Monday, 29 July 2013

Apple Supreme Court Antitrust Case

The Supreme Court Antitrust Case is based on collusion between Apple and other book retailers to collectively make deals with publishers, wherein publishers set minimum prices for books, and the retailers take a share of profits. This was done to resist Amazon's $9.99 pricing model for new paperbacks, which made it difficult for competitors to offer an attractive pricing proposition to consumers- because, as publishers claimed, $9.99 was not enough to cover costs.

This type of collusion does seem to be a clear Antitrust case, but it is not so. Some claim that the Court is going after the wrong party. After all, Apple, Nook and the other defendants were reacting to a predatory move by monolith Amazon, and thus spurring competition in the industry- resulting in lower prices overall. Why were the scrappy newcomers being charged for trying to compete with an overbearing industry heavyweight?

On the other hand, Amazon has risen to dominance due to its convenient interface and vast product offering. Perhaps this collusion is just as much as publishers trying to retain importance, as it is new eBook sellers trying to gain a foothold.


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