Apple was “ringmaster” in conspiracy to fix e-book prices, US says

[DainBramaged]

Apple was the "ringmaster" in a conspiracy to fix the prices of e-books at rates higher than those charged by Amazon, US officials said yesterday in court documents.

The Department of Justice (DOJ) filed suit last year against Apple and six e-book publishers: Hachette, HarperCollins, Macmillan, Penguin, Pearson, and Simon & Schuster. The trial is scheduled to begin June 3 in the US District Court for the Southern District of New York. Apple has denied being part of any conspiracy, but the government's proposed conclusions of law (PDF) include an e-mail Steve Jobs sent to James Murdoch of HarperCollins' owner News Corp., in which Jobs said HarperCollins should "[t]hrow in with Apple and see if we can all make a go of this to create a real mainstream e-books market at $12.99 and $14.99.”

The government also noted that Jobs "admitted to his biographer that Apple 'told the publishers "We’ll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that is what you want anyway. But we also asked for a guarantee that if anybody else is selling the books cheaper than we are, then we can sell them at the lower price too.'"

The US says Apple and the publishers conspired to fix the prices of e-books above Amazon's standard rate of $9.99, and that publishers attempted to "mov[e] Amazon off of its $9.99 pricing." An e-mail from Random House VP Matt Shatz to Random House executive Madeline Mcintosh said Apple is "probably the only retailer in the world that offers us a last chance to shift the anchor away from $9.99 for any foreseeable future."

The e-mail from Jobs to Murdoch proves that "Apple was not only aware of Publisher Defendants’ horizontal agreement, it joined the conspiracy with the intent of furthering that agreement’s success," the US said. The US court document further states that "Because of its place 'in the center as the ringmaster' of a horizontal agreement among Publisher Defendants to fix the retail prices of e-books, Apple is liable per se under Section 1 of the Sherman Act." Section 1 of the Sherman Act of 1890 prohibits conspiracies "in restraint of trade or commerce."


http://arstechnica.com/tech-policy/2013/05/apple-was-ringmaster-in-conspiracy-to-fix-e-book-prices-us-says/

[onehandle]

1. 'Publishers already decided to fix prices before iBookstore came along'

In the ongoing e-book price fixing case with the Department of Justice, in which Apple is accused of conspiring with publishers to fix eBook pricing and cut out Amazon, Apple has again responded to the DOJ’s claims detailing the “tough negotiations” it went through with publishers. To further prove its point that it was not colluding with publishers to fix e-book pricing, Apple said it “one-on-one” and “contentious negotiations” at a time when publishers were already considering methods of getting Amazon to increase pricing:

But Apple said the publishers had decided, independent of Apple, to eliminate discounts on wholesale book prices of e-books, to sell lucrative hardcover books first to bookstores in a practice called windowing and to take other measures to push Amazon to raise prices.

Each publisher had different counterproposals, Apple said in a filing that described tough negotiations in detail. “Early — and constant — points of negotiation and contention were over Apple’s price caps and 30 percent commission. After Apple sent draft agency agreements to each publisher CEO on January 11, each immediately opposed Apple’s price tiers and caps,” Apple said in its 81-page proposed findings of fact.

Apple is now the only defendant in the case filed in April 2012 as the 4 other publishers originally accused in the lawsuit, including Pearson, Macmillan, Simon & Schuster, and HarperCollins, have already reached settlements and agreed to return to their old pricing scheme for a certain period of time. The trial is now slated for June 3rd with the DOJ seeking a ruling that “Apple violated antitrust law and an order blocking it from engaging in similar conduct.”

http://9to5mac.com/2013/05/15/apples-to-doj-publishers-already-decided-to-fix-prices-before-ibookstore-came-along

[msongs]

2. maybe amazon should be sued for trying to "fix" the price a 9.99 nt