Apple Inc. (AAPL): Justice Says This Scheme Was Steve Jobs’ Idea

Apple Inc. (NASDAQ:AAPL) is certainly no stranger to controversy or courtrooms. Its attorneys might even be on a first-name basis with U.S. government attorneys by this point. With the money that gets spent in legal proceedings like these, chances are pretty good that Apple would much rather settle than not. Unless, of course, your company honestly believes it is innocent of all charges. It may be worth it, then, to fight for reputation and possibly lose than to roll over and concede.

Examining Apple's Forward ValuationIn a case that has made its share of headlines lately, Apple Inc. (NASDAQ:AAPL) is the one left standing when others have conceded, and the U.S. Department of justice is describing Cupertino now as the leader of an e-book price-fixing scheme involving five major publishing houses and Apple’s online e-book store, which had wanted to compete directly against Amazon.com Inc (NASDAQ:AMZN) a few years back, when the late Steve Jobs still ran Apple.

Afer some saber-rattling by Justice, all five publishing houses – Penguin, HarperCollins, Hatchette, Simon & Schuster and Macmillan – all caved and settled with Justice, leaving Apple Inc. (NASDAQ:AAPL) alone to defend itself. The company is apparently planning to defend itself vigorously, as the trial is set to start in early June with no indication that Apple is blinking from this staring contest.

In the court filing submitted Tuesday by Justice, Apple Inc. (NASDAQ:AAPL), for the first time since the initial suit was brought a year ago, is being charged with being the mastermind of the price-fixing scheme, which Justice claims was a move to undermine Amazon.com Inc (NASDAQ:AMZN) and its dominant position in e-book selling.

The charge is that Apple convinced the publishing houses to change their pricing model in such a way that Amazon.com would be forced to sell its e-books for $12.99 and up instead of its uniform $9.99 price, which would have been consistent with the pricing model for Apple in its e-book store. Justice was submitting an e-mail as part of its filing that came from the late Steve Jobs which apparently had indicated a leadership role by Apple when it said in the e-mail to HarperCollins’ James Murdoch, “Throw in with Apple and see if we can all make a go of this to create a real mainstream e-books market at $12.99 and $14.99.”

Apple Inc. (NASDAQ:AAPL) is also being accused of using strong-arm tactics to get the publishing houses on board with the scheme, alleging that some publishers were threatened with having apps rejected from the App Store if they didn’t cooperate with the idea, for example, Justice said in its filing. What do you think about the charges? Is Apple smart to take this case to trial? Give us your feedback in the comments section below.

DISCLOSURE: None

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!