Supreme Court rejects Apple e-books price-fixing appeal

[garbon]

http://www.reuters.com/article/us-usa-court-ebooks-idUSKCN0W91LQ

Of course, the most beloved company was still fighting this. I also like that mini-quote about how price fixing was necessary to boost innovation.

The Supreme Court on Monday declined to hear Apple Inc's challenge to an appellate court decision that it conspired with five publishers to increase e-book prices, meaning it will have to pay $450 million as part of a settlement.

The court's decision not to hear the case leaves in place a June 2015 ruling by the New York-based 2nd U.S. Circuit Court of Appeals that found Apple (AAPL.O) liable for engaging in a conspiracy that violated federal antitrust laws.

Apple, in asking the high court to hear the case, said the June appeals court decision that the company had conspired with the publishers contradicted Supreme Court precedent and would "chill innovation and risk-taking."

The 2nd Circuit's ruling followed a 2013 decision by U.S. District Judge Denise Cote that Apple played a "central role" in a conspiracy with publishers to raise e-book prices.

The Justice Department said the scheme caused some e-book prices to rise to $12.99 or $14.99 from the $9.99 price previously charged by market leader Amazon.com Inc.(AMZN.O)

"Apple's liability for knowingly conspiring with book publishers to raise the prices of e-books is settled once and for all," said Bill Baer, head of the U.S. Justice Department's antitrust division.

Publishers that the Justice Department said conspired with Apple include Lagardere SCA's (LAGA.PA) Hachette Book Group Inc, News Corp's (NWSA.O) HarperCollins Publishers LLC, Penguin Group Inc, CBS Corp's (CBS.N) Simon & Schuster Inc and Verlagsgruppe Georg von Holtzbrinck GmbH's Macmillan.

On Feb. 17, the appeals court in New York upheld the proposed settlement, which had been challenged by an e-books purchaser.

The publishers were concerned about the price of e-books being pushed down by Amazon while Apple was looking for a way to make its new iPad product a hit and was seeking to break up Amazon's low-cost dominance in the digital book market.

Apple and the publishers agreed on an arrangement in which Apple would get a 30 percent commission and publishers were allowed to set the prices for their books, a tactic known as "agency pricing" that prevents discounting.

The publishers also agreed they would charge all outlets the same amount, meaning Amazon was forced to raise its prices. E-books that had cost $9.99 suddenly cost $12.99 or $14.99.

Amazon said in a statement it was "ready to distribute the court-mandated settlement funds to Kindle customers as soon as we're instructed to move forward."

Apple did not respond to requests for comment.

The case is Apple v. United States, U.S. Supreme Court, No. 15-565.

[Siege]

Crony capitalists are as enemies of free market capitalism as the collectivists.

It is the government role to be an arbiter, not a player, in a free market environment, to enforce the rules and make sure the big fish does not distort free competition.

Good to see it worked this time.

And no, Apple is not evil, it just trying to cheat for their own advantages. It is the government role to make it expensive enough to discourage this kind of behavior.

[The Brain]

So, should Apple choose to abide by the verdict?

[garbon]

[Admiral Yi]

Crony capitalists are as enemies of free market capitalism as the collectivists.

This case doesn't have anything to do with crony capitalism.

[Martinus]

So, should Apple choose to abide by the verdict?

[grumbler]

So, should Apple choose to abide by the verdict?

Dunno.  What if North Korea wants $9.99 ebooks as a result?

[Razgovory]

Crony capitalists are as enemies of free market capitalism as the collectivists.

This case doesn't have anything to do with crony capitalism.

I think "crony capitalism" has become to ardent Freemarketiestas what the phrase "deformed worker's state" was to communists.  A useful excuse for the failures of their ideology.

[DGuller]

Crony capitalists are as enemies of free market capitalism as the collectivists.

This case doesn't have anything to do with crony capitalism.

I think "crony capitalism" has become to ardent Freemarketiestas what the phrase "deformed worker's state" was to communists.  A useful excuse for the failures of their ideology.

Not really.  While this term is not new, it certainly entered the public's jargon fairly recently.  Therefore it's easy to not recognize that this term doesn't refer to all the ways that professed free market ideology can lead to inefficient results.

[Razgovory]

I've seen it adopted by libertarians and used whenever the market fails to bring an optimal result.  While used by others for different reasons, it seems to be used by Free market fundamentalists as a "safe" way to acknowledge obvious failures without undermining the ideology.

[DGuller]

Well, yeah, there is always that "the market failed because the government is still too involved" BS.

[grumbler]

Well, yeah, there is always that "the market failed because the government is still too involved" BS.

Copyright is an example of massive government interference in the market.  By law, entry into the market to publish, say, the Harry Potter books is restricted to the copyright holder.  This is done for good reason, but the Apple deal on ebooks wouldn't have been possible sans government intervention in the market.

So, all the whining about market failure is totally misplaced here.

[DGuller]

Well, yeah, there is always that "the market failed because the government is still too involved" BS.

Copyright is an example of massive government interference in the market.  By law, entry into the market to publish, say, the Harry Potter books is restricted to the copyright holder.  This is done for good reason, but the Apple deal on ebooks wouldn't have been possible sans government intervention in the market.

So, all the whining about market failure is totally misplaced here.

It's a market failure of a different kind.  Any product with high fixed costs and zero variable costs is not well-suited for free market.  Without copyright you have one kind of market failure, with copyright you have a different kind.  There is no middle ground her, it's purely "pick the lesser of two evils" situation.