Last June, the New York-based 2nd U.S. Circuit Court of Appeals definitively determined that Apple, together with a number of publishers, engaged in a price-fixing conspiracy, violating federal antitrust laws.
Apple and the publishers found themselves ar the center of a controversial e-book price-fixing case. Through the course of the issue, and as tensions rose, the publishers ultimately settled, but Apple opted to take its case to the high court.
The e-book price-fixing case was sparked back in 2010 when Apple entered the digital books marketplace. Prior to the company's entry, the e-book market was all but dominated by yet another tech giant, Amazon, and its ubiquitous Kindle E-Reader. Books purchased through the Amazon store were immensely affordable, with Kindle editions of books being sold at almost rock-bottom prices.
Amazon and its customers loved the business model, but a number of publishers hated it. Unfortunately for the publishers, Amazon practically had a monopoly on the e-book market, with competitors such as Barnes & Noble failing to make a significant dent in the company's e-book revenue.
All this changed when Apple entered the market, however. When Apple entered the scene with its iPad device and its dedicated iBooks app, publishers were overjoyed. With Apple's popularity in the market, it could be a serious competitor to Amazon. Plus, Apple allowed publishers to set their own prices, with the tech giant taking a cut from each purchase.
Known as "agency pricing," Apple's tactic practically prevented discounting on e-books. Publishers were finally able to charge more for their e-books, ultimately forcing Amazon's hand and raising e-book prices significantly. When Apple entered the fray, e-books that previously sold for $9.99 on Amazon ended up being priced at $12.99, in some cases even as high as $14.99.
When the case went to court, Apple fought tooth and nail. However, the company's efforts were shot down by U.S. District Judge Denise Cote in a 2013 ruling when she determined that Apple played a "central role" in a conspiracy to increase e-book prices.
Refusing to give up and despite the added ruling from the 2nd Circuit back in June, Apple nonetheless filed an appeal. Unfortunately for the company, it seems like its battle in the e-book market is over, and for the first time in quite a while, Apple has found itself on the losing side.
