Apple found guilty of ebook price-fixing

Now this is going to cause some SERIOUS tremors throughout the publishing world.

The tech giant’s defeat in a New York court is likely to cost the iPad and
iPhone maker hundreds of millions of dollars in damages. The technology giant battled the US Department of Justice in the landmark
case, heard last month in Manhattan, over whether a policy of allowing
publishers to set the price of ebooks broke America’s anti-trust laws.

On Wednesday District Judge Denise Cote, who oversaw the trial, said that
Apple was the ringleader in a conspiracy, which forced the price of ebooks
upwards from the $9.99 Amazon had set as standard to $12.99 and in some
cases $14.99.

“The plaintiffs have shown that the publisher defendants conspired with
each other to eliminate retail price competition in order to raise e-book
prices, and that Apple played a central role in facilitating and executing
that conspiracy,” Judge Cote said. “Without Apple’s orchestration of this conspiracy, it would not have
succeeded as it did in the spring of 2010,” she added.

The good news is that ebook prices should continue to fall to more economically sensible levels.  And the power of the gatekeepers is going to continue to dwindle as their revenues and profit margins continue to fall in response to the greater competition they are facing from independent publishers and self-publishers.

Another interesting thing is that for contractual reasons I am not at liberty to divulge, the major publishers will not be able to sell books through the in-game retail channel.  This will provide even more incentive for the big game developers to retain their media tie-in rights rather than continuing to license them to publishers unable to sell the books through their games.