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Final ruling in Apple eBook conspiracy case

  • Published on March 14, 2016
Final ruling in Apple eBook conspiracy case

The U.S. Supreme Court has refused to consider an appeal by Apple in the ruling that the company had conspired with publishers to increase the price of eBooks. Earlier an appeal’s court had held that Apple encouraged publishers to artificially increase the price of digital books. As a result, Apple will be paying $450 million to settle the case, of which $400 million will be returned to customers who purchased eBooks.

The eBook conspiracy case was the result of Apple attempting to break into digital book sales at a time when eBook distribution was dominated by Amazon. In an effort to reduce Amazon’s ability to offer discounts, Apple worked with publishers in an effort to reduce discounting by Amazon. When first confronted with the case, five large book publishers agreed to settle the price fixing conspiracy case, and offered credits to buyers of books who may have been overcharged. Yet Apple refused to settle, and took the case to an appeals court. The original judge in the case said that they were guilty of price fixing and Apple “was a knowing and active member of that conspiracy.” After losing the appeal, Apple attempted to get the U.S. Supreme Court to hear the case, but the justices refused to review the verdict, leaving Apple liable for the $450 million dollar settlement.

Apple has claimed that their entry into the eBook market actually increased competition, but the government lawyers and later judges determined that the opposite was true. By encouraging publishers to set higher prices and not discounting books, Apple was seeking to undermine Amazon’s ability to offer discounts. The verdict against Apple is a victory for Amazon’s approach, and will let distributors continue to set book pricing rather than the book publishers. Since the start of the case Apple, Barnes & Noble, Google, and others have all bolstered their digital book offerings, and many publishers are offering their own direct-to-consumer eBooks as well. Despite an increasing number of competitors, Amazon remains the dominant reseller of digital books for consumers. As part of eBook courses offered at American Graphics Institute, preparation of eBooks for various distributors is covered, with most digital books originating from InDesign files. The original setup of book files for eBook distribution does require fundamental knowledge of page layout, which can be learned through InDesign training, and is needed before starting to work with the various eBook formats. Of the eBook formats, ePub is preferred by many publishers as the final distribution format, being used by Apple, Barnes & Noble, and Google. Yet  there remains a need to convert and test digital books for the Kindle, which uses a proprietary format of mobi which is different from ePub. The mobi format is an offshoot of ePub and used by Amazon for their digital book distribution on their Kindle devices and on their digital book stores.

About the author

Christopher Smith is president of American Graphics Institute in Boston, Massachusetts. He is the publisher and editor of the Digital Classroom book series, which have sold more than one million copies. At American Graphics Institute, he provides strategic technology consulting to marketing professionals, publishers and to large technology companies including Google, Apple, Microsoft, and HP. An expert on web analytics and digital marketing, he delivers Google Analytics training along with workshops on digital marketing topics. He is also the author of more than 10 books on electronic publishing tools and technologies, including the Adobe Creative Cloud for Dummies. Christopher did his undergraduate studies the at the University of Minnesota, and then worked for Quark, Inc. prior to joining American Graphics Institute where he has worked for 20 years.