Skip to main content

Apple petitions the Supreme Court over accusations of ebook price fixing

apple ebookpricing supreme court case ibooks
Image used with permission by copyright holder
Apple maintains it did nothing wrong when it colluded with publishers in 2010 to fix ebook prices, and the company is so certain of its innocence that it will attempt to sway the highest court in the land. In a filing submitted Wednesday, Apple requested a 30-day extension in order to file a writ of certiorari, a formal petition for audience before the Supreme Court.

It’s the latest development in a long-running case that spans years. The Justice Department and 33 states first filed a lawsuit against Apple in 2012, accusing the company of conspiring with big-name publishers Hachette, Simon & Schuster, HarperCollins, Penguin, and Macmillian to supplant the ebook market’s then wholesale model with an agency model. Under the terms of a secretive arrangement, publishers reserved the right to dictate the price of ebooks on Apple’s iBooks store and elsewhere. In return, the iPhone maker received a bigger cut of sales.

“Apple did not conspire to fix ebook pricing and we know we did nothing wrong.”

The goal was to gain leverage against Amazon, which had grown to command 80 to 90 percent of all ebook sales in 2010, thanks a strategy of aggressively undercutting wholesale pricing. Under the agency model, ebook prices quickly rose,  in some cases by nearly 20 percent.

In 2013, U.S. District Judge Dennis Cote found Apple guilt of being “conscious[ly] committed to … engage in [the] illegal behavior” of fixing ebook prices. That decision was reaffirmed in a 2-1 federal appeals court ruling earlier this summer. Second Circuit Court Judge Debra Ann Livingston, writing for the majority, held that “the district court correctly decided that Apple orchestrated a conspiracy among the publishers to raise ebook prices.”

In the filing Wednesday, Apple argues that a decision against it would have grave implications for the creative economy. “Dynamic, disruptive entry into new or stagnant markets — the lifeblood of American economic growth — often requires the very type of” behavior that Apple engaged in, the company argues.

“We are disappointed the Court does not recognize the innovation and choice the iBooks Store brought for customers,” said an Apple spokesperson after the company’s appellate loss. “While we want to put this behind us, the case is about principles and values.”

Should the Supreme Court decline to hear the case, Apple’s expected to pay $450 million — most of it to customers of its iBooks store — to resolve antitrust liabilities with the Justice Department and other plaintiffs. That’s pocket change to a company of Apple’s size — around 3 percent of its 2014 fourth quarter revenue, to be exact — but the iPhone maker seems more concerned with the principle of the thing. “Apple did not conspire to fix ebook pricing … and we know we did nothing wrong,” the company said in a statement earlier this year.

Editors' Recommendations

Kyle Wiggers
Former Digital Trends Contributor
Kyle Wiggers is a writer, Web designer, and podcaster with an acute interest in all things tech. When not reviewing gadgets…
Apple permanently drops the price of its HomePod to $299
homepod tips and tricks availability interior placement 012218

Apple got into the smart speaker game late and it hasn't been able to make up much ground. While the HomePod is a premium-quality speaker, Apple is going to try to get it into more homes by dropping the price. The company announced on Thursday, April 4, that it will give the Apple HomePod a permanent $50 price break, retailing for $299.

This won't be the first time that Apple has dropped the HomePod below the $300 price mark. During the holidays, the company slashed $100 off the retail price and sold the smart speaker for as low as $249. That was just a temporary discount to boost sales at a time people are spending more, though. This latest announcement is a permanent price break.

Read more
Legal dust-up: MacBook owners are suing Apple over a lack of filters

An affected MacBook screen from the lawsuit case gallery.Apple is under fire from a new class-action lawsuit. This one isn't about keyboards, but it is about dust. Many MacBook Pro and iMac users are fed up with the dust that is built up in their systems, in some cases leading to smudges on screens and in others, severe overheating, making laptops and desktops run much slower than they should due to thermal throttling.

Apple is no stranger to legal action from its user base having faced down class actions for a variety of faults in its hardware over the years. The latest one claims Apple has been negligent in not providing adequate dust filtering for its products, leading to an excessive amount of dust collecting inside MacBooks and iMacs. This lead to problems which owners were forced to fix at their own expense and usually through Apple since the company does not like third-party repairs.

Read more
Apple v. Pepper: The Supreme Court could rule the App Store is a monopoly
The Supreme Court is skeptical that the App Store isn't a monopoly
apple app store web redesign png

Apple is facing yet another antitrust case. The subject this time? Apps. Earlier this year, the Supreme Court agreed to hear Apple Inc. v. Pepper, a case that asks whether or not Apple has monopolized the app market. If the Supreme Court rules against Apple, it could have far-reaching implications for everyone. Now, after hearing Apple's arguments in the case, it's looking more and more like that might happen.

According to a report from CNBC, the U.S. Supreme Court appeared skeptical of Apple's arguments against ruling that the App Store is a monopoly. Two of the judges suggested that the precedent on which Apple is basing its arguments may need to be revised. Despite this, it's impossible to tell how the Supreme Court will rule -- most cases that have come to the Supreme Court have ended up in favor of corporations. It's important to note that the Supreme Court isn't settling the underlying antitrust issue, it's ruling whether consumers have the right to bring this case against Apple at all.

Read more