Name: Emmanuel

Topic: Science/Technology

Title: US sues Apple and publishers over e-book prices

Publisher: BBC

Date of Publication: April 11th, 2012

Length: 717 words

Apple sells E-books, or electronic books on its IBooks platform to iphones and ipads. However, while physical books' prices are set by the publishers at 50% the cover price, and decided by the retailer. In this model, which they called the "aikido move", designed partly by Steve Jobs, the publisher sets the price and received 30% of it. The goal was to stop Amazon from completely controlling the e-book market with its kindle. However, publisher Macmillian, Penguin, and Apple are being sued by the the US Department of Justice for "for conspiring to end e-book retailers' freedom to compete on price" (BBC). As a result, consumers are tricked into paying more than they should have for a title. The publishers and Apple teamed up as defendants, claiming the settlement the Department of Justice was requesting were too demanding, and would in effect completely make their model worthless and allow Amazon to become a monopoly of e-books.

As technology expands, new types of businesses arise everywhere. One of the main concerns of the U.S. economy is to prevent monopolies, which can result in price fixing. Price fixing is when a company conspires with others to move prices all-together up in order to make larger profits all-together. Many times, when monopolies are created, the government has to split them to make sure the economy stays balanced. Some speculate a bias because Apple just surpassed its net worth to $600 billion, becoming the world's most valuable firm, and controls too many markets.

In my opinion, Apple and its publishers is just trying to balance the e-book market with Amazon. However, with Amazon being so popular, appealing customers to switch required a stronger marketing strategy. While I agree that the Department of Justice should fight monopolies, it seems they are giving Apple no chance to compete with Amazon, thus creating a monopoly on the other hand.