Apple is on the hook now to the tune of $400 million to consumers after the U.S. Supreme Court declined to take up an appeal of an adverse decision against the tech company by the U.S. Court of Appeals for the Second Circuit. The appellate court upheld a lower court ruling that Apple conspired to fix the prices of some e-books in in violation of the Sherman Antitrust Act. The justices did not comment in rejecting Apple’s bid for certiorari.
The Justice Department sued Apple in 2012, asserting the Cupertino tech giant led a horizontal conspiracy among publishers, who were frustrated with Amazon’s low prices, to raise e-book prices. The parties sought to raise prices above Amazon’s standard $9.99. To do this, Apple introduced a “agency pricing,” where publishers set the e-book price, and then Apple would get a percentage of each sale. The publishers settled before trial, but Apple held out. The 2013 trial took a month. The most damaging evidence was an email from Steve Jobs, then CEO and Apple co-founder, stating: “I can live with this, as long as they move Amazon to the agent model too for new releases for the first year. If they don’t, I’m not sure we can be competitive.” The appellate court upheld the lower court in a 2-1 decision in 2015.
Apple had argued that its entry into e-publishing created “long-term competition” and “disrupted a monopoly,” despite “previous prices [that] were artificially high or artificially low.” But the appellate court ruled that: “Competition is not served by permitting a market entrant to eliminate price competition as a condition of entry, and it is cold comfort to consumers that they gained a new e-book retailers at the expense of passing control over all e-book prices to a cartel of book publishers.” Some e-book buyers may expect refunds in the next few months.
Justices also reject Batmobile appeal
In another closely watched case, the justices recently rebuffed without comment an appeal by an auto designer who was found by lower courts to have infringed on DC Comics’ copyrights by creating replicas of the iconic Batmobile. The U.S. Ninth Circuit Court of Appeals had upheld a lower court’s summary judgement against the designer. He and others complained that the rulings by the trial and appellate court had extended copyright to cars, as never had occurred before and with judges rather than legislators creating copyright law.