• The Wall Street Journal reports that a Manhattan-based federal judge has approved a settlement between the US Department of Justice and three book publishers that resolves charge that they colluded with Apple Inc. to set pricing of e-books in a way that forced Amazon to stop discounting them. As part of the settlement, the three publishers have agreed to terminate their agreements with Apple and to make no effort to limit anyone;'s ability to discount e-books for two years.
Meanwhile, the agreement does not affect Apple and two other major publishers, all of which are prepared to go to court next year to defend themselves from antitrust charges.
When Apple got into the e-book business, it established what is called an "agency model" - it took 30 percent of the sale prices, but let the publishers set that price. The publishers then forced Amazon to accept the same model, which resulted in higher e-book prices on its site.
Meanwhile, the agreement does not affect Apple and two other major publishers, all of which are prepared to go to court next year to defend themselves from antitrust charges.
When Apple got into the e-book business, it established what is called an "agency model" - it took 30 percent of the sale prices, but let the publishers set that price. The publishers then forced Amazon to accept the same model, which resulted in higher e-book prices on its site.
- KC's View:
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This is one of those cases that I just don't understand. If three of five publishers have already agreed that they illegally colluded with Apple, how the hell do Apple and two other publishers deny it? And won't those three publishers feel a little silly if Apple actually wins the case? Apple has said that any settlement is premature because it takes place "before a single document has been introduced into evidence, before any witness has testified, and before the court has resolved the disputed facts."
It is mostly interesting to me, however, because it speaks to the power struggle taking place between Apple and Amazon, which could have enormous technological and commercial implications down the road.
