April 23, 2012

Rumored: Apple may settle EU case


Apple has offered to settle its row over ebook price fixing in Europe, despite vowing to fight a parallel case in America because the charges are ‘simply not true,'” says a Daily Telegraph report by Katherine Rushton.

As Rushton notes, Apple’s public stance on the case brought against it by the U.S. Department of Justice has been “to declare itself innocent and paint itself as a hero for breaking Amazon’s ‘monopolistic grip’,” claiming further that it did no wrong. Indeed, the company’s cockiness has prompted much speculation that it must have a strong case. (For example, a Daily Finance report headlined, “Apple to the Feds: Bring It On!“)

“However,” continues the Telegraph report, Apple “has taken an altogether different approach in Brussels. Joaquín Almunia, the European Union competition commissioner, said he has received settlement offers from Apple and all the publishers other than Penguin.”

Unfortunately, Rushton has nothing further to say detailing her report nor explaining why Apple might settle one case but not the other.

But a Forbes magazine column by Tim Worstall has some smart speculation “as to why the settlement in Europe” …

… I have a sneaking suspicion it’s because of the size of the potential fines. If the EU finds that a company has been part of a cartel then they can fine them 10% of global turnover. That is, given the size of the company, a considerable incentive for Apple to settle: one that they might not have to settle the US case.

And a report from the Register by Brid-Aine Parnell details this just a little more: “Quite why Apple wants to settle in Europe but fight on in the US is something of a mystery, although it may have to do with the commission’s power to fine the firm up to 10 per cent of its worldwide turnover.”

That’ll do it.


Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House.