Question

Amazon developed the Kindle, which is an e-reader. To encourage sales, it priced most e-books for the Kindle at $9.99, well below costs for printed books. Apple wanted to enter the e-reader market and reached a deal with major publishers to higher prices than Amazon had contracted with them for. The result was that it forced Amazon to pay higher prices for books (between $14.99-29.99). Is Apple guilty of illegal price fixing? Why or why not?

Answer 1

ANSWER :

Apple embraced a strategy for "organization model" wherein the Suppliers could set their own costs while Apple would charge 30% commission on their deals.

• Thigher edges incited the Publishers to request that Amazon follow a similar model else they would stop offering books to Amazon.
• Such a deal would wind up the clients following through on greater expenses for the digital books.
• Subsequently, there was a feeling of value fixing in mask associated with the whole case that was featured by the US Justice Department in the US just as that by the European Commission in Europe.
• Subsequently in both the cases, Apple Inc. was seen as blameworthy of illicit value fixing.

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