The European Commission and the US Department of Justice have begun investigations into the agency pricing model employed by ebook publishers on digital platforms like Apple's iBooks. The question to be answered is whether that system represents a form of price fixing and runs counter to competition laws in the two big jurisdictions.Keep track of the investigators' findings and other developments right here.
Sep 17, 2015
Apple appears ready to appeal its long-running ebooks antitrust case to the Supreme Court. In a filing from Wednesday, the company asked for a 30-day extension before filing its petition for a writ of certiorari, a request that the court hear the case.Read Article >
Jul 16, 2014
Apple will pay $450 million as part of the US state lawsuit against it claiming the company conspired to raise the price of ebooks to consumers. Pending an appeal effort from Apple, $400 million of that could be going back to consumers, which would add to an earlier $166 million book publishers agreed to pay out as part of an earlier settlement.Read Article >
Jun 17, 2014
Apple has agreed to settle out of court with consumers and US states that brought a damages claim against the company for conspiring to raise the price of ebooks. The terms of the settlement have not been made public. Attorney Steve Berman, who represented the plaintiffs, had argued that Apple should be forced to pay $840 million, or triple the amount he estimated the company gained from jacked-up ebook prices. The trial was set to go to court next month.Read Article >
The lawsuit stemmed from the 2013 ruling against Apple in which US District Judge Denise Cote found Cupertino guilty of colluding with publishers to keep prices higher than the discounted Kindle ebooks Amazon wanted to offer. Apple will continue to appeal against this decision, and Berman notes in a letter to Cote that the eventual settlement payment will depend on the outcome of the appeal. In February, the company lost a bid to remove an antitrust compliance monitor tasked with keeping its ebook activities within the law.
Feb 1, 2014
Apple has received a new damages claim of over $840 million for conspiring with publishing companies to raise the price of ebooks across the entire industry. The claim, filed Friday in New York by an attorney leading a class action lawsuit on behalf of ebooks customers in 33 states, stems from the US Justice Department's successful antitrust lawsuit against Apple that took place in the summer of 2013. Using evidence presented during the course of that trial last year, attorney Steve Berman begins by arguing that Apple owes American ebooks customers a bare minimum of $231 million in damages, and probably far more money than that.Read Article >
The $231 million figure comes from an estimate provided by one of Apple's witnesses during the trial, who said that Apple's deal with publishers to use an "agency model" for pricing ebooks – an agreement under which publishers set the final price of ebooks that Apple would charge consumers, and Apple took 30 percent of each sale – resulted in a 14.9 percent increase in sales dollars. This increase came about because Apple charged an average of price of $12.99 for each new ebook, higher than the average $9.99 previously charged when Amazon was the major ebooks retailer and could lower the price for consumers.
Sep 1, 2013Read Article >
As part of the ebook price fixing scandal that ensnared Apple with a guilty verdict this year, all five publishing giants involved eventually agreed to a settlement in federal court — and now we're starting to get a better idea of just how much consumers will be getting back as part of the deal. If you purchased an ebook from one of the publishers involved between April 1st, 2010 and May 21st, 2012, you could be eligible for up to $3.06 per book purchased. That number is for books that fall under the New York Times bestseller umbrella, while non-bestsellers will net you an estimated $0.73 per purchase. This will include ebooks purchased through Amazon, Barnes & Noble, Kobo, and Apple, and the payment will come either in the form of credit good with whichever retailer you used or a check. The amounts are still estimates for now; the settlement with publishers Macmillan and Penguin is still being hashed out, so the final numbers could be slightly different.
Earlier today, a federal court found that Apple had violated antitrust laws, colluding with publishers to drive ebook prices higher and break Amazon’s hold on the market. On its face, the case involves publishers making decisions that favored their interests over consumers, most particularly the imposition of an "agency model" that lets publishers, not retailers, set book prices.Read Article >
The cost of ebooks is what’s on everyone’s mind. Behind it all, though, is a decision that has nothing to do with pricing schemes and everything to do with a series of backroom deals and suspicious phone calls. Things that were banned in the publishers’ settlements, like most-favored-nation clauses that helped Apple or the agency model, could have been perfectly legal, said Judge Denise Cote. Negotiating with multiple publishers or sharing some details might also have been fine. But in this case, "the evidence taken as a whole paints quite a different picture — a clear portrait of a conscious commitment to cross a line and engage in illegal behavior."
Apple's Eddy Cue, right, was accused of leading the conspiracy to raise pricesRead Article >
After a trial and several settlements with other publishers, a federal judge has ruled that Apple conspired to raise the price of ebooks from major publishers, and a hearing for damages will be held later. Apple was originally accused of price fixing in 2012, along with five of the six major publishers. Several publishers quickly caved, and all had agreed to settlements by early 2013, leaving Apple the only company facing a trial. Now, Judge Denise Cote has found that "the Plaintiffs have shown not just by a preponderance of the evidence but through compelling direct and circumstantial evidence that Apple participated in and facilitated a horizontal price-fixing conspiracy."
While Apple is the only company on trial this week for allegedly conspiring with six of the country's top publishers to fix ebooks and violating antitrust laws, the proceedings early today in US District Court in Manhattan instead cast a hot light on Amazon's ebook business.Read Article >
The case now looks less like US v. Apple, and more like Apple v. Amazon.
One of the most curious claims that Apple's attorneys have made during the company's antitrust fight with the federal government this week is that Amazon considered handing over the ability to price ebooks to book publishers well before the publishers began pushing retailers in that direction. If true, that would take some heat off Apple, which has been accused of initiating the trend.Read Article >
Apple's claim was a surprise, considering that Amazon's ability to lower ebook prices below its competitors' was one of the factors that contributed to Amazon's then 90-percent market share. Why would Amazon have wanted to give up a competitive advantage? The government says Apple's claims are nonsense. To prove it, Mark Ryan, the DOJ's lead attorney, asked the Penguin Group's CEO David Shanks whether Amazon execs were happy when they were told they would be required to move to the agency model and lose control over ebook prices.
Jun 5, 2013
Apple was "indifferent" about whether book publishers ripped away Amazon or any other retailer's ability to price their own books, because Apple is focused only on its own business. That was the claim made by Kevin Saul, an Apple executive who helps negotiate the company's book deals, in federal court yesterday.Read Article >
The US Department of Justice has accused Apple of conspiring with five of the country's six largest book publishers to fix ebook prices in the trial, which was held in the US District Court of Manhattan and kicked off this week. On the second day of the trial, Saul described the attitude toward content creators instilled in the company by co-founder Steve Jobs. He said Apple treats content suppliers the same regardless of size or influence and wanted to create a level playing field with ebook suppliers. For that reason, they they offered the same contract terms to all publishers, big or small. "That's why I love Apple," Saul told the court.
Jun 3, 2013
The trial to determine whether Apple conspired to fix ebook prices got off to a dramatic start today when Apple's attorneys raised questions about whether the company can receive a fair trial from a judge who they say appears to have already made up her mind about the case.Read Article >
After hearing evidence presented by both sides for nearly a year, US District Judge Denise Cote offered her opinion during a pretrial hearing last week about the case — although she cautioned that it was a "tentative" view.
May 15, 2013
The US Department of Justice (DoJ) has called Apple's defense of its ebook practices "unconvincing" in a filing related to an upcoming antitrust case. Apple stands accused of colluding with major publishers to raise the price of ebooks with the launch of its iBooks app and store. The publishers and Apple have defended their actions as an attempt to break Amazon's grip on the market. However, all five of the named publishers in the case have settled with the DoJ, accepting terms that would prevent similar collusion from occurring again and leaving Apple alone to fight its corner.Read Article >
In a filing yesterday, the DoJ detailed an email sent by Apple's Steve Jobs to News Corporation's Rupert Murdoch — News Corp. is the parent company of HarperCollins, one of the publishers named in the original complaint. In the email, Jobs told Murdoch he could either continue to have Amazon price ebooks at $9.99, or "throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99."
Apr 19, 2013
The European Commission's investigation into Apple and major book publishers over ebook price-fixing may soon come to an end after Penguin became the last agency to offer a settlement in the antitrust case. The Commission today published a new notice on its website inviting comments from "interested parties" on Penguin's proposal to terminate existing pricing agreements with Apple which would see it refrain from signing similar agreements for five years.Read Article >
Mar 13, 2013
Judge Denise Cote has granted the Justice Department's request to make Apple CEO Tim Cook sit for a deposition in an ongoing ebook price-fixing lawsuit. The suit originally involved Apple and five major US publishers, all of whom were accused of collaborating to keep prices artificially high. Now, Apple remains the only party that's refused to settle, with a trial currently set for June. If found guilty, Apple faces an injunction against similar conduct going forward, which could potentially hamper future deals.Read Article >
Apple attempted to block Cook's deposition on the grounds that it wasn't necessary since 11 other executives had already testified. The court, however, determined that he likely had information about both Apple's entry into the ebook market and relevant conversations with Steve Jobs. Cote said that the impossibility of requiring Jobs himself to testify justified asking other high-level executives to help fill the gap. Cook, who stepped up as CEO in 2011, is not personally implicated in helping to organize the alleged price-fixing: the Justice Department has suggested that iTunes head Eddy Cue helped manage publisher meetings, with Jobs putting his weight behind negotiations.
Feb 8, 2013
The US Department of Justice has announced that it's settled with Macmillan in an ebook price-fixing case involving Apple and several other publishers. In a statement, the DoJ said Macmillan has agreed to lift restrictions on discounting ebooks, and to report on any joint ventures or collaborations with other publishers. Macmillan, HarperCollins, Penguin, Simon & Schuster, and Hachette were all accused of conspiring with Apple to raise the prices of their ebooks in response to Amazon's low prices in mid-2012. Three of the publishers almost immediately settled, and Penguin followed suit in December, leaving Macmillan the only holdout besides Apple. Both Macmillan and Penguin's decisions still need to be officially approved after a public comment period.Read Article >
With Macmillan effectively out of the picture, the Department of Justice says it will continue to prosecute Apple alone; it expects a trial to begin in June of this year unless a settlement is reached. The European Union pursued a similar case against Apple and the five publishers, but it accepted a settlement from all except Penguin late last year.
Dec 18, 2012
Book publisher Penguin has just settled with the US Department of Justice over an ongoing ebook price-fixing lawsuit. That leaves only Apple and publisher Macmillan out of the original defendants; Harper Collins, Simon & Schuster, and Hachette all finalized a settlement back in September. Like the other publishers, Penguin will terminate its agreement with Apple and other ebook retailers and will be constrained for two years from entering into any agreements that limit retailers' abilities to offer promotions or discounts on Penguin's ebooks.Read Article >
While Macmillan and Apple appear to still be holding out, there's a chance they could settle sooner or later — both parties settled a similar price-fixing investigation with Europe in early November. That said, Apple has long insisted that it has done nothing wrong, so a reversal of its position is far from a sure thing. With more and more defendants in the DOJ's case electing to settle, however, Apple's defiance may only last so long. Oddly enough, Penguin hasn't settled with the European Commission yet, though the latest word was that talks were ongoing.
Nov 6, 2012
Apple and book publishers may see their ebook price fixing drama come to a close in Europe soon: Reuters reports that EU regulators will accept an offer allowing Amazon and others to sell ebooks at lower prices than Apple, which will reportedly end the antitrust investigation and allow Apple and others to avoid fines. The proposal was offered by Apple, HarperCollins, Hachette, Macmillan, and Simon & Schuster in August. The group was accused of colluding to fix ebook pricing instead of competing with retailers like Amazon. Reuters reports that the EU is likely to accept the offer and announce the decision in December, which would come roughly one year after it announced a formal investigation into price fixing.Read Article >
Apple and publishers are also under fire in the US over alleged price fixing, and federal judge approved a settlement offer from Harper Collins, Simon & Schuster, and Hachette back in September. Apple, MacMillan, and Penguin have yet to offer or agree to a settlement — but they may not blink in the US case. All three parties have been defiant so far, claiming that the Department of Justice's accusations about price fixing are false.
Oct 15, 2012
Customers that purchased an ebook from Amazon between April 2010 and May 2012 will receive a partial refund soon. The Wall Street Journal says that Amazon has begun to email customers informing them that they'll receive between $0.30 and $1.32 for each ebook from the publishers named in the lawsuit — namely Hachette, HarperCollins, Macmillan, Penguin, Simon & Schuster, and their subsidiaries. The top-tier credits will be reserved for titles that made The New York Times' bestsellers list at any point between April 2010 and May 2012. Refunds will arrive in the form of an account credit, although you will be able to request a check instead.Read Article >
The refund is the result of an investigation into price-fixing by Apple and major publishers. The defendants agreed on a settlement with a number of State Attorneys General back in August, but consumers won't receive a credit until courts approve the agreement at a hearing next February. Barnes & Noble told The Wall Street Journal that it will be sending a similar email to its customers soon, but in the meantime you can check out an official FAQ that explains eligibility and the refund process in detail.
Sep 19, 2012
Apple and four major book publishers have agreed to terminate their existing agreement for selling ebooks at higher prices as part of the ongoing European Union antitrust investigation into ebook sales practices. Under the new settlement, the "agency" agreement between Apple and publishers is abolished; instead, retailers are free to set the price of ebooks anywhere they choose over the next two years, provided that the value of the discounts offered does not exceed the value of the sales commissions the retailer receives from the publisher. Additionally, the clauses built into ebook sales contracts that prevented publishers from having their books sold for less than they were sold by Apple have also been done away with for at least the next five years.Read Article >
In a statement to The Wall Street Journal, publisher Hachette Livre said it believes its agreement with Apple "was in the best longer-term interests of the whole book universe," but decided that "the costs, length, and distractions of the proceedings before the European Commission would be too disruptive to its business and to the development of ebook markets in general." This development comes a few weeks after Apple and four major publishers decided to offer discounted ebooks in an effort to end the EU's antitrust investigation. While the EU hasn't yet formally closed its look into ebook business practices, this new agreement should go a long way towards resolving the issues the EU has been investigating for the better part of a year.
Sep 10, 2012
Just a few days after a federal judge approved a settlement offer by several major book publishers who were sued for allegedly fixing the prices of ebooks, Amazon has already begun discounting titles from one of the publishers. A number of ebooks from HarperCollins — which was part of the settlement along with Hachette and Simon & Schuster — are being offered at discounted prices, with an Amazon spokesperson confirming to paidContent that "we are happy to again be lowering prices on a broad assortment of HarperCollins titles."Read Article >
There's no word yet on whether or not ebooks from the other two publishers will start being discounted as well. While it may seem like things moved very fast, it shouldn't be too surprising that the deal was made quickly — when the settlement was initially reported last Friday, Amazon's Jay Marine told Reuters that ebook prices would be going down "soon." We've reached out to Amazon for more information about the changes and will update should we hear back.
Sep 6, 2012Read Article >
The financial terms of the settlement, which was originally offered back in April, have not been released, though the judge said that the settlement was in the public interest. According to the original announcement of the settlement, the publishers are expected to end their "anticompetitive most-favored-nation agreements with Apple and other ebook retailers." Litigation against Apple and the remaining two publishers by the US is expected to continue unless a settlement is reach with them as well.
Aug 31, 2012Read Article >
Apple and four major European publishers are offering to sell ebooks at a discount in an attempt to end an EU antitrust investigation into price-fixing. The news comes from an unnamed source at Reuters, who adds that the discount would last for two years. The publishers, which include giants like Harper Collins and Simon & Schuster, were accused of colluding to fix ebook pricing at a certain level instead of competing, possibly "with the help of Apple." According to Reuters, the deal specified that other retailers, such as Amazon, could not sell the books at a lower price. We've reached out to the parties involved in the story to confirm its accuracy, and will update you when we hear back.
Aug 30, 2012
Hachette, HarperCollins, and Simon & Schuster were quick to strike settlements in state antitrust lawsuits brought earlier this year over alleged ebook price fixing. Now, the two sides have settled on a payout, as well, with the publishers agreeing to pay a total of $69 million to consumers across 49 states and five US territories.Read Article >
The proposed settlement would go into effect 30 days after being approved by a federal judge in New York. At that point, customers who purchased agency-priced ebooks between April 1, 2010 and May 21, 2012 would be eligible to receive restitution, though amounts will vary by state. Consumers in Connecticut, for instance, would receive up to $1.26 million in restitution, while those in Hawaii would receive up to $300,000. (Minnesota is the only state not involved in the settlement.)
Jul 23, 2012
Department of Justice defends original price fixing settlement, calls Apple and publisher comments 'self-serving'
After receiving 868 public comments on its investigation of possible ebook price fixing, the US Department of Justice has responded (PDF) with harsh words for Apple and major publishers, saying that it will continue with the case and settlements as planned. While reiterating many of its original claims, it also argued against its critics, particularly those who believe ebook sellers and publishers were responding to monopolistic behavior by Amazon. Antitrust laws were "enacted to protect competition, not competitors," the statement says, characterizing the complaints of Apple and others as "self-serving."Read Article >
While the Justice Department maintains that it found evidence of predatory behavior by Amazon "lacking," it says that such behavior would still not justify a conspiracy. "Even if there were evidence to substantiate claims of 'monopolization' or 'predatory pricing,' they would not be sufficient to justify self-help in the form of collusion." It also argues that far from increasing innovation, "Apple's entry into the ebook market was not immediately successful." Instead, Barnes & Noble was responsible for much of Amazon's lost market share, and some innovations Apple has received credit for — like color ebooks — were already in the works.
Jun 8, 2012
Barnes & Noble today filed a comment with the US Department of Justice objecting to a proposed settlement in the government's price-fixing lawsuit against several book publishers. In a 26-page document, the retailer slams the DOJ for attempting to regulate an industry "that it little understands." B&N asserts the settlement as it stands now is "overboard" and would ultimately see American consumers come out on the losing end — forced to endure "higher overall average e-book and hardback prices and less choice, both in how to obtain books and in what books are available."Read Article >
While the DOJ alleges that the agency model agreed upon by Apple and publishers has caused ebook prices to rise across the board, Barnes & Noble tells a considerably different tale. It paints the early days of the e-reader industry as a bleak period which saw Amazon catapult ahead of competitors thanks to its wholesale pricing strategy. When the bookseller launched its Nook hardware (and companion ebook store) in 2009, Amazon enjoyed more than 90 percent of ebook sales, and B&N claims it lost "substantial money" as it struggled to remain competitive with the online retailer's below-cost $9.99 titles. Ultimately the court filing reveals that the company was failing to gain significant market share, fortunes which changed for the better with the introduction of agency agreements.