In a sweeping rejection of Apple Inc’s strategy for selling electronic books on the Internet, a federal judge ruled that the company conspired with five major publishers to raise ebook prices.
US District Judge Denise Cote in Manhattan found “compelling evidence” that Apple violated federal antitrust law by playing a “central role” in a conspiracy with the publishers to eliminate retail price competition and raise ebook prices.
Wednesday’s decision could expose Apple to substantial damages. It is a victory for the US Department of Justice and the 33 US states and territories that brought the civil antitrust case. The five publishers previously settled.
Apple was accused of conspiring to undercut Amazon.com Inc’s ebook dominance, causing some ebook prices to rise to US$12.99 or US$14.99 from the US$9.99 that Amazon charged. Amazon once had a 90 percent market share.
“Apple chose to join forces with the publisher defendants to raise ebook prices and equipped them with the means to do so,” Cote said in a 159-page decision. “Without Apple’s orchestration of this conspiracy, it would not have succeeded as it did.”
The decision was not a total surprise, as Cote had indicated before the two-and-a-half-week non-jury trial began on June 3 that Apple’s defenses might fail.
“This result is a victory for millions of consumers who choose to read books electronically,” Bill Baer, head of the Justice Department’s antitrust division, said in a statement. “This decision by the court is a critical step in undoing the harm caused by Apple’s illegal actions.”
Baer said Cote’s decision, together with the earlier settlements, help consumers by reducing prices of ebooks.
Cote set an Aug. 9 hearing to discuss remedies, and plans to hold a trial on damages. She also ordered both sides “to pursue settlement discussions” under the supervision of her colleague, US District Judge Kimba Wood.
Amazon now controls about 65 percent of the ebook market, while Barnes & Noble Inc has about 20 percent and Apple a single-digit percentage, according to Albert Greco, a book industry expert at Fordham University’s business school.
In a statement, Apple said it would appeal Cote’s decision.
“Apple did not conspire to fix ebook pricing,” spokesman Tom Neumayr said. “When we introduced the iBookstore in 2010, we gave customers more choice, injecting much needed innovation and competition into the market, breaking Amazon’s monopolistic grip on the publishing industry. We’ve done nothing wrong.”
Last year, Apple settled a separate antitrust case over ebook pricing with the European Commission, without admitting wrongdoing.
Leading Taiwanese bicycle brands Giant Manufacturing Co (巨大機械) and Merida Industry Co (美利達工業) on Sunday said that they have adopted measures to mitigate the impact of the tariff policies of US President Donald Trump’s administration. The US announced at the beginning of this month that it would impose a 20 percent tariff on imported goods made in Taiwan, effective on Thursday last week. The tariff would be added to other pre-existing most-favored-nation duties and industry-specific trade remedy levy, which would bring the overall tariff on Taiwan-made bicycles to between 25.5 percent and 31 percent. However, Giant did not seem too perturbed by the
AI SERVER DEMAND: ‘Overall industry demand continues to outpace supply and we are expanding capacity to meet it,’ the company’s chief executive officer said Hon Hai Precision Industry Co (鴻海精密) yesterday reported that net profit last quarter rose 27 percent from the same quarter last year on the back of demand for cloud services and high-performance computing products. Net profit surged to NT$44.36 billion (US$1.48 billion) from NT$35.04 billion a year earlier. On a quarterly basis, net profit grew 5 percent from NT$42.1 billion. Earnings per share expanded to NT$3.19 from NT$2.53 a year earlier and NT$3.03 in the first quarter. However, a sharp appreciation of the New Taiwan dollar since early May has weighed on the company’s performance, Hon Hai chief financial officer David Huang (黃德才)
UNPRECEDENTED DEAL: The arrangement which also includes AMD risks invalidating the national security rationale for US export controls, an expert said Nvidia Corp and Advanced Micro Devices Inc (AMD) have agreed to pay 15 percent of their revenue from Chinese artificial intelligence (AI) chip sales to the US government in a deal to secure export licenses, an unusual arrangement that might unnerve both US companies and Beijing. Nvidia plans to share 15 percent of the revenue from sales of its H20 AI accelerator in China, a person familiar with the matter said. AMD is to deliver the same share from MI308 revenue, the person added, asking for anonymity to discuss internal deliberations. The arrangement reflects US President Donald Trump’s consistent effort to engineer
NVIDIA FACTOR: Shipments of AI servers powered by GB300 chips would undergo pilot runs this quarter, with small shipments possibly starting next quarter, it said Quanta Computer Inc (廣達), which supplies artificial intelligence (AI) servers powered by Nvidia Corp chips, yesterday said that AI servers are on track to account for 70 percent of its total server revenue this year, thanks to improved yield rates and a better learning curve for Nvidia’s GB300 chip-based servers. AI servers accounted for more than 60 percent of its total server revenue in the first half of this year, Quanta chief financial officer Elton Yang (楊俊烈) told an online conference. The company’s latest production learning curve of the AI servers powered by Nvidia’s GB200 chips has improved after overcoming key component
RSS