Apple eBook appeal denied by Supreme Court
The US Supreme Court today denied Apple’s appeal of an appeals court’s ruling that Apple had conspired with major book publishers to raise the prices of eBooks. The Supreme Court, without comments, said it would not review the ruling, effectively ending this long saga and forces Apple to pay the $450 million settlement.
“We are ready to distribute the court-mandated settlement funds to Kindle customers as soon as we’re instructed to move forward,” Amazon said in a statement released to TNM.
The lawsuit dates back to 2012 when the Department of Justice accused Apple, along with Hachette, HarperCollins, Macmillan, Penguin, and Simon & Schuster, of conspiring to raise eBook prices, a reaction to Amazon’s practice of pricing eBooks at $9.99. The publishers one-by-one settled with the DOJ while Apple claimed it was not an active participant in a conspiracy (only the beneficiary of it). That argument never swayed the courts, especially when emails were found that seemed to spell out the details of meetings among the publishers.
“Our goal is to force Amazon to return to acceptable sales prices through the establishment of agency contracts in the USA,” read one email.
Meanwhile, Amazon, which argued that by pricing eBooks at this level was building sales for both them and the publishers, eventually agreed to let the publishers raise the prices of their eBooks. The result has been lower sales for eBooks published by these major publishers, essentially proving Amazon’s point.
The result is that Amazon still and maybe even more, dominates book and eBook sales.
The Supreme Court had been asked by Apple to review the ruling by the New York-based 2nd U.S. Circuit Court of Appeal, delivered last summer, which found for the DOJ. Few gave Apple much of a chance, but the Cupertino company seemed to feel that because it was not physically at the meetings held by publishers it was not engaging in illegal activity. Internal Apple emails, though, painted a picture of a company eager to take on Amazon in eBooks after it was set the launch of the original iPad.
That ruling was the result of Apple appealing the original U.S. District ruling that found against Apple.
“Apple and the Publisher Defendants shared one overarching interest — that there be no price competition at the retail level. Apple did not want to compete with Amazon (or any other e-book retailer) on price; and the Publisher Defendants wanted to end Amazon’s $9.99 pricing and increase significantly the prevailing price point for e-books,” wrote Denise Cote, Senior Judge of the United States District Court for the Southern District of New York in 2013.
Motivating the effort to work with the major book publishers was the desire on Apple’s part to lure eBook readers to their new tablet, launched in April of 2010.
In 2010, Amazon and Apple battled each other over whether the new iPad was the superior tablet for reading. Amazon, which had not yet launched its Kindle Fire, advertised extensively that the Kindle could be used to read digital media even at the beach; while the iPad, with its reflective glass display, was ill-suited for eBook reading.