After losing e-books case, has Apple lost its 'bite'?
A long-running legal dispute over whether Apple and five publishers had conspired to raise the price of e-books has likely reached its conclusion, with the Supreme Court declining to hear Apple鈥檚 challenge to an appellate court鈥檚 ruling on Monday.
The high court鈥檚 decision leaves in place a ruling by the 2nd Circuit Court of Appeals last June that found the tech giant played a 鈥渃entral role鈥� in the scheme and required Apple to pay $450 million as part of a settlement.
In a 2-to-1 ruling, the appeals court found that in trying to challenge Amazon鈥檚 entrenched dominance of the e-book market, Apple had colluded with the publishers to increase book prices in violation of federal anti-trust laws.
When it asked the Supreme Court to take up the case, Apple said the 2nd Circuit鈥檚 decision went against the high court鈥檚 existing precedent on the subject and would
The Justice Department applauded the court鈥檚 decision not to hear the case.
鈥淎pple鈥檚 liability for knowingly conspiring with book publishers to raise the prices of e-books is settled once and for all,鈥� Bill Baer, head of the US Justice Department's antitrust division, told Reuters.
In some cases, the Justice Department said the company鈥檚 plan had caused e-book prices to rise to $12.99 or $14.99 from the $9.99 typically charged by Amazon.
The two companies have long been in a quiet rivalry, particularly over sales of their own products. In October, Amazon banned all sales of Apple TVs and Google鈥檚 Chromecast from its site. The effort, made ostensibly because of compatibility issues, was seen by many analysts as a naked attempt to drum up sales for its own Fire TV.
The high court鈥檚 decision comes as Amazon is set to open its second physical bookstore this summer at a mall in San Diego.聽 It would be located opposite an Apple store and next to a Tesla store in the upscale Westfield UTC mall, .
Earlier this year, rumors circulated that the online marketplace eventually planned to open . But Amazon appears to have for such a rapid expansion in physical stores, beyond the bookstores in San Diego and Seattle.
An Amazon spokeswoman told the Union-Tribune that it was currently hiring store managers and associates for the San Diego store. The Seattle store, which has approximately 5,500 square feet of retail space, sells a limited selection of Amazon鈥檚 best-reviewed books.
Much like other online stores that have expanded into limited retail stores, it also serves as a showroom for products sold primarily online, such as the Kindle e-book reader, Fire TV streaming box, Fire tablets, and Echo personal assistant.
Companies and individual entrepreneurs are increasingly moving into selling tech products in limited retail spaces. This month, a store opened in Brooklyn, N.Y. In Palo Alto, Calif., buyers from nearby Silicon Valley can now such as Internet of Things devices developed by small companies and compare prices instantly in-store.
It鈥檚 an experience the store鈥檚 owners say aims to mimic the dynamics of online shopping, such as limited time 鈥渇lash sale鈥� discounts, while allowing consumers to buy a product from any outlet they choose.
It鈥檚 hard to say whether Amazon鈥檚 slow expansion into physical retail or the loss of the e-books case could have an impact on Apple鈥檚 fortunes.
Apple鈥檚 earnings in the first quarter of 2016 , but sales of its flagship iPhones were down. Last month, Apple chief Tim Cook described the company鈥檚 fortunes as 鈥渁 lot of great things happening in a turbulent environment.鈥�
It also appears that the words of Steve Jobs, the company鈥檚 co-founder and longtime chief executive came back to haunt the company. When she ruled against Apple in 2013, 2nd Circuit Judge Denise Cote before his death in 2011 regarding the company鈥檚 plans for its iBookstore.
Apple and the publishers 鈥� who previously settled with the Justice Department 鈥� had agreed on a scheme where the tech giant would get a 30 percent commission in exchange for publishers being able to set prices for the books sold on the company鈥檚 store. That鈥檚 a tactic known as 鈥渁gency pricing鈥� that prevents discounts.
鈥淚 can live with this, as long as they move Amazon to the agent model too for new releases,鈥� Mr. Jobs wrote to Eddy Cue, Apple鈥檚 senior vice president for Internet software and services. 鈥淚f they don鈥檛, I鈥檓 not sure we can be competitive.鈥�
The other five publishers eventually settled separately with the Justice Department.
But in her ruling in 2013, Judge Cote wrote that 鈥淎pple has struggled mightily to reinterpret Jobs鈥檚 statements in a way that will eliminate their bite.鈥�
鈥淚ts efforts have proven fruitless,鈥� she added.
