Apple’s lawyers should be having a great holiday season, as the legal fees keep flowing from the Cupertino firm. The company is defending their iPod DRM in a class action suit, and today they also kickoff their appeal of the 2013 e-books verdict.
The court ruled that Apple was guilty of anti-competitive practices in two ways. First, the company asked publishers to switch from wholesale pricing – where publishers sold in bulk to retailers, who set their own prices – to an agency model, where publishers set retail prices and retailers took a commission. The court ruled that this reduced price competition …
Apple had also negotiated a “Most Favored Nations” deal where publishers were not allowed to offer better terms to other sellers than those they offered to Apple. The court ruled this reduced pricing competition, as other retailers – such as Amazon – may have been able to negotiate lower pricing, likely passing the savings on to its customers.
Apple argues that its presence in the book market has actually increased competition, especially as Amazon was dominating the e-books market when Apple entered it with their iBooks platform. Apple also argues that some e-book prices actually need to rise, to make the market more attractive to publishers.
If Apple loses its appeal, a final damages amount of $450 million has already been pre-approved by the court.
