Apple Faces E-Book Restrictions

http://www.bbc.co.uk/news/business-23990485

An ethical decision is one that meets both legal requirements and shares ethical standards of the community. In this case, on both accounts Apple has acted unethically. Recently a US judge has restricted technology giants Apple for fixing prices of e-books which is also known as collusion. In most countries this is illegal and governments try to prevent and abolish this in order to protect consumers. This is because by colluding, the firms involved can come together to set the prices higher for the consumers to increase revenue earned. Furthermore, the consumers do not have many substitutes this cannot be negotiated and demand does not decrease thereby acting like a monopoly. In this case, an e-book that was typically priced at $9.99 on sites such as amazon rose to $12.99 or $14.99 (BBC).

We can say that this is an unethical decision as it affects the stakeholders of Apple and the other e-book retailers in a negative. The stakeholders that are negatively affected are the consumers as they have to pay a higher price for the same product that is not worth that much. However, this since there will be an increase in revenue due to the price increase, the shareholder and internal stakeholders will have benefits from this.

The consequences of this behaviour may lead to a decrease in customer loyalty as well as distrust that Apple does not have best interest in the consumers. These components can be very crucial in technological companies such as apple and may lead to consumers switching e-book retailers to such as Amazon.