Apple Appeals E-Book Price-Fixing Ruling
Apple formally appealed a July decision finding the company guilty of price-fixing in the electronic book (“e-book”) market, as well as an injunction prohibiting Apple from including “most-favored-nation” clauses in its e-book contracts for five years. Last July, Apple was found guilty of “facilitate[ing] a conspiracy” with major book publishers to raise the price of e-books that cost consumers millions of dollars. In 2007, Amazon released the Kindle e-reader, which quickly dominated the e-book market, acquiring nearly 90% market share. Under Amazon’s wholesale model, Amazon purchased e-books directly from the publisher and sold them at a loss for $9.99 in hopes of driving Kindle sales. According to the ruling, Apple, which entered the e-book market in 2010, proposed a new “agency model,” in which the publishers would set retail e-book prices in Apple’s iBookstore in a range from $12.99 to $14.99 and give Apple, the “agent,” a 30% commission on books sold. Under Apple’s “most favored nation” clause, if another retailer sold below the publisher’s designated price, Apple would be given the right to do so as well. Thus, publishers presented Amazon with an ultimatum: if Amazon did not adopt the agency model, publishers would withhold best sellers from Amazon for several months after publication. This resulted in an e-book price increase by up to 50% per e-book.
Apple filed with the Second Circuit Court of Appeals in early October, but is not required to submit formal arguments until 2014. Throughout the process, Apple has maintained its innocence.
Twitter Discloses IPO Plans
Twitter made its IPO prospectus public, providing investors with information about its financial health. Last month, the social networking company announced that it would go public, but filed with the Securities and Exchange Commission under a 2012 law allowing emerging corporations with less than $1 billion to go public with confidential filings.
Twitter filed for a $1 billion IPO, but may face problems with profitability. Twitter has more than 215 million monthly active users and 100 million daily active users. However, it faced a deficit of $418.6 million as of June 30, 2013. Twitter’s primary source of revenue is advertising. As with Facebook, another high-profile Silicon Valley IPO, the interest in Twitter’s IPO is not with its short-term revenue prospects, but its online reputation and potential for future growth.
Twitter intends to trade under the ticker symbol TWTR, though it is unknown on which stock exchange it plans to list. The release date could be as soon as November 15. The social networking website is estimated to be valued at $10 billion and is considered one of the most anticipated IPOs since Facebook.
American and British Intelligence Attempted to Locate TOR Users
National Security Agency documents leaked by Edward Snowden indicate that the NSA and Government Communications Headquarters attempted to identify users of TOR, a popular internet anonymity software. TOR, which receives over 60% of its funding from the US government, is relied upon by journalists and activists in repressive countries to maintain private communications. Intelligence agencies claim that TOR is also widely used to conduct illegal activity. Silk Road, the online narcotics market recently seized by the Federal Bureau of Investigations, relied heavily on the TOR service. However, the closure of Silk Road is attributed not to problems with TOR’s security, but rather carelessness of the website owner.