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steve jobs ebook conspiracy case

Short Bytes: Apple must pay $450 million to end an ongoing antitrust suit dealing with the allegations that Steve Jobs asked book publishers to change book pricings to promote the newly-released iPad. The federal court also appointing a monitor to ensure that Apple changes its shady business practices. The American Supreme Court rejected Apple’s appeal to overturn the lower court’s decision.

The Supreme Court of the United States has rejected Apple’s appeal that challenged a lower court’s ruling that iPhone-maker orchestrated a scheme with five book publishers to increase the price of e-books. As a result, Apple must settle this e-book anti-trust case by paying $450 million.

The Supreme Court justices turned away Apple’s appeal without any comment and left the federal court’s previous decision intact. This ruling has favored more than 30 states and the U.S. Justice Department that sued Apple.

The $450 million will be divided as follows: Apple will pay $400 million to the e-book consumers, $30 million in legal fees, and $20 million to the states. The consumers, who overpaid for the e-books, will get credits that will be applicable in their future purchases.

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“Apple’s liability for knowingly conspiring with book publishers to raise the prices of e-books is settled once and for all,” said the Justice Department in a statement.

Talking about this case’s history, Apple was accused of devising a new price-fixing method as a part of the 2010 introduction of its iPad and iBookstore feature. This step was seen as Apple’s move to gain an edge over Amazon. The federal judge found out that Steve Jobs persuaded five biggest book publishers to increase the price of e-book best sellers up to 40 percent.

The federal court also appointing a monitor to ensure that Apple changes its shady business practices.

In its following appeal in the Supreme Court, Apple said that it increased the market competition, thus decreasing the overall prices. “Following Apple’s entry, output increased, overall prices decreased, and a major new retailer began to compete in a market formerly dominated by a single firm,” Apple said in its appeal.

Before the settlement, the states and consumers have recovered $166 million from the five culprit publishers — Hachette Book Group Inc., HarperCollins Publishers LLC, Simon & Schuster Inc., Penguin Group and the Macmillan unit of Verlagsgruppe Georg von Holtzbrinck GmbH.

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