The Texas economy is one of the most robust in the world. Wildly profitable companies and ingenious entrepreneurs call this state home, and what happens here influences businesses around the nation. Here’s a slice of the profits, losses, big deals, and backroom decisions happening across Texas this week.  

iPad it Up to Here With You
Texas is one of fifteen states suing Apple and several major book publishers for conspiring to raise the price of e-books, the Houston Chronicle reported this week. The lawsuit accuses the group of increasing the average cost of e-books by $2 to $3 “virtually overnight,” preventing Amazon from offering them at the lower rate of $9.99. The online retailer’s discounted price had made Apple less competitive.

According to Attorney General Greg Abbott, Apple began colluding with publishers in 2009 to time the price increase with the launch of the iPad the following year. Texas and Connecticut have reached settlement agreements with two of the publishers, who will provide $52 million in restitution to consumers.

The Bottom Line: Amazon, which was portrayed as a victim in the antitrust suit, could soon have its revenge: the New York Times reports the company is already slashing prices on most titles in hopes of recouping its lost market share. This has prompted some concern that the outcome of the lawsuit could give Amazon an even more dominant position in the industry than it had before.

Farewell, Old Yeller
Dallas-based AT&T sold off its majority ownership of its Yellow Pages division to a private equity firm this week, apparently hoping to cut its losses from plummeting ad revenues. The company unloaded 53 percent of its share for $950 million—about half as much as its current estimated value. The desperate move suggests the writing is on the wall for the Yellow Pages: “Revenues from the division’s print media arm would have to decline to nearly zero right from this very year in order to support the stake sale valuation,” MSN Money reports

The Bottom Line: Google and other sites have essentially rendered the Yellow Pages obsolete. More than 75 percent of the division’s revenue comes from print advertising, which has declined by nearly half in four years.

We Auto be Grateful
Texas’ auto industry generates almost twenty percent of the state’s total tax revenue, according to a study released this week by the Center for Automotive Research. The Dallas Business Journal reports that in 2010, Texas “collected more than $7.62 billion from car owners, dealers, drivers and auto industry workers.” Texas collected more taxes from sales of fuel, new and used vehicles, and parts and services than any other state besides California.

The Bottom Line: Auto-related taxes make up nineteen percent of Texas’ tax base; only Oklahoma, Florida and South Dakota draw larger proportions. The national average is thirteen percent.

Hold on a SEC
The Securities and Exchange Commission has charged two former Houston bank executives with misleading investors about loan quality and lying about their company’s stability during the financial crisis.

The SEC issued a release accusing former Franklin Bank Corporation CEO Anthony J. Nocella and CFO J. Russell McCann of engaging in a “fraudulent scheme designed to conceal the deterioration of the bank’s loan portfolio and inflate its reported earnings.”

Using loan modification programs, Nocella and McCann allegedly concealed more than $24 million in losses from non-performing loans in 2007. The SEC complaint says Franklin overstated its earnings by 317 percent in a filing from that quarter.

The Bottom Line: Franklin covered up the bad loans by marketing them under programs with names like “Fresh Start” and “Great New” in an attempt to make them seem more financially healthy, the New York Times reports.

Winner of the Week: Mattress Firm
Houston-based Mattress Firm is set to become the largest bedding chain in the country this summer, following its announcement this week that it will acquire its Addison-based rival Mattress Giant for $47 million. Analysts expect that the company will operate about one thousand stores and take in about $1 billion in sales in 2013, reports the Tampa Bay Times. The deal is expected to close in July.

Losers of the Week: Hostess Executives
Under pressure from creditors, Hostess Brands announced this week that the company’s top four executives would cut their annual salaries to $1 “until the company either emerges from bankruptcy or Dec. 31,” the Houston Chronicle reported.

The Irving-based Twinkie maker had increased executives’ salaries in the months leading up to its bankruptcy filing in January, prompting creditors to question whether the company was attempting to get around rules limiting pay during bankruptcy. 

Last July, former Hostess CEO Brian Driscoll’s base salary was increased from $750,000 to $2.55 million. The four executives who remain at the company had received raises of 75 to eighty percent at that time, according to the Dallas Business Journal.