• Presiding Judge Appears to be Siding with Apple in eBook Antitrust Appeal

    One of the presiding judges in Apple’s appeal of the US government’s e-book antitrust case is currently questioning whether the government’s original case was legitimate. In the appeal, Apple is hoping it will be able to overturn a verdict that found it along with certain book publishers guilty of conspiracy. If Apple wins the appeal, it won’t pay any penalty but on the other hand if it loses, it must pay $450 million in damages and attorney’s fees.

    Judge Dennis Jacobs, one of three judges on the appeals panel, was seen as “openly hostile to the government’s case,” in a report by AFP. Jacobs appeared to doubt the government’s case against Apple and expressed his view that the Cupertino California company was taking on “predatory pricing” strategies by the dominant player in the market, Amazon.

    Jacobs had the following to say regarding the matter:

    What we're talking about is a new entrant who is breaking the hold of a market by a monopolist who is maintaining its hold by what is arguably predatory pricing.
    Officials from Apple have said that they are continuing to fight the case out of principle. The company continues to stay firm in stating that no illegal collusion took place between itself and book publishers, even if book prices did in fact rise. In its appeal, Apple has pointed out Amazon’s continuing dominant position in the market. At the time of the launch of the iBookstore, Amazon accounted for nine out of every ten eBook sales. Under negotiations led by Eddy Cue, Apple and several book publishers opted to switch to a so-called “agency” pricing model which prevented content owners from being able to sell the same titles at a lower price elsewhere without offering the same price on Apple’s iBooks platform as a “most favored nations” clause.

    Before this model, the eBook industry was under the “wholesale model” preferred by Amazon. In this model, resellers such as Amazon had the power to set prices, selling titles at or below cost if they chose to do so. The Cupertino California company argued here that the desire to raise prices on books was made because they felt the titles were being sold by Amazon under the wholesale model for far too little.

    As of right now, Apple currently is stuck with an injunction that bars it from entering into any deals with publishers and the company is under the watch of antitrust monitor, Michael Bromwich. We’ll have to see what ends up happening during the appeal.

    Source: AFP via AppleInsider
    This article was originally published in forum thread: Presiding Judge Appears to be Siding with Apple in eBook Antitrust Appeal started by Akshay Masand View original post
    Comments 1 Comment
    1. PCYoda's Avatar
      PCYoda -
      The problem is that lower prices don't always favor consumers in the long run.

      If the prices of books are driven down, eventually the perceived value of books is driven down. That causes potential talent to decide to pursue something other than writing. At that point, we've lost out on the creative minds of some because a giant like Amazon drove the perceived value of the craft into the ground.

      A fair market price that compensates everyone involved in providing the product and service as well as is fair to the consumer is the best balance. Apple, in my opinion, brought balance to the equation that was being skewed in a bad direction by Amazon.
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