Apple fights manipulation claims on e-book prices

Jun 05, 2013 by Larry Neumeister

Apple Inc. defended itself Tuesday against claims that the computer giant manipulated electronic book prices and stifled competition when it opened an online bookstore three years ago.

An attorney for the company, Orin Snyder, questioned David Shanks, the top executive at publisher Penguin Group USA, during the second day of an anti-trust resulting from a lawsuit brought last year by the Justice Department.

The Penguin said "irrational enthusiasm" about the potential for 80 million to 100 million Apple customers to buy books online led the company to meet many of Apple's demands in 2010.

Snyder was trying to rebut government claims that Apple and five conspired to eliminate .com's $9.99 bargain price for popular e-books by agreeing to a pricing policy that forced millions of consumers to pay more than they should have for most online books.

Apple has insisted that its entrance into the e-book market improved the online book industry and stabilized prices in the long term.

Under questioning by Justice Department lawyer Mark Ryan, Shanks said Penguin was not pleased that Amazon was selling its electronic books below cost before Apple entered the market since the publisher tried to maintain "a fairly delicate ecosystem in publishing where we are trying to have everybody make a profit: the author, the publisher and the reseller."

Penguin, the last of five publishers to settle its case with the government, tried to maintain a pricing agreement with Amazon that would enable the online megastore to continue its $9.99 price for e-books but had to change its position once Barnes & Noble—then the second largest seller of e-books—entered the market with a pricing scheme similar to Apple's, Shanks testified. He said Penguin otherwise would have risked losing money.

Shanks said the negotiations with Apple were not unlike many of the other 100 or so negotiations he has conducted in his 35 years in the book publishing industry.

Now, he testified, Penguin is better able to project its sales of hardbacks, paperbacks and e-books, in part because the industry is established and more predictable and because it is clear the number of printed books is decreasing. The company agreed in a deal announced last month to pay $75 million to settle claims against it.

Explore further: Tech-industry perks long associated with Bay Area being replicated across LA

1 /5 (2 votes)
add to favorites email to friend print save as pdf

Related Stories

Apple enlists Winnie-the-Pooh in e-book argument

Jun 04, 2013

(AP)—An Apple Inc. lawyer is using Winnie-the-Pooh and tens of millions of customers too to try to convince a judge that the computer giant did not manipulate e-book prices when it opened an online bookstore.

Penguin joins settlement in US e-books lawsuit

Dec 18, 2012

Penguin Group has agreed to join three other publishers in a settlement of a US government lawsuit alleging an e-book price-fixing conspiracy with Apple, officials said Tuesday.

Apple ebook price-fixing trial opens

Jun 03, 2013

The US government's trial against Apple, accused of leading a conspiracy to fix prices of electronic books, opened Monday in New York.

Recommended for you

Will Apple Pay be mobile pay's kick-start?

6 hours ago

If anyone can get us to use our smartphones as wallets, it's Apple. That's what experts think about the recent launch of Apple Pay, the first mobile wallet to work on an iPhone.

Google execs discuss regulation, innovation and bobble-heads

8 hours ago

Eric Schmidt and Jonathan Rosenberg help run Google, one of the world's best-known, most successful - and most controversial - companies. They've just published a new book, "How Google Works," a guide to managing what they ...

LinkedIn reports 3Q loss but sales climb

9 hours ago

LinkedIn Corp. posted a third-quarter loss on Thursday, but its results were better than expected as revenue grew sharply, sending shares of the online professional networking service higher in extended trading.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.