Is this conduct a violation of the antitrust laws

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Reference no: EM132096572

In preparing to launch its iBookstore in 2009, Apple entered into contracts with five of the largest publishers to cap their prices for e-books to the iBookstore at $12.99, with Apple taking a 30% commission on the sales, meaning they could make only $8.75 per book. However, the agreements provided that Apple would always get the publisher’s lowest price offered to any other booksellers. The publishers then used the Apple terms to be able to negotiate with Amazon in order to increase their prices there because Amazon held 90% of the e-book market and they had been held captive to Amazon’s demands for pricing. The presence of the iBookstore gave the publishers leverage, and the uniform Apple pricing agreements bonded the publishers together with the courage to stand up against Amazon. The result was that all the publishers increased their prices to Amazon and, as a result, to consumers. Apple no longer needed to worry about Amazon’s pricing dominance. Is this conduct a violation of the antitrust laws?

Reference no: EM132096572

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