United States v. Apple, Inc.
United States Court of Appeals for the Second Circuit
791 F.3d 290 (2015)
When Amazon introduced the Kindle in 2009, it offered downloadable bestseller and new-release e-books for just $9.99. The move threatened to upset traditional publishing pricing structures, which charged up to $30 for new hardbacks and bestsellers. By late 2009, Apple, Inc. (codefendant), planned to launch the iPad using the iBookstore as its virtual marketplace for e-books. Apple negotiated with the six largest American publishing companies (the “Big Six”) (codefendants) to change pricing structures to an agency model, in which they would charge $19.99 for new releases and $14.99 for bestsellers and pay Apple a commission. Apple counsel added a “most favored nation” (MFN) clause requiring the publishers to match prices available elsewhere, including Amazon. Although it appeared the publishers would earn less per book, once most of the Big Six adopted the new scheme, they together could make Amazon raise its prices by withholding books. Apple encouraged the Big Six to unite against the $9.99 e-book, assuring them they were all contracting on identical terms. Ultimately, five of the Big Six contracted to sell through iBookstore. When Steve Jobs introduced the iPad, he explained that consumers would pay higher iBookstore prices because Amazon’s Kindle e-book prices would increase to match. One day later, the publishers began threatening Amazon with book delays until it also shifted to agency pricing. Once Amazon switched, the publishers increased book prices. E-book prices remained 16.8 percent higher over six months and remained elevated two years later. The Department of Justice and 33 states and territories (plaintiffs) sued Apple and the publishers for violating antitrust laws by conspiring to fix prices. The publishers all settled out, but Apple proceeded to trial. The trial court found that Apple conspired with the publishers to fix prices horizontally, a per se violation of the Sherman Antitrust Act. Apple appealed.
Rule of Law
Holding and Reasoning (Livingston, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 724,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.Unlock this case briefRead our student testimonials
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.Learn about our approachRead more about Quimbee
Here's why 724,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 45,600 briefs, keyed to 983 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.