of the suits are successful, damages would most likely be distributed to all Canadian ebook owners who made purchases on or after Apr. 1, 2010.

At issue is Apple's so-called "agency model" which allows publishers to set ebook pricing under a "most favored nations" clause that contractually obliges the companies to not sell the same content through another reseller at a cheaper price. The "agency model" is far more attractive to publishing houses than the "wholesale model" previously used by Amazon to offer below-cost pricing in order to draw customers.

iBooks


The Quebec class-action suit was filed under the name Antoine Pontbriand and reads:
The anti-competitive nature of this conspiracy, and the Publisher Respondents? motivation to control ebook pricing, is also revealed by the fact that the price of an ebook in many cases now approaches ? or even exceeds ? the price of the same book in paper even though there are almost no incremental costs to produce each additional ebook unit.
The publishing houses HarperCollins, Simon & Schuster, Hachette, Macmillan and Penguin are the publishers named alongside Apple in the allegations.
Painchaud warned that the lawsuit could take years to resolve, however HarperCollins, Simon & Schuster and Hachette have already settled out of court in the U.S. which may a sign of willingness to do the same in Canada. Now that the three publishers have settled, they will most likely resume dealings with Amazon based on the "wholesale model."

Apple denies any wrongdoing and is seeking to fight the allegation in U.S. federal court. The company has made no official statement regarding the new Canadian suit.
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Comments

  • Reply 1 of 51
    tylerk36tylerk36 Posts: 1,037member




    I can't help but wonder if some one is behind this.  Such as the giant amazon.  Lobbying (paying off politicians) to go after Apple.


     




     

  • Reply 2 of 51
    hill60hill60 Posts: 6,992member
    I don't see how being accused of something in one country would lead to any finding of liability in another.

    This should be thrown out rather quickly.
  • Reply 3 of 51
    sipsip Posts: 210member


    The fun will really begin if the DoJ case against Apple collapses, given that more than half the US states (and now Canada) have jumped on to the bandwagon.


     


    If the DoJ loses, how will the courts in the other cases justify decisions against Apple?


     


    PS: Like the new look.

  • Reply 4 of 51


     


    Quote:

    Originally Posted by sip View Post


    The fun will really begin if the DoJ case against Apple collapses, given that more than half the US states (and now Canada) have jumped on to the bandwagon.


     


    If the DoJ loses, how will the courts in the other cases justify decisions against Apple?


     


    PS: Like the new look.



     


     


    You are missing a key difference m8y. 


     


    The case in Canada is a civl suite, and the one in the USA is the state against Apple; I'm not saying the case has any legs, however you cannot jump the gun and call a lawsuit off so easily in a totally different country with completely different laws that do not conform to kissing the ass of big business.

  • Reply 5 of 51


     


    Quote:

    Originally Posted by hill60 View Post



    I don't see how being accused of something in one country would lead to any finding of liability in another.



    This should be thrown out rather quickly.


     


    Not if the  laws are similar.

  • Reply 6 of 51
    genovellegenovelle Posts: 978member


    I still fail to see how a company can be accused of collusion in this case.  This is a new market that they are still trying to develop.  The companies involved determine how they will sell their product.  You would have to say they colluded when they decided to sell the books to Amazon under similar terms. You would  also have to say the record and movie companies colluded with Apple and other stores, because they raised the price from free when the digital files were being stolen by online thieves.  Changing models does not mean price fixing, most markets have minimum advertised prices, there is nothing wrong with Amazon saying for every ebook you buy we will give you a free toaster, the difference is they should not be able to undercut the market and give away someone else's product to destroy the market.  It leaves no competitors and decreases the availability of the product, which means lower sales for the entire market.  

  • Reply 7 of 51
    jragostajragosta Posts: 10,473member


     


    Quote:

    Originally Posted by genovelle View Post


    I still fail to see how a company can be accused of collusion in this case.   



     


    It's really very simple. It comes down to what was discussed at the meetings between Apple and the publishers.




    If Apple acted as a middleman and brought the publishers together for the purpose of collusion and participated in the discussions, then they could be found guilty. If Apple was not involved in any price-fixing discussions, they should not.



    Ultimately, it comes down to whether there's evidence of Apple participating in illegal activities or not. So far, I haven't seen anything that's all that convincing, but it's unlikely that all the relevant evidence has been made public.

  • Reply 8 of 51


    Apple has offered to settle similar lawsuits in Europe.


     


     


    Apple Offers E-Book Settlement: But Only in Europe


     


    http://www.forbes.com/sites/timworstall/2012/04/21/apple-offers-e-book-settlement-but-only-in-europe/

  • Reply 9 of 51
    rbelsrbels Posts: 29member


     


    Quote:

    Originally Posted by tylerk36 View Post


    I can't help but wonder if some one is behind this.  Such as the giant amazon.  Lobbying (paying off politicians) to go after Apple.



     


    Something similar to how BB enterprise users were teased of not using a phone with access to hundreds of thousands of apps (including the productive apps from Zynga, FB, Instagram etc?). Who was behind this negative publicity?


    Let us keep the corporate wars aside and look at how much we are made to shell out for someone to make billions in the name of innovation. Each additional Dollar we spend (lose?) is a loss to some other business that could have helped it stay afloat.


    btw, you are comparing someone on penny business and making quarterly profit in Millions, vs someone earning in tens of billions. The muscle power is not sanely comparable.

  • Reply 10 of 51
    jragostajragosta Posts: 10,473member


     


    Quote:

    Originally Posted by I am a Zither Zather Zuzz View Post


    Apple has offered to settle similar lawsuits in Europe.


     


     


    Apple Offers E-Book Settlement: But Only in Europe


     


    http://www.forbes.com/sites/timworstall/2012/04/21/apple-offers-e-book-settlement-but-only-in-europe/



     


    The author should not be allowed to write articles about subjects that are clearly beyond his intellectual ability. His first paragraph says:

    "Apple is offering to settle the e-book case in Europe even as it protests its innocence in the US. Which is a little odd, to simultaneously give in and fight the same accusations at the same time:"


     


    I guess it never occurred to him that perhaps the laws are different in Europe than in the U.S. Clearly Apple felt that they did not violate the U.S. laws but that there was a greater chance that they'd lose in Europe.

  • Reply 11 of 51
    charlitunacharlituna Posts: 7,215member


     


    Quote:

    Originally Posted by jragosta View Post


     


     


    It's really very simple. It comes down to what was discussed at the meetings between Apple and the publishers.




    If Apple acted as a middleman and brought the publishers together for the purpose of collusion and participated in the discussions, then they could be found guilty. If Apple was not involved in any price-fixing discussions, they should not.



    Ultimately, it comes down to whether there's evidence of Apple participating in illegal activities or not. So far, I haven't seen anything that's all that convincing, but it's unlikely that all the relevant evidence has been made public.



     


    Exactly. The DOJ has been leaking out emails between the publishers but if they had proof that Apple did anything other than use the same terms they used for every other kind of media they haven't leaked it. And you would think they would have by now. That lack of proof is why I think Apple won't settle. They know they weren't part of any collusion in any kind of direct way AND they likely want to defend their right to use the terms they want in their own store. Sure they might have to give up the favored nation clause but they will deal with that. So long as the publishers can't be forced to do business on ebooks with groups that offer terms they don't like losing that clause won't really matter. Because the publishers can tell Amazon to take their wholesale model and shove it. And then they will just be on Apple for ebooks and have the pricing they want etc. I'm fairly sure there's no law the DOJ can use to force the publishers to do business with someone at terms they don't like. 


     


    The question I have for the DOJ is where have they been for the  years that Amazon had their monopoly and the question of wrongdoing involving it and other Amazon practices was ignored. Why do they only seem to care now that Apple is in the mix. 

  • Reply 12 of 51
    adamcadamc Posts: 576member


    I hope when those law suits against Apple are dismissed or found not guilty Apple will and should be compensated.


     


    When this happened those who brought such suits against Apple will think twice before doing so.

  • Reply 13 of 51


     


    Why should anyone mind that Apple's business intentions caused prices for generic products to go up?  I don't think anyone should mind that the prices at Amazon went up as a result of the change in business model, as long as it helps our beloved Apple compete.


     


     

  • Reply 14 of 51
    jragostajragosta Posts: 10,473member


     


    Quote:

    Originally Posted by entification View Post


     


    Why should anyone mind that Apple's business intentions caused prices for generic products to go up?  I don't think anyone should mind that the prices at Amazon went up as a result of the change in business model, as long as it helps our beloved Apple compete.


     


     



     


    Funny how the Apple haters seem to be incapable of sticking to legal realities and rather drift off into their delusional fantasies.

  • Reply 15 of 51
    herbapouherbapou Posts: 2,222member


    There is nothing wrong with the agency model on the Apple side. The problem is Apple put out a rule that publishers could not offer there books somewhere else at a lower cost,this is where Apple will get caught.

  • Reply 16 of 51


     


    Quote:

    Originally Posted by jragosta View Post


     


    Quote:

    Originally Posted by I am a Zither Zather Zuzz View Post


    Apple has offered to settle similar lawsuits in Europe.


     


     


    Apple Offers E-Book Settlement: But Only in Europe


     


    http://www.forbes.com/sites/timworstall/2012/04/21/apple-offers-e-book-settlement-but-only-in-europe/



     


    The author should not be allowed to write articles about subjects that are clearly beyond his intellectual ability. His first paragraph says:

    "Apple is offering to settle the e-book case in Europe even as it protests its innocence in the US. Which is a little odd, to simultaneously give in and fight the same accusations at the same time:"


     


    I guess it never occurred to him that perhaps the laws are different in Europe than in the U.S. Clearly Apple felt that they did not violate the U.S. laws but that there was a greater chance that they'd lose in Europe.



     


    My guess is that he may have thought about it, given that it is fairly straightforward proposition. If he didn't, his editor should have.  


     


    I tend to trust Forbes editorial content - their stuff seem well-written at least, so I'd be surprised if they would print something with such a flawed premise.


     


    But who knows...

  • Reply 17 of 51
    herbapou wrote: »
    <p> There is nothing wrong with the agency model on the Apple side. The problem is Apple put out a rule that publishers could not offer there books somewhere else at a lower cost,this is where Apple will get caught.</p>

    Maybe I misunderstood the agreement. I thought that Apple only wanted to be able to match the price if a ebook was offered elsewhere at a lower price. In other words, the publishers get to set the price but allows Apple to lower the price if the same product is offered elsewhere at a discount price. If this was the case I don't see a problem - Apple has no advantage over the competition and the selling price is actually set by the discounter - Apple set no prices only adjusted to prices set by others. Also if the publishers agreed to this I can see where they would have to move all other retailers to the agency model so that they could retain control over their profits and their business. I also doubt publishers got together to discuss pricing. It might have happened but I don't see Apple acting as a middleman if it did. Each publisher's pricing probably adjusted rather quickly, if not instantly, by just looking at what price the competition (the other publishers) was charging online and adjust there own pricing accordingly. If the publishers did get together to discuss pricing in specifics, not just generalities, then the publishers would be guilty of price fixing, but again I don't see Apple's involvement here.
  • Reply 18 of 51
    gatorguygatorguy Posts: 21,102member


    Yes, you've misunderstood the agreement as explained by the DoJ.

  • Reply 19 of 51
    solipsismxsolipsismx Posts: 19,566member


     


    Quote:

    Originally Posted by diplication View Post





    Maybe I misunderstood the agreement. I thought that Apple only wanted to be able to match the price if a ebook was offered elsewhere at a lower price. In other words, the publishers get to set the price but allows Apple to lower the price if the same product is offered elsewhere at a discount price. If this was the case I don't see a problem - Apple has no advantage over the competition and the selling price is actually set by the discounter - Apple set no prices only adjusted to prices set by others. Also if the publishers agreed to this I can see where they would have to move all other retailers to the agency model so that they could retain control over their profits and their business. I also doubt publishers got together to discuss pricing. It might have happened but I don't see Apple acting as a middleman if it did. Each publisher's pricing probably adjusted rather quickly, if not instantly, by just looking at what price the competition (the other publishers) was charging online and adjust there own pricing accordingly. If the publishers did get together to discuss pricing in specifics, not just generalities, then the publishers would be guilty of price fixing, but again I don't see Apple's involvement here.


    That's exactly it. It's the MFN (most-favoured nation) clause, which is perfectly legal, as well as the Agency Model. What strikes me as odd about that being an issue is that Apple request by iBook publishers to have the same low-price as other distributers means that Apple's prices are just as low, which goes against the claim that some have made that the Apple is attempting to boost prices with wanting to lower then prices in accordance to other eBook distributors.


     


    If Apple was in this well-known yet somehow super-secrey meeting that was about conspiring to raise prices (as logically it would mean they also get more profit from their 30% cut) then they are guilty and should be penalized, but it seems very unlikely that Apple would have taken such a big risk for so little advantage when just the agency model and MFN are more than enough to satisfy their needs and help break up the Amazon eBook monopsony.

  • Reply 20 of 51
    hill60hill60 Posts: 6,992member


     


    Quote:

    ...revealed by the fact that the price of an ebook in many cases now approaches ? or even exceeds ? the price of the same book in paper even though there are almost no incremental costs to produce each additional ebook unit...


     


    So should thin people start a class action because they pay the same price for clothing as fat people, even though the incremental costs are different?

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