Apple case cracks open ebooks, digital goods pricing

Advertisement
By Agence France-Presse | Updated: 12 July 2013 15:36 IST
A ruling by an American judge that Apple illegally conspired to fix ebook prices could boost competition in the market for all kinds of digital goods, including music and movies, analysts say.

Wednesday's decision by a federal judge also may allow online retail giant Amazon to cement its dominance, though pricing models are still evolving.

"The consumer is the huge winner," said David Balto, a Washington antitrust lawyer and former policy director for the Federal Trade Commission.

Advertisement

"Apple's policies clearly increased prices, and if permitted Apple would have used this formula to raise prices in numerous markets. This is a landmark decision that demonstrates the value of strong antitrust enforcement."

US District Judge Denise Cote's ruling followed a three-week trial in New York in June. She concluded that Apple was liable for "facilitating and encouraging" a collective effort by five publishers to end price competition for ebooks. She has ordered a new hearing to determine damages.

Advertisement

David Crane, a University of Michigan specialist in antitrust law, said Apple would now be heavily impeded from influencing the pricing of content.

"Whether it's music or movies or newspapers or whatever it is, basically Apple wants to be heavily involved in reformulating the business model of how pricing is set and who decides on release dates and so forth," Crane said.

Advertisement

"This kind of precedent says 'Apple: be very careful with anything other than having one-on-one negotiations with content providers.'"

The Justice Department has said it will seek interim relief and a court-ordered independent monitoring trustee.

Advertisement

A group of 33 states are seeking unspecified damages against Apple. A class-action suit against the technology giant could also be bolstered by judge Cote's ruling.

Apple has said it will appeal and "continue to fight against these false accusations."

Some analysts noted that the court decision could help Amazon assert its dominance in electronic books, and that the online retailer has moved to the "agency" model which Apple helped impose.

"Everybody is on agency now," said Roger Kay, analyst at Endpoint Technology Associates.

Before Apple came on the scene, Amazon used a "wholesale" model and sold ebooks at the cut-rate price of $9.99 for most titles.

"Amazon was taking profit out for everyone else is well," Kay said. "Now it's busted open. But Amazon also benefits from higher prices."

Amazon is believed to control around two-thirds of US ebook sales down from 90 percent a few years ago while Apple's share is said to be around 20 percent.

ebook sales have been cooling after a few years of sizzling growth.

A survey by the Association of American Publishers said 2012 growth in such sales was 41 percent an impressive figure but below the red-hot pace of recent years including 2011, when ebook sales doubled.

Michael Weinberg, vice president at the digital advocacy group Public Knowledge, said the marketplace is still sorting out the model for ebooks and other content.

He hopes the case will raise awareness that the ebook market is being constrained by digital "locks," sometimes called digital rights management, which keep electronic content tied to one device.

"If you have all these files on your Kindle, and can move them to other devices, that would help the market grow," he said.

"While no one would argue that major publishers have fully come to terms with this lesson it is encouraging that they are at least aware enough of it to discuss it."

 

Get your daily dose of tech news, reviews, and insights, in under 80 characters on Gadgets 360 Turbo. Connect with fellow tech lovers on our Forum. Follow us on X, Facebook, WhatsApp, Threads and Google News for instant updates. Catch all the action on our YouTube channel.

Further reading: Amazon, Apple, Internet, ebook
Advertisement

Related Stories

Popular Mobile Brands
  1. Poco M8s 5G Debuts Globally With 7,000mAh Battery: See Price, Features
  2. OnePlus Ace 6 Ultra's Key Specifications Surface via Geekbench Listing
  3. Xiaomi TV S Mini LED 75 (2026) Review
  4. Vivo X300 FE Roundup: Expected Price in India, Specifications
  5. Oppo Find X9 Ultra With 200-Megapixel Periscope Camera Launched Globally
  6. Motorola Edge 70 Fusion Review
  7. Redmi Buds 8 Launched With Up to 50dB ANC, Up to 44 Hours Total Battery Life
  8. Motorola Edge 70 Pro+ Leaked Renders Hint at Design, Five Colour Options
  9. Apple's iOS 27 Update Might Drop Support for These iPhone Models
  1. NASA Shuts Down Voyager 1 Instrument to Extend Mission Life in Deep Space
  2. Oppo Enco Clip 2 With Open-Ear Design, Up to 40 Hours Total Battery Life Launched Alongside Oppo Watch X3 Mini
  3. Vivo Y6t Launched With 6,500mAh Battery, Snapdragon 4 Gen 2 SoC: Price, Specifications
  4. OCBC Partners Lion Global Investors and DigiFT to Launch Tokenised Gold Fund With GOLDX Token
  5. Oppo Pad 5 Pro Launched With 13,380mAh Battery, Snapdragon 8 Elite Gen 5 SoC Alongside Oppo Pad Mini: Price, Features
  6. Redmi K90 Max Launched With Dimensity 9500 SoC, 8,550mAh Battery and Active Cooling Fan: Price, Specifications
  7. Oppo Find X9 Ultra Launched With Snapdragon 8 Elite Gen 5 SoC, 200-Megapixel Periscope Camera: Price, Specifications
  8. Oppo Find X9s Pro Launched With 200-Megapixel Cameras, 7,025mAh Battery: Price, Specifications
  9. OnePlus Ace 6 Ultra Geekbench Listing Reveals MediaTek Dimensity 9500 Chip, 16GB RAM
  10. Motorola Edge 70 Pro+ Leaked Renders Hint at Design, Five Colour Options
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2026. All rights reserved.