Apple’s agency pricing maneuver costs it in price fixing suit


As reported in Content Licensing, Federal District Court Judge Denise Cote’s ruling against Apple in the e-book price-fixing case was not really a surprise. Even before the three-week trial began, the judge had indicated her “tentative view” that the Department of Justice would be able to prove that Apple engaged  in a conspiracy with five major publishers to raise prices in the e-book market in 2010 in conjunction with the launch of the iPad.

When Apple entered the market, it offered publishers the ability to set their own prices, as “agency pricing;” the Apple contracts called for publishers to get 70% of the retail price and Apple 30%. The Wall Street Journal reports overnight, national best-sellers went from $9.99 on Amazon Kindle to $12.99 and $14.99.

The government could document an immediate and sharp rise in the average price of new e-books in the wake of Apple’s introduction of agency pricing to the market. It also had what seemed to be incriminating emails authored by Steve Jobs. And, the (alleged) co-conspirators had already settled the charges against them and had agreed to testify against Apple.


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