Federal appeals court charges Apple $450M fine for fixing ebook prices

apple ebookpricing supreme court case ibooks
Apple’s ebook price-fixing saga has finally come to a quiet close, it seems. A federal appeals court ruled 2-1 against the company this morning, affirming the finding of U.S. District Judge Denis Cote that the Cupertino-based company illegally colluded with publishers to prop up the prices of digital books.

“Apple orchestrated a conspiracy among the publishers to raise ebook prices.”

“We conclude that the district court correctly decided that Apple orchestrated a conspiracy among the publishers to raise ebook prices,” wrote Second Circuit Judge Debra Ann Livingston in today’s decision.

It’s the outcome of charges brought by the Justice Department three years ago, which alleged that Apple organized an ebook pricing scheme, a violation of federal antitrust law. The company fought the litigation intensely, denying wrongdoing and “refusing to settle unlike the publishers with whom it allegedly colluded,” the Wall Street Journal reports.

The Justice Department’s lawsuit, which 33 states went on to join, was filed in 2012 after evidence arose that Apple willfully influenced the ebook market. The company led the charge to supplant the wholesale model for ebooks, which before the introduction of its iBooks store was the industry standard, with an agency model that granted publishers the right to dictate prices. Under the terms of a collective agreement with Hachette, Simon & Schuster, HarperCollins, Penguin, and Macmillan, Apple received a larger cut of sales in return.

The arrangement was mutually beneficial. Apple was able to quickly fill its newly-launched ebooks storefront, and publishers were given leverage against Amazon, which came to command between 80 and 90 percent of all ebooks sales in 2010 through aggressive pricing. Under the agency model, ebook prices quickly rose.

Despite today’s decision, Apple isn’t entirely without recourse — it could petition the Supreme Court or ask the Second Circuit to rehear the case. But the Wall Street Journal reports that the company’s expected to pay $450 million — most of it to customers of its iBooks store — as part of an agreement made with the Justice Department and plaintiffs in November.

“Apple did not conspire to fix ebook pricing and this ruling does nothing to change the facts. We are disappointed the Court does not recognize the innovation and choice the iBooks Store brought for consumers,” Apple said in a statement. “While we want to put this behind us, the case is about principles and values. We know we did nothing wrong in 2010 and are assessing next steps.”

Those sound like fighting words, but should Apple finally decide to pony up, it wouldn’t hurt the company’s bottom line too severely. As the Wall Street Journal notes, the proposed settlement amounts to less than 3 percent of Apple’s 2014 fourth quarter revenue.

Emerging Tech

San Francisco won the battle, but the war on facial-recognition has just begun

San Francisco has become the first city in America to ban facial recognition. Well, kind of. While the ruling only covers certain applications, it's nonetheless vitally important. Here's why.
Deals

The Ecovacs Deebot 601 robot vacuum gets a huge 50% price cut on Amazon

Nobody likes spring cleaning season, but smart devices like robot vacuums have made cleaning easier than ever. Roomba may rule the roost, but affordable options abound, like the Ecovacs Deebot 601, now 50% off on Amazon.
Mobile

FCC chairman and commissioner support the T-Mobile and Sprint merger

T-Mobile and Sprint are getting closer to merging. After a few failed attempts, the two companies announced their merger at the start of 2018. The new T-Mobile could be better positioned to take on the likes of Verizon and AT&T.
Home Theater

Nura shrinks its personalized sound tech down to wireless earbud size for $199

Nura debuted the NuraLoop: Wireless earbuds with the same custom sound tech as the Nuraphone, but at a much lower price. Adjustable ANC and 16 hours of battery life make them a superb deal at the pre-order price of $159.
Emerging Tech

Awesome Tech You Can’t Buy Yet: Insect drones and kinetic sculpture robots

Check out our roundup of the best new crowdfunding projects and product announcements that hit the web this week. You may not be able to buy this stuff yet, but it's fun to gawk!
Mobile

The best bezel-less phones cut all the right corners without losing space

As the smartphone industry marches toward a bezel-less future, we compare the shrinking bezels on the latest and greatest devices. Find out which manufacturers have the smallest bezels on their smartphone as we compare them side by side.
Wearables

Samsung adds One UI and battery boosts to Galaxy Watch and Gear smartwatches

Samsung has updated software for its Galaxy Watch, Gear Sport, and Gear S3 watches to implement its updated and simplified One UI interface. The update also offers new watch faces, battery life improvements, and health and fitness features.
Mobile

Motorola One Vision vs. Nokia 7.1: Which is the best budget phone for you?

If you're trying to decide whether the Motorola One Vision or the Nokia 7.1 would be a better buy, then we've got you covered with this comparison. Find out exactly what sets these Android phones apart and which is best for you.
Mobile

New York could dish out fines for texting while crossing the street

Do you text on your phone while crossing the street? The dangers of stepping out in front of a car or bus are obvious, but in New York, offenders could soon face a fine of as much as $250, too.
Social Media

Help wanted: British royal family seeks social media wiz to run its accounts

The British royal family is looking for a social media expert to help it communicate its role and activities to the masses. So if you like the idea of having the Queen as your boss, why not throw your hat in the ring?
Mobile

Realme starts selling phones in the U.K., and its low prices aren’t fiction

Realme, a Chinese smartphone manufacturer from the same group as OnePlus, Vivo, and Oppo, has launched its first device in the U.K. and Europe. The Realme 3 Pro is a competitively priced phone with an impressive specification.
Mobile

The best OnePlus 7 Pro cases to keep your OnePlus in one piece

The OnePlus 7 Pro is OnePlus's latest flagship killer, and it's an incredible phone. But it's expensive, and it's not going to protect itself. Get solid protection in the style you want with the best OnePlus 7 Pro cases.
Mobile

Huawei fires back against U.S. ban after Google and others sever ties

Google has severed most of its partnerships with Huawei, after its addition to the "Entity List" of the U.S. Department of Commerce. Future Huawei devices will lose access to the Google Play Store, Chrome, and Android updates.
Deals

The Samsung Galaxy Tab S4, the best Android tablet in the game, is now $152 off

Apple dominates the tablet market, but others are catching up: The Samsung Galaxy Tab S4, our favorite Android tablet, proves that these devices have what it takes to compete with the iPad Pro -- and it's on sale right now for just $498.