Apple Conspires To Raise Price Of E-Books
Oh, Apple. Say it isn’t so! Our favorite technology giant has done us dirty in the worst possible way. Apple was not only involved in, but led a conspiracy to drive up the price of e-books. Hitting us right where it hurts, Apple. I don’t even know what to do with this information.
According to the Los Angeles Times, Apple was “aggressively pressuring publishers to raise prices and weaken Amazon.com.”
U.S. District Judge Denise Cote ruled that Apple is liable for civil antitrust violations, more than two weeks after closing arguments.
“The Plaintiffs have shown that Apple conspired to raise the retail price of e-books and that they are entitled to injunctive relief. A trial on damages will follow,” Cote wrote in her opinion.
The publishers in on the scheme were, Penguin, HarperCollins, Simon & Schuster, Macmillan and Hachette Book Group.
When the Company arrived in the e-book market in April 2010, Apple offered publishers a way to fight back against Amazon by raising the prices of e-books. Prices went up shortly thereafter, and Apple negotiated 30% of the profits, argued federal prosecutor Mark Ryan.
The government showed that Apple executive Eddy Cue was in contact via email and phone with representatives from the five publishers who signed agreements with the Company, with ultimately led the publishers to change how they distributed and priced books.
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Apple’s argument was the phone calls were non-threatening negotiations and that it did not conspire with any of the aforementioned companies. Instead, Apple blames Amazon, which sells the majority of e-books, claiming Amazon is a monopoly that is hurting consumers. Apple said it was going to trial, rather than settling, because it did nothing wrong.
Assistant U.S. Atty. Gen. Bill Baer, who is in charge of the Justice Department’s Antitrust Division, called the ruling "a victory for millions of consumers who choose to read books electronically."
"Companies cannot ignore the antitrust laws when they believe it is in their economic self-interest to do so," he said. "This decision by the court is a critical step in undoing the harm caused by Apple’s illegal actions."
In her ruling, Cote wrote that there is no doubt that publishers conspired to raise the prices of their e-books. They were afraid, she writes, that Amazon’s $9.99 price point for bestsellers would completely upset their business model. But Apple was the ringleader - publishers had tried to get Amazon to raise prices in 2009 and 2008, and failed by themselves.
“Apple was a knowing and active member of that conspiracy. Apple not only willingly joined the conspiracy, but also forcefully facilitated it,” she writes.
This is one of the biggest antitrust cases tried by the Justice Department over the last decade. Apple has argued that a ruling against it would set a dangerous precedent for other tech firms trying to strike content deals. Cote addressed that fear in her ruling, stressing that it only pertains to the details in Apple’s case, and not to other companies.
“While a Court must take seriously a prediction that its decision will harm our nation’s economy, particularly when made by skilled counsel on behalf of an esteemed company, it is difficult to see how competition will be stifled by the ruling in this Opinion. This Opinion’s findings arise from the specific events that unfolded in the trade e-book market as 2009 became 2010. It does not seek to paint with a broader brush.“
Marketing matters: from IBM to Kyndryl
Prior to joining Kyndryl as Chief Marketing Officer, Maria had a 25-year career at IBM, most recently as the tech giant’s CMO where she oversaw all marketing professionals and activities across North America, Canada and Latin America. She has held senior global marketing positions in a variety of disciplines and business units across IBM, most notably strategic initiatives in Smarter Cities and Watson Customer Engagement, as well as leading teams in services, business analytics, and mobile and industry solutions. She is known for her work with teams to leverage data, analytics and cloud technologies to build deeper engagements with customers and partners.
With a passion for marketing, business and people, and a recognized expert in data-driven marketing and brand engagement, Maria talks to Business Chief about her new role, her leadership style and what success means to her.
You've recently moved from IBM to Kyndryl, joining as CMO. Tell us about this exciting new role?
I’m Chief Marketing Officer for Kyndryl, the independent company that will be created following the separation from IBM of its Managed Infrastructure Services business, expected to occur by the end of 2021. My role is to plan, develop, and execute Kyndryl's marketing and advertising initiatives. This includes building a company culture and brand identity on which we base our marketing and advertising strategy.
We have an amazing opportunity ahead at Kyndryl to create a company brand that will stand apart in the market by leading with our people first. Once we are an independent company, each Kyndryl employee will advance the vital systems that power human progress. Our people are devoted, restless, empathetic, and anticipatory – key qualities needed as we build on existing customer relationships and cultivate new ones. Our people are at the heart of this business and I am deeply hopeful and excited for our future.
What experiences have helped prepare you for this new opportunity?
I’ve had a very rich and diverse career history at IBM that has lasted 25+ years. I started out in sales but landed explored opportunities at IBM in different roles, business units, geographies, and functions. Marketing and business are my passions and I landed on Marketing because it allowed me to utilize both my left and right brain, bringing together art and science. In college, I was no tonly a business major, but an art major. I love marketing because I can leverage my extensive knowledge of business, while also being able to think openly and creatively.
The opportunities I was given during my time at IBM and my natural curiosity have led me to the path I’m on now and there’s no better next career step than a once-in-a-lifetime-opportunity to help launch a company. The core of my role at Kyndryl is to create a culture centered on our people and growing up in my career at IBM has allowed me to see first-hand how to prioritize people and ensure they are at the heart of progress in everything Kyndryl will do.
How would you describe your leadership style?
I believe that people aren't your greatest assets, they are your only assets. My platform and background for leadership has always been grounded in authenticity to who I am and centered on diversity and inclusion. I immigrated to the US from Chile when I was 10 years old and so I know the power and beauty that comes from leaning into what makes you different from other people, and that's what I want every person in my marketing organization to feel – the value in bringing their most authentic self to work every day. The way our employees feel when they show up for themselves authentically is how they will also show up for our customers, and strong relationships drive growth.
I think this is especially true in light of a world forever changed by the pandemic. Living through such an unprecedented time has reinforced that we are all humans. We can't lead or care for one another without empathy and I think leaders everywhere have been reminded of this.
What’s the best leadership advice you’ve received?
When I was growing up as an immigrant in North Carolina, I often wanted to be just like everyone else. But my mother always told me: Be unique, be memorable – you have an authentic view and experience of the world that no one else will ever have, so don't try to be anyone else but you.
What does success look like to you?
I think the concept of success is multi-faceted. From a career perspective, being in a job where you're respected and appreciated, and where you can see how your contributions are providing value by motivating your teams to be better – that's success! From a personal perspective, there is no greater accomplishment than investing in the next generation. I love mentoring younger professionals – they are the future. I want my legacy as a leader to include providing value in work culture, but also in leaving a personal impact on the lives of professionals who will carry the workforce forward. Finding a position in life with a job and company that offers me a chance at all of that is what success looks like to me.
What advice would you give to your younger self just starting out in the industry?
I've always been a naturally curious person and it's easy for me to over-commit to projects that pique my interest. I've learned over years of practice how to manage that, so to my younger self I’d say… prioritize the things that are most important, and then become amazing at those things.