Apple Inc. (NASDAQ:AAPL) will be seeking to overturn an earlier ruling where it was found to have colluded with publishers to increase the prices of e-books as a way of offsetting Amazon.com, Inc.(NASDAQ:AMZN)’s discounted business model. The latest push for justice for the company’s e-books segment comes barely days after Apple finalized submissions on another case where it is accused of fixing prices for iPods
The Cupertino-based company will be forced to pay $450 million should it fail on the appeals. The fine will mostly go to e-book consumers as part of the settlement and 33 states that are entangled in the lawsuit that dates back to 2012. Apple Inc. (NASDAQ:AAPL) lawyers argue that an earlier ruling only focused on the negative aspects of the company entering the e-book space and not the fact that it entered to reduce Amazon’s dominance.
Apple Inc. (NASDAQ:AAPL) entered the electronic book space in 2010 in a move that founder, Steve Jobs, believed was an Aikido against Amazon, which controlled majority of the market share in the space. The three-judge bench will seek to determine whether deals that Apple signed amounted to deft movement in the space or were an illegal conspiracy in terms of pricing.
Apple Inc. (NASDAQ:AAPL) is believed to have engaged in unprofessional practices with a view of gaining an advantage against Amazon, which at the time controlled between 80% and 90% of the total market share. Publishers at the time are believed to have been disgruntled by Amazon’s move to lower e-book prices something that affected their profits.
According to evidence presented during the trial, Apple Inc. (NASDAQ:AAPL) officials colluded with a number of publishers signing contracts that gave the publishers the rights to set the prices. The agreements, on the other hand, required publishers to give Apple the best prices on each e-book. The move intended to force Amazon to change its business model otherwise it would have incurred losses amounting to the discounts it was offering at the time.
Apple Inc. (NASDAQ:AAPL) has already admitted that its executives met with a number of publishers who discussed the frustrations of Amazon’s discounts that only went to affect margins. The prices for new e-books increased, as a result, despite the fact that the average price across the industry had decreased.
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