Apple was found guilty of conspiring to fix the price of E-books (digital books which can be downloaded onto an E-Reader such as a Kindle), but the technology firm has vowed to appeal following the ruling on Wednesday 10th.
The case was brought in 2012 against Apple as well as HarperCollins, Macmillan Publishers, Penguin Books, Simon & Schuster, and Hachette Book Group, Inc in the US by the United States Department of Justice.
The publishers agreed to settle out of court paying almost $100 million in damages which will eventually be refunded to customers in the US via the online accounts they used to purchase the price-fixed E-books.
Apple denied any wrongdoing and chose to take the case to court but was found guilty earlier this week. The judge said they had encoruaged publishers to switch to a business model which would stop Amazon from offering E-books at lower prices. By forcing up the price of content Apple believed they would be better placed for the iPad to compete with the Kindle as an E-reader as Amazon would no longer be able to offer lower prices to Kindle users.
Under the old system publishers had provided E-books to suppliers like Amazon on a wholesale basis leaving them free to set their own prices. Apple was found to have conspired with publishers to switch to an ‘agency model’ which would allow publishers to set the price with E-book sellers claiming a commission for each copy sold, forcing Amazon to raise their prices.
An excerpt from the ruling, available on the New York Times website, explained Apple’s motivation for organising the price fixing, stating, “Apple, quite simply, did not want to compete with Amazon on price. Apple was confident that the iPad would be a revolutionary and wildly popular device. It was happy to compete with Amazon on that playing field, where it believed its strength resided. It would match its device ‘ the iPad ‘ against the Kindle.”
Apple have released a statement regarding the ruling, saying “Apple did not conspire to fix ebook pricing and we will continue to fight against these false accusations. When we introduced the iBookstore in 2010, we gave customers more choice, injecting much needed innovation and competition into the market, breaking Amazon’s monopolistic grip on the publishing industry. We’ve done nothing wrong and and we will appeal the judge’s decision.”