Apple, the maker of the iPod, iPad, and iPhone, has been found guilty of conspiring with major book publishers to artificially raise e-book prices. A court in New York City passed down this ruling last week saying that the electronics giant worked with six major publishers to raise prices when it broke into the e-book industry in 2010. The victim of this price fixing? Consumers who had to bear the brunt of the cost, and Amazon, who through pressure from publishers, were forced to raise prices from their original $9.99 price point.
While Apple was found guilty, the court says that Apple worked hand in hand with publishers to bring an end to the $9.99 e-book, specifically targeting Amazon and its customers. This cooperation led to Amazon being forced to raise its prices and leave customers wondering why their e-books were rising in price inexplicably.
Apple has of course denied that they took part in any wrongdoing, and insist that they in fact brought innovation to the e-book market with the iPad and the iBookstore. To this day the e-book market is still dominated by Amazon, and it's device, the Kindle.
The plan was to unfold as such. Essentially, Apple struck something called "agency agreements" with the major publishers. Once these agreements were in place, they effectively legitimized the raising the prices. The next step in the plan consisted of the publishers going to Amazon with a take it or leave it agreement. Lost in all of this is the fact Amazon actually sells e-books at a loss, as they are in fact trying to establish the e-book as the premier method of obtaining the written word. Something big book publishers did not like.
Ultimately Apple chose to go to court, while five of the major publishers settled out of court. Further court hearings are scheduled to decide damages, but appeals are expected to slow down the process dramatically.