Last October Apple asked the U.S. Supreme Court to overturn an appellate court decision that found the company conspired with five publishers to increase e-book prices. However, the high court has said “no.”
The Cupertino, California-based company must pay $450 million to end the antitrust suit after the Supreme Court refused to question a finding that the company orchestrated a scheme to raise the prices for electronic books, reports Bloomberg. The justices turned away an appeal by Apple, leaving intact a federal appeals court ruling favoring the U.S. Justice Department and more than 30 states that sued.
Let's back up and look at history of the whole matter. In April 2012 the United States Department of Justice filed an antitrust lawsuit against Apple, Hachette SA, HarperCollins, Macmillan, Penguin and Simon & Schuster in New York district court, claiming collusion over ebook pricing. The brouhaha centers on Apple’s move to change the way that publishers charged for e-books as it prepared to introduce its first iPad in 2010.
Traditionally, publishers sold books to retailers for roughly half of the recommended cover price. Under that “wholesale model,” booksellers were then free to offer those books to customers for less than the cover price if they wished.
Apple suggested moving to an “agency model,” under which the publishers would set the price of the book and Apple would take a 30% cut. However, Apple also insisted that publishers couldn’t let rival retailers sell the same book at a lower price.