Why the Apple Ebook Verdict Could Make You Love Libraries Again

Apple has been found guilty of conspiring with book publishers to fix ebook prices in an effort to challenge Amazon’s dominance.

Claiming that the decision will have a “chilling effect” on how companies make deals for digital media including music and movies as well as books, Apple insists that it has done nothing wrong.

The decision is not likely to translate into any concrete changes for consumers, at least in the immediate future.

If anything, the lawsuit has rather laid bare the greed of the publishers and the extent to which their “paranoia about ebook piracy has given vast power to the online sellers,” as Dan Gillmor writes in the Guardian.

Both Amazon and Apple have instituted “draconian DRM (digital rights management)” that can restrict what devices an ebook can be displayed on; such rules can make one feel something like nostalgia for books that can pass through many pairs of hands until their pages fall out.

The central issue in the Department of Justice’s antitrust suit was how the prices of ebooks are set.

Before Apple decided to enter the market, publishers followed the wholesale model for selling paper books. Under this, retailers (i.e., Amazon) pay a set wholesale price and then sell the ebooks at whatever price they choose. A mega-retailer (i.e., Amazon) has accordingly been able to offer bestsellers at very low prices ($9.99).

Publishers have been none too happy about Amazon offering such low prices and being able to, in effect, monopolize the online book market. Small wonder (from a business, and a profit, perspective), that publishers wanted to sell books via another model, one that Apple then introduced.

Under Apple’s “agency” model, publishers were to be able to decide on the retail price of an ebook and collect a percentage of the sales. They would therefore retain more control over prices.

As emails of meetings with publishers reveal, Apple not only colluded with them to set prices. It also had publishers agree that they would not sell ebooks to retailers who would price them lower than the publishers wanted to. Such an arrangement could effectively shut out Amazon from offering hundreds of titles unless it too raised its prices.

A glance at Manhattan Judge Denise Cote’s ruling(.pdf), which quotes extensively from testimony and from Apple executives’ emails (especially that of Steve Jobs), paints a not very pretty picture about the extent to which Apple and the publishers banded together to eliminate any retail competition for ebooks.

Jobs knew very well that Apple’s entering the ebook market at the time the iPad was introduced would push prices up; he was equally aware of publishers being displeased at Amazon’s low prices. Judge Cote noted how Apple “convinced” one publisher, Random House, to acquiesce to its pricing preferences:

In an email to Jobs, [Apple executive Eddy] Cue attributed Random House’s capitulation in part to “the fact that I prevented an app from Random House from going live in the app store this week.

The antitrust suit, one of the biggest that U.S. federal authorities has ever brought, reveals Apple to be more of a bully (and a greedy one at that) than its image as that friendly company offering smart solutions for our every activities, the New York Times observes.

Judge Cote has ordered another hearing to determine damages. Five of the publishers who had been named as defendants in the original antitrust suit have already settled with the DOJ; Apple remains defiant and is planning to appeal.

But a consumer may well be left wondering what all the fuss has really amounted to. Prices on ebooks on Amazon have for the most part continued to rise and consumers have no choice but to abide by the limitations on what sort of device an ebook can be read that are laid down by Apple and Amazon.

The disputes about ebooks and the selling of digital media are not at all over, either.

All the more reason that readers may find cause to refresh their acquaintance with not only books but with libraries whose content can be borrowed by many, for an umpteen amount of times. After all, do we really need need to get ecopies of every single book as soon as they are published?


Photo via JoeInQueens/Flickr


Jim Ven
Jim Ven5 months ago

thanks for the article.

Jim Ven
Jim Ven5 months ago

thanks for the article.

Catherine A.
Catherine A.about a year ago

I feel happiness to read the content that you are posting.Daily Living Ebooks

Kathy Perez
Kathy Johnson3 years ago

real books for the win. they want to raise prices so a world already lacking in education can be even less likely to move forward. books are so important

Vesna K.
Past Member 3 years ago

My previous comment was cut short:
Canada has an illiterate and semiliterate population estimated at 42% of the whole, a proportion that mirrors that of the United States.
So, WAKE UP, America and start reading.

Vesna K.
Past Member 3 years ago

Avril V. gave us these astonishing data:

"US paper consumption has more than tripled since 1960, with the typical American now using 347 kilograms of paper every year – more than 50 times the amount the average African uses...In the UK today, nearly 5 million tonnes of paper are being dumped in landfill or incinerated each year. On average, each household in the UK throws away 2-3 kg of newspaper and magazines each week..."
My comment is: increase in paper consumption has nothing to do with book publishing and reading habbits of the world population. On the contrary.

For all of you here, please read the following paragraph from EMPIRE OF ILLUSION by Chris Hedges (published in 2009):
"Functional illiteracy in North America is epidemic. There are 7 million illiterate Americans. Another 27 million are unable to read well enough to complete a job application and 30 million can't read a simple sentence. There are some 50 million who read at a for-or fifth-grade level.
Nearly a third of the nation's population is illiterate or barely literate - a figure that is growing by more than 2 million a year. A third of high-school graduates never read another book for the rest of their lives, and neither do 42% of college graduates. In 2007, 80% of the families in the United States did not buy or read a book. And it is not much better beyound our borders. Canada has an illiterate and semiliterate population estimated at 42% of the whole, a proportion that mirrors that of the

Vesna K.
Past Member 3 years ago

I don't remember how and when I started to read comments on Care2 different sites, but very soon I was able to create a pretty accurate picture of the majority of its members: illiterate, uninformed, unable to write or construct a simple sentence, or just too lazy, rude, bad mannered and without any original thought. I checked other sites and it was the same.


Vesna K.
Past Member 3 years ago

I don't remember how and when I started to read comments on Care2 different sites, by very soon I was able to create a pretty accurate picture of the majority members: illiterate, uninformed, rude, unable to write/construct a normal sentence, bad mannered or simply to lazy or without any original thought. I checked other sites and the picture was the same.

The 21st century is an era of illiterate, uneducated, bad mannered population. Digital books?
Really? Those who read (do not pose on public transport with Kindle) read books printed on paper either paperback or hardcover. They go to bookshops and libraries and yes, they can spell and write and they are informed. All of you here who's sentences consist of; LOL, TY, Yea, Hm, Noted, etc proved to be completely incapable of holding any kind of conversation and the worst of all - you are illiterate. SMS generation is a generation that cannot read, write, speak or argue. The other real problem is SMS generation's inability to think: you cannot think if you don't have facts and you know facts if you read. SMS generation replaces reading with gossip, information with ad campaigns and has very little to offer.

So, wake up America! UNPLUG yourselves from your IPhones, IPads, MP3 or MP4 players and TAKE A BOOK! A real book, you know, the one with pages that you can turn and underline an important or interesting fact.

Amandine S.
Past Member 3 years ago

I prefer real books, personally.

Filia Lunae
Filia Lunae3 years ago

This is why I LOVE my Nook