Dead Steve Jobs is still a crook – and Apple must cough up $450m for over-pricing ebooks
US Supreme Court snubs Cupertino's final appeal
Apple's long and stubborn efforts to avoid the sting of ebook price-fixing probe and an accompanying $450m fine have finally ended: the US Supreme Court has decided not to hear the iTunes giant's appeal.
The Cupertino titan lost its case back in 2013 after it was found guilty of conspiring with publishers Macmillan, Hachette, Penguin, HarperCollins and Simon & Schuster to hike ebook prices.
The price-fixing occurred in 2010 when Apple was trying to enter the ebook market with iPads and was competing head-on with Amazon. Under the deal, brokered by Apple's then-CEO Steve Jobs, the publishers set the price, Apple took a 30 per cent cut, and they were not allowed to offer anyone else a lower price.
All five publishers settled before the case went to trial in New York, but Apple refused to do so and stood before a jury by itself.
That stubbornness has continued for three years, with Apple twice appealing the decision against it. Apple and its senior execs have claimed they did nothing wrong and argued their actions helped introduce competition by preventing Amazon from gaining a stranglehold on the market.
Eventually, Apple lost its case: Judge Denise Cote rejected the anti-trust argument, noting "another company’s alleged violation of antitrust laws is not an excuse for engaging in your own violations of law." The federal judge decided that Apple's actions had put up the price of ebooks for readers and was an attempt to eliminate Amazon from the market.
More than a year later, and while Apple was appealing for the first time, a settlement of $450m – with $400m of it going to customers who had paid too much – was agreed. Apple was also forced to allow a government-appointed watchdog into the company to look at its books and ensure it was not carrying out any other illegal price fixing.
Six months later and the watchdog was formally complaining that Apple was not cooperating; Apple responded by trying to get him fired. More than a year after that, the judge finally pulled the watchdog out noting that "the Monitor has faced a challenging relationship with Apple" but saying that he had managed to revamp the company's compliance program.
Apple lost its appeal in June 2015 and responded by denying the price-fixing charge. "Apple did not conspire to fix ebook pricing and this ruling does nothing to change the facts," it told The Reg in an emailed statement, adding: "We are disappointed the Court does not recognize the innovation and choice the iBooks Store brought for consumers. While we want to put this behind us, the case is about principles and values. We know we did nothing wrong back in 2010 and are assessing next steps."
So it appealed to the Supreme Court and that appeal was rejected too. In short, Apple finally has to cough up $450m after three years of fighting and losing, and people who bought over-priced ebooks on their iPad in 2010 should be getting refunds. ®