Apple to pay $450 million as U.S. Supreme Court rejects e-books price-fixing appeal

Apple Store San Francisco Justin Ennis Flickr

WASHINGTON (By Lawrence Hurley, Reuters) – The U.S. Supreme Court on Monday declined to hear Apple Inc’s challenge to an appellate court decision that it conspired with five publishers to increase e-book prices, meaning it will have to pay $ 450 million as part of a settlement.

The court’s decision not to hear the case leaves in place a June 2015 ruling by the New York-based 2nd U.S. Circuit Court of Appeals that favored the U.S. Department of Justice and found Apple liable for engaging in a conspiracy that violated federal antitrust laws.

Apple, in its petition asking the high court to hear the case, said the June decision by the 2nd U.S. Circuit Court of Appeals in New York upholding a judge’s ruling that Apple had conspired with the publishers contradicted Supreme Court precedent and would “chill innovation and risk-taking.”

The 2nd Circuit’s ruling followed a 2013 decision by U.S. District Judge Denise Cote after a non-jury trial that Apple played a “central role” in a conspiracy with publishers to eliminate retail price competition and raise e-book prices.

The Justice Department said the scheme caused some e-book prices to rise to $ 12.99 or $ 14.99 from the $ 9.99 price previously charged by market leader Amazon.com Inc.

“Apple’s liability for knowingly conspiring with book publishers to raise the prices of e-books is settled once and for all,” said Bill Baer, head of the U.S. Justice Department’s antitrust division. Baer called the price-fixing conspiracy “cynical misconduct.”

Publishers that the Justice Department said conspired with Apple include Lagardere SCA’s Hachette Book Group Inc, News Corp’s HarperCollins Publishers LLC, Penguin Group Inc, CBS Corp’s Simon & Schuster Inc and Verlagsgruppe Georg von Holtzbrinck GmbH’s Macmillan.

On Feb. 17, the appeals court in New York upheld the proposed settlement, which had been challenged by an e-books purchaser.

Apple did not immediately respond to requests for comment.

The Justice Department accused Apple of colluding with the five publishers as the Silicon Valley giant was launching its iPad in early 2010 and was seeking to break up Amazon.com’s low-cost dominance in the digital book market.

The case is Apple v. United States, U.S. Supreme Court, No. 15-565.

(Reporting by Lawrence Hurley; Additional reporting by Diane Bartz; Editing by Will Dunham)



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The future of coding bootcamps

bootcamp

GUEST:

Almost two years ago, I wrote a couple of features on the potential of the coding bootcamp industry, including one published here on VentureBeat. I talked to founders and other stakeholders from more than a dozen bootcamp companies at that time and have been an armchair follower of the sector since then. But recently I did some research for a private equity investor in education, online learning, and edtech who has been looking at coding bootcamps, and I thought I would share some observations on what I rounded up about the current status of this market.

There isn’t enough independent information about bootcamps

The motivation for this investor’s inquiry was the perception on his part that there is so little serious reporting or research on bootcamps, which I think he’s right about.

Consider some of the questions I raised two years ago:

  • Does this model only work for the cream of the crop, or can it scale to less prepared or less motivated students who make up most of the market potential?
  • Is this model too labor intensive to scale? Can online versions be as effective?
  • What applications does this have in subjects beyond software engineering?
  • What happens to these newly trained employees in a few years when the technology and employment landscape changes? Are they job ready or career ready?
  • Does the need to market one product to two audiences — students and employers — drive up the cost and limit growth?
  • How real are the eye-popping placement rates that bootcamps boast about?

These questions remain mostly unanswered, because the vast majority of information out there about coding bootcamps is put out by self-interested parties.

I have no particular reason to doubt the claims of the people operating these schools, but there really hasn’t been any independent verification. The press, for the most part, hasn’t taken a hard look at the statistics, with some notable exceptions like Anya Kamenetz at NPR.

Meanwhile, in comparison to higher ed, bootcamps and their students don’t have the benefit of:

  • a U.S. News and World Report-like guide for the industry
  • a nonprofit accreditation organization like most universities voluntarily subject themselves to
  • a government review agency

Not that any of those would be an unmitigated good. You can imagine how introducing any one of those factors might promote some of the weaknesses of our current education models without supporting the unique potential of boot camps.

Regarding government review, there is some activity in that area. The U.S. Department of Education has signaled that it will experiment with allowing federal financial aid funds to be used for coding bootcamps, which will depend on some improved reporting of outcomes.

But that isn’t happening yet. According to Salvador Rodriguez in The International Business Times (another exception to my swipe at the press):

“Nearly a year ago, these schools . . . made a pledge to reform. The schools, part of the New Economy Skills Training Association, or Nesta, sent a letter to President Barack Obama last March expressing their commitment to release standardized, annual audited outcomes reports . . . . Yet almost 12 months later, only one of the 10 schools has delivered on its promise to the White House.”

The investor I talked with naturally hesitates to put his firm’s money where the value proposition, though powerful, is so unproven. There are reasonable questions about bootcamps as an investment, as a choice for individual students, and as a model for reforming education.

And bootcamps probably have reasonable answers to those questions.

But for now we’re at a stalemate without independent auditing or review.

Watch out for the next Corinthian College . . . or worse

The number of coding bootcamps is growing very quickly, but they don’t have any brand differentiation. To the customer, they look like a blur of similar products. In the short term, this may produce some fly-by-night operators.

Over time, consolidation will be inevitable, so look for the market leaders to start buying up the laggards to build chains similar to what Kaplan Test Prep has done, or else developing a franchise similar to what we’ve seen with Sylvan Learning Centers and Kumon tutoring.

That could create an environment of downward price pressures, compromises on quality, and boiler-room sales tactics.

If you fuel that fire with federal funding, you risk getting a Corinthian College, as Clint Schmidt, COO of Bloc, argued here previously. Even worse, you could get zombie schools not quite as bad off as Corinthian, never shutting down and continuing to take money from students and from taxpayers without providing a valuable education in return.

Better bootcamps, in the meantime, face the risk of looking like University of Phoenix, with a viable product but struggling to distance themselves from the reputation that bad actors in the industry are creating.

We desperately need bootcamps or something like them

Higher ed cannot fill the skills gap or the market demand from either the student side or the employer side. It doesn’t have enough infrastructure, and it doesn’t have enough flexibility to create online, hybrid, and off-campus alternatives, because it is too bound up with its current systems for accreditation, funding, scheduling, staffing, and credentialing. Higher ed’s other limitations:

  • It doesn’t work for the surprising number of people it admits because it can’t get them through a degree program in four years.
  • It doesn’t work for the much larger number of people it never admits to begin with.
  • It doesn’t work for the vast number of working adults, with or without a degree, who need additional learning and training opportunities.
  • It doesn’t work for employers whose needs are emerging in new skills faster than a university can build capacity to provide those skills.

Investors are excited about coding schools because the enormous market potential is matched by an enormous need.

Bootcamps are unique in a way that matters

Despite the legitimate questions about bootcamps, they do something unique that is meaningful: They match learners with employers. Employer partners are baked into the recipe.

It seems blazingly obvious now, but existing certificate and degree programs only imagine hypothetical employers. If I was in charge of academic affairs at a university, I would require any new program proposal mentioning job preparation to involve actual companies. Show me the living and breathing employer who is going to take our students at the end of this curriculum.

Some other innovative new programs make very strong connections between the student and the employer. College for America’s competency-based degree is one where employers are heavily consulted in the design of the curriculum. But only bootcamps, as far as I know, make such a direct match, and that makes them an entirely new species in the ecosystem.

We need bootcamps and higher ed to work together

When it comes to job readiness, I suspect that, in many cases, a bootcamp’s training will prove to have a half life of a few years. Which could be fine. If you really do get an above average salary after 12 weeks and $ 12,000 dollars of tuition, having to put in another $ 12,000 every few years to keep up-to-date might be perfectly workable. But in the meantime, coding bootcamps don’t promise foundational development in communication, analysis, and leadership that is necessary for lifelong career growth.

That’s where higher ed should concentrate on excelling. For short-term job readiness and lasting career readiness, I’m watching the emerging examples of degree programs that are figuring out how to partner with the bootcamp format.

I like to think of bootcamps as the “last 10 percent.” I’d love to see something like this:

  • an old-fashioned degree (8 semesters or possibly a couple less)
  • with about half that time building a broad foundation in the liberal arts
  • and including a deep dive into one meaningful scholarly subject (a.k.a. the major)
  • followed by something like what coding bootcamps currently do to prepare people for an existing entry-level position at an existing employer.

Another option is to reverse that order, since many young people wish to be job ready before they value what college has to offer them. Universities could partner with bootcamps to offer the “last 10 percent” first with an eye to bringing in those students when they or their employers realize their potential is limited until they get more foundational skills.

The format of the bootcamp piece should be fluid, depending on how the market and technologies are changing, and it wouldn’t have to be just in software engineering. Some bootcamps like General Assembly already offer a broader range of subjects like digital marketing, UX design, data analysis, sales, and product management.

Bootcamps can save higher ed from itself

Another way of putting it is that higher ed needs to be open to “plug and play” models, which would mean deciding quickly to decide quickly — something that higher ed is currently terrible at. The bootcamp that can find a way to plug its model in at the right time with higher education, should find a big market.

(As my friend Pete Sena has argued on-demand services like Uber are fundamentally changing the consumer mindset to expect on-demand as the default option. Any organization that can’t deliver according to these on-demand expectations is going to lose customers.)

For that matter, universities need ways to respond to market demands other than just offering a new major or degree.

Consider, for example, the fact that needs other than software engineering will inevitably emerge in the next few years. (My bets are on business development, design thinking for product innovation, and jobs related to the growth of artificial intelligence.) Right now, higher ed’s default response to every need is a degree program.

It’s a compulsive behavior. You say, “skills gap,” and higher ed says, “a sequence of 10 courses, 15-weeks long, meeting on Tuesday and Thursday nights over a period of two years . . . to commence after a two-year period of planning and approval.”

In higher ed, learning is automatically equated with a major course of study, which creates more hungry beasts that have to be feed in perpetuity. Higher ed needs to be saved from itself, and coding bootcamps offer a tantalizing way to do that.

Robert McGuire operates McGuire Editorial, a content marketing services firm specializing in education, online learning, workforce development and education technology companies. You can follow him on Twitter or LinkedIn.



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Amazon FireOS encryption is back (but these tablets are still useless)

Amazon.com caves to PR flak for disabling encryption on Kindle Fire tablets, and other devices using the ‘droid-fork Fire OS 5. In a one-line statement released today, Amazon says encryption will return to Fire OS.

Well, that didn’t take long. Despite Amazon PR’s earlier explanation that users didn’t care for the feature, it’s now saying you can have it back. Mind you, why would you want it, given the utterly weak CPUs inside these nasty, cheap tablets?

In IT Blogwatch, bloggers know the value of nothing. Not to mention: Check out this amazing musical instrument

To read this article in full or to leave a comment, please click here


Cloud Computing

Clash Royale is already the top-grossing iOS game in the U.S.

Supercell's Clash of Clans followup.

Check out more of our 20th anniversary of Pokémon coverage this week at GamesBeat.

No other mobile game has done this so quickly in the age of Clash of Clans, Game of War: Fire Age, and Candy Crush Saga. A brand new game, Supercell’s Clash Royale fortress battle title, has become No. 1 in the U.S., not only on the top downloads chart but also on the top-grossing list on the iOS app store.

That is no small accomplishment in the $ 34.8 billion mobile game industry, considering that Clash of Clans alone generated well over $ 1 billion last year in revenues. That means that Supercell’s Clash of Clans is generating multiple millions of dollars a day in revenues, and now Clash Royale is beating that.

A lot of games hit No. 1 in top downloads as people discover them. But it’s rare, as mentioned, for anyone to break into the top-grossing list that has been dominated by Supercell, Machine Zone, and King. Then again, it is no surprise that Supercell, which has lots of fans and multiple hits, is the one to dethrone its own No. 1 title on the top grossing list. In the U.S., the game is No. 1 on Google Play downloads and it isn’t showing high on the top-grossing list just yet.

This is Supercell’s fourth hit, after Clash of Clans, Boom Beach, and Hay Day.

Ilkka Paananen, CEO of Supercell in Helsinki, Finland, said on his Facebook page recently that he was happy to release Clash Royale, particularly after the company had killed so many other games. Supercell rigorously tests its games in certain markets before releasing them. One of them, Smash Land, was pretty far along in development when the company decided to kill it in mid-2015. That kind of religious focus on quality has earned the company some loyal followers, and it tells you a lot about why Clash Royale is so important.

When SoftBank purchased a controlling stake in the company in June 2015, Supercell was valued at an astonishing $ 5.5 billion. Its success has spawned a lot of other mobile game startups in Helsinki, and everybody is chasing the company’s success. But Clash Royale shows that the company still has huge advantages, even as it remains a relatively small game studio.

It’s no wonder that Apple gave the game a huge feature position in the app store when it launched on Wednesday. Clash Royale is a blend of Clash of Clans, real-time strategy, and multiplayer online battle arena (MOBA) games such as League of Legends. But the blend itself makes for something uniquely addictive, as I found in my own playing.

Clash Royale goes farther than Clash of Clans — which has asynchronous battles, where one online player attacks and an offline player defends — in going to synchronous, real-time combat. For this to function smoothly on mobile requires some huge infrastructure. I haven’t seen a hiccup yet in my battles against real players. It has a slight loading time at the beginning or end of a match.

You have a slate of characters that you can drop on the field and they start moving slowly toward the enemy’s defenses, which consist of two forts and a main castle. It has two lanes for combat, in contrast to five for typical MOBA games like League of Legends. The options for cards to play show up in the bottom of the screen. You get a choice of four. A “mana” meter runs along the bottom. If you have enough mana to play a card, it shows up in colors. If you don’t have enough, a timer that runs in real time shows you when it will be ready. When you are ready to play a card, you just press down on it and move it to the right part of the screen where you want it to appear. That’s all you are required to do. That makes the gameplay repetitive and simple. You just have to think fast.

Clash Royale

Above: Clash Royale

Image Credit: Supercell

It has some similarity to Hearthstone: Heroes of Warcraft, the hugely successful collectible card game from Blizzard. You play cards and choose from among different ones in a deck, and you have to think offline about what kind of cards you want to get (and in this case, upgrade). But Clash Royale is much simpler.

Clash Royale has just a few dozen cards at the moment, but most of them are easily recognizable as characters from Clash of Clans. If you drop down a giant, it will lumber toward the enemy’s fort at a slow pace. Once it gets there, it can do a lot of pounding. Your fort can fire back, but you have to drop some kind of defense, like a dragon, to counter the giant, which can squish archers and goblins quite easily. Each character has advantages and disadvantages when facing other units on the field of battle. It’s a “rock-paper-scissors” kind of battle where you have to decide within seconds what to do.

The battles can end within three minutes. If you run out of time, the side that has destroyed more forts wins. And if you take out the king’s fort, you win. If the game is tied, you go into a sudden death for one minute. I’ve managed to win or lose a number of battles with just a few seconds left, and that’s what makes Clash Royale so exciting.

After each battle, you get a reward of a chest. A small wooden chest usually yields poor loot. But silver or gold chests release better stuff. It takes 15 seconds to open a wood chest. But it takes three hours to open a silver one and eight hours for a gold chest. You get better loot, but if you want to speed up the opening time, you have to spend gems, and those gems can either be earned in combat or purchased with real money. Those gems are the reason that Clash Royale has already hit No. 1 on the top-grossing list on the U.S. app store.

Now the question is how long it will stay at No. 1. But lord knows that Supercell has a huge ad budget, and it hasn’t even begun to advertise it for real yet.

Clash Royale gives you choices for your deck.

 



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