The document discusses Apple's violation of the Sherman Act through price fixing in the ebook market, resulting in a $600 million fine for unethically inflating ebook prices alongside major publishers. It highlights the ethical implications of Apple's agency model, which stifled competition, particularly against Amazon, leading to increased consumer prices and legal repercussions. The analysis includes stakeholder perspectives, options for ethical business practices, and the eventual outcomes of legal actions against Apple.

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APPLE’s EXPENSIVE EBOOKS
TABLE OF CONTENT
1.The Scenario 3
2.The Stakeholders 3
3.Ethical issue 4
4.Non-Ethical issues 5
5. Consequences 5
6.Ethical Analysis 5
7.Options 6
8.Conclusions 7
9.Reference 8
1.The Scenario :
Apple found guilty to violate the Sherman act and conspired to raise the price. Apple raised the
price of eBooks with joining hands with five big publishers of US. These publishers were
Hachette Book Group, Inc., Harper Collins Publishers, Macmillan Publishers, Penguin Group,
Inc.,and Simon & Schuster. However, publisher defendant settled their claim and apple
proceeded to trail. Apple adopted agency model to sell eBooks $9.99 to $14.99. Agency model

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let apple and publisher to control the price of eBooks. Apple also fixed different price tire for
different books to inflate prices. Apple included MFN clause in contracts with publishers
according to witch apple can sell eBooks at lesser prices. Apple is fined to pay $600 million to
customers for increasing price and negatively impacted healthy competition in market. This
lawsuit accued apple to force consumers buys eBooks at higher price unethically. Price fixing is
an agreement between companies to sell product at pre-determined price. Apple ipad tablet
launch drove the eBook price fixing. Amazon was selling eBooks on average $9.99, gaining
position of market leader very fast. Amazon became market leader in eBooks segment by
offering lower price, minimum profit, and fulfillment of customer expectation. Apple created its
own monopoly, as publishers couldn’t offer discounts. Apple inc. adopted agency model under
which six giant publishers wont sell anything at lower price to rival companies i.e. Amazon.
Agency pricing is unethical and breach of ICT professionalism ethics. Agency pricing is anti
competitive where Apple didn’t need to compete by fixing e book price. It is immoral practice as
well. However, it increased revenue of 50 to 70% to all involved parties. (Jennings, n.d.)
2.The Stakeholders :
Competitors Amazons
Shareholder Employees and shareholders
Customers eBooks buyers
Community business community
Suppliers- Publishing house
3.Ethical issue-

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Amazon actions- When Amazon learnt about deal of publishing house and Apple inc. Amazon
approached authors and motivates the disintermediation. Intermediation means the elimination of
intermediaries between producers and consumers. Now authors have option to choose 70%
royalty options for eBooks in between of price range $2.99 to $9.99.
Suppliers- Publishers felt that low price of Amazon can create problem for them for their
hardcover profitable books. These six publishers house adopted several different strategies to
beat with Amazon price. Ultimately, they joined hand with late Steve jobs, Then CEO of Apple
inc. to adopt agency model and inflate prices.
Business community- In ICT, professionalism is important aspect of ethical issues.
Professionalism is arguable is most significant in some business community, especially in tech
giants like Apple Inc. ICT has potential to influence lives of all. Professionalism in ICT
emphasizes the problem in business communities and it demand companies to behave
professionally. There is difference between person is considered as professional to conduct
business or person being integral part of business to be considered professional. Being part of
profession means having adequate qualification and skill to carry the business. Professional is
meant by conducting business in professional way. Apple inc. falls in second category, where
Steve jobs conducted eBook business in unprofessional approach. (Souppouris, 2013)
4.Non-Ethical issues
Shareholders- Shareholder of Apple inc. sued CEO and other executive, who were involved in
price fixing. Shareholders claimed that price fixing scandal damaged the company and demanded
compensation for damage. (KELLER, 2014)
5. Consequences:
As result of fixing price is following

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Competitors Amazons No monopoly
Shareholder Employees and shareholders Increased returns damage to
goodwill
Customers eBooks buyers Higher price
Community business community market dismantled
Suppliers- Publishing house Increased returns
Apple Inc. Apple Increased returns and Reduced
competition
(Flood, 2012)
6.Ethical Analysis-
A.Consequentialism
Consequentialism is ethical theories that hold about consequences of one’s act should be ultimate
base to decide rightness pr wrongness of decision. Alternatively, we can say that
consequentialsim is doctrine that decides the morality of action should be judged by its
consequences. According to Utilitarianism approach of consequentialsim, people or organization
should act in way to maximize human welfare. (Jackson, 1991)
In present case study, Apple justified his actions that it stopped monopoly of Amazon and
justifies increased price of consumers. Amazon was intervening in market dynamics and
prevented market to be free. Because of Apple Inc.’s agency model, Amazon market share
lowered down from 90 to 60%. However, actions of apple inc. was not maximizing the human
welfare as it consumers were required to pay more.
b. Just Consequentialism

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It is system of applied ethics and means to remedy for ethical problem. It combines the core
value of Consequentialism. In present case study, company wants to break the monopoly of other
rivals. The good point is to make market free. Action also reduced competition and increased
revenue for shareholder. Just Consequentialism has further concern in present case, if we choose
to ignore the harm to consumers. We want good computing policies that can protect consumers
and promises to let the human being flourish. Just Consequentialism says that ends never justify
unethical means. Theory says benefit of small group or good become enemy of just. If means are
unjust good will end somehow. (H. Moor, 1999)
7.Options :
1. Apple should pay attention to other marketing strategies to gain profit margin rather than
agency pricing.
2. Amazon should not directly deal with authors and offer 70% royalty. Instead, Amazon should
fight legal battle, which it did at later stage
3. Publishing house should not focus on short term goals and should not influence business
market by using their power. Publishing house must venture into other market for profit making
4. Shareholders always pay close attention to companies’ decision making and should prefer long
term continued survival rather than short term profit seeking.
5. Companies must conduct business in professionalism for long-term stability.
8.Conclusions :
US department of justice filed lawsuit in April 2012.Apple is forced to pay $200 million to
customers. Solutions from my recommendations are implemented by tech giant and other
stakeholders in present case study. For instance- Amazon grew as competitors. Apple stopped

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unethical behavior, refund to customers and allowed to continue business by US government.
(Kendall, 2016)
Retailers got freedom to set price again. Publishers settled claim outside of court. However,
Consumers’ received compensation 3 times of what they paid. Apple Paid fine to breaking the
law. We can conclude that Amazon was growing big, but apple did not have rights to intervene
through unethical manners and caused harm to its reputation and customers also.
9.Reference-
1. Kendall, B. (2016). Supreme Court Turns Away Apple Appeal in E-Books Antitrust
Case. WSJ. Retrieved 28 May 2016, from http://www.wsj.com/articles/supreme-court-turns-
away-apple-appeal-in-e-books-antitrust-case-1457362484
2. :Souppouris, A. (2013). Apple warns guilty ebook verdict would 'send shudders through the
business community'. The Verge. Retrieved 28 May 2016, from
http://www.theverge.com/2013/6/22/4454426/apple-ebook-price-fixing-closing-argument
3. KELLER, J. (2014). Apple shareholders sue Tim Cook, other execs over ebook price
fixing. iMore. Retrieved 28 May 2016, from http://www.imore.com/apple-shareholders-sue-
cook-other-execs-over-ebook-price-fixing
4. Jennings, M. Business ethics.
5. H. Moor, J. (1999). Just consequentialism and computing. Ethics And Information
Technology, 1, 65-69.
6. Jackson, F. (1991). Decision-Theoretic Consequentialism and the Nearest and Dearest
Objection. Ethics, 101(3), 461-482. http://dx.doi.org/10.1086/293312
7. Flood, A. (2012). The Apple ebook price-fixing lawsuit has terrifying implications. the
Guardian. Retrieved 28 May 2016, from https://www.theguardian.com/books/2012/apr/13/apple-
ebook-price-fixing-terrifying
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