The New Ecology 31
unbeatable price”.
78
The iPad also benefitted from being targeted as a
consumer electronics product, one designed to consume video, text, and
graphics, and, from its very earliest stages, it was also intended to be
a reading device. Alongside the launch of the iPad itself, Apple introduced a new app, iBooks, as well as a service to complement iTunes,
the iBookstore, with titles from major and independent publishers. Electronic readers had been touted since the late 1990s, but it was only with
the launch of Amazon’s Kindle in 2007 that they finally began to gain
market share: by the time Apple entered the market in 2010, Amazon
claimed that it had 70–80 per cent of the e-book market,
79
a situation
that many publishers considered disastrous as Amazon, in a push to sell
Kindles, started limiting all e-book prices to $9.99 or less – even paying
publishers more in many cases in order to ensure that its loss-leading
e-reader would dominate the market.
80
Into this increasingly toxic market place – where Amazon effectively declared war on some of the Big
Six book publishers – Apple entered with a seductive proposition: Apple
would use its agency model to allow publishers to set the price of their
e-books, taking a 30 per cent cut as it did via its app store and iTunes
sales. While publishers were eager to sign up, this, in turn, created further problems as the 1890 Sherman Act forbids organisations from combining to exert control over a market: as the main publishers were in
regular contact with each other and Apple regarding the deals that they
signed with Apple, in 2012 a suit was filed against Apple and five of
the main publishers (excluding Random House). The publishers subsequently settled with Amazon and only Apple went to court and was
found guilty, in 2013, of conspiracy to set the retail prices of e-books
and, after appeals, was ordered to pay $450 million. As of February
2017, Amazon was responsible for 83.3 per cent of e-book sales in the
USA, compared to 9 per cent for Apple, a market share that was moreor-less replicated across English-reading markets.
81
Clearly, there was
one competitor that dominated the market and, for all its success as a
hardware manufacturer, this was not Apple. And yet, Apple had lost its
court case for the simple reason that the Sherman Act considers antitrust actions against consumers, rather than monopolies per se directed
against other competitors. As Foer and Galloway have observed, the
particular nature of antitrust legislation in the United States has greatly
benefitted Amazon, which has consistently presented itself as an ally of
consumers.
82
The two examples considered thus far – music and book publishing –
show how Apple has intervened in different media ecologies with very
different consequences, dominating one completely for the best part
of a decade, while being very much a secondary competitor in the
other. The two media industries share several key factors, not least
that the process of monopolisation had long been taking place before any of the main digital companies entered the fray: mergers and
unbeatable price”.
78
The iPad also benefitted from being targeted as a
consumer electronics product, one designed to consume video, text, and
graphics, and, from its very earliest stages, it was also intended to be
a reading device. Alongside the launch of the iPad itself, Apple introduced a new app, iBooks, as well as a service to complement iTunes,
the iBookstore, with titles from major and independent publishers. Electronic readers had been touted since the late 1990s, but it was only with
the launch of Amazon’s Kindle in 2007 that they finally began to gain
market share: by the time Apple entered the market in 2010, Amazon
claimed that it had 70–80 per cent of the e-book market,
79
a situation
that many publishers considered disastrous as Amazon, in a push to sell
Kindles, started limiting all e-book prices to $9.99 or less – even paying
publishers more in many cases in order to ensure that its loss-leading
e-reader would dominate the market.
80
Into this increasingly toxic market place – where Amazon effectively declared war on some of the Big
Six book publishers – Apple entered with a seductive proposition: Apple
would use its agency model to allow publishers to set the price of their
e-books, taking a 30 per cent cut as it did via its app store and iTunes
sales. While publishers were eager to sign up, this, in turn, created further problems as the 1890 Sherman Act forbids organisations from combining to exert control over a market: as the main publishers were in
regular contact with each other and Apple regarding the deals that they
signed with Apple, in 2012 a suit was filed against Apple and five of
the main publishers (excluding Random House). The publishers subsequently settled with Amazon and only Apple went to court and was
found guilty, in 2013, of conspiracy to set the retail prices of e-books
and, after appeals, was ordered to pay $450 million. As of February
2017, Amazon was responsible for 83.3 per cent of e-book sales in the
USA, compared to 9 per cent for Apple, a market share that was moreor-less replicated across English-reading markets.
81
Clearly, there was
one competitor that dominated the market and, for all its success as a
hardware manufacturer, this was not Apple. And yet, Apple had lost its
court case for the simple reason that the Sherman Act considers antitrust actions against consumers, rather than monopolies per se directed
against other competitors. As Foer and Galloway have observed, the
particular nature of antitrust legislation in the United States has greatly
benefitted Amazon, which has consistently presented itself as an ally of
consumers.
82
The two examples considered thus far – music and book publishing –
show how Apple has intervened in different media ecologies with very
different consequences, dominating one completely for the best part
of a decade, while being very much a secondary competitor in the
other. The two media industries share several key factors, not least
that the process of monopolisation had long been taking place before any of the main digital companies entered the fray: mergers and