DoJ suit against Apple over e-book pricing may arrive this week

Posted:
in iPad edited January 2014


The U.S. Department of Justice is readying an antitrust suit against Apple over alleged e-book price fixing and could launch the complaint as early as Wednesday, a new report claims.



People familiar with the matter said the DoJ could file suit against Apple and settle with "several publishers" this week, Reuters reported on Tuesday. The tipsters said the suit could come as early as Wednesday, but they also noted that a final decision has yet to be made.



A report last month claimed that the Justice Department had warned Apple and five of the "Big Six" publishers of its intent to sue. Simon & Schuster, Hachette, Penguin, Macmillan and HarperCollins have reportedly been negotiating with the federal agency over a potential settlement to avoid the suit.



At issue is whether Apple colluded with publishers to switch from the wholesale model used by Amazon to an agency model where publishers set their own prices for e-books. According to late Apple co-founder Steve Jobs, the publishers were willing to switch to the new model with Apple because they "hated" Amazon's practice of selling Kindle e-books below cost.











The European Union is also said to be investigating the issue. Apple and the publishers already face a class-action complaint over the matter. The complaint blames the iPad maker and the publishers for a price increase after Apple's iBookstore launched.



Late last month, reports emerged that Apple and the publishers were close to a settlement with the DoJ that would head off the lawsuit. However, The Wall Street Journal claimed last week that Apple did not agree to settlement terms from either the U.S. and E.U. Three of the publishing houses are reportedly amenable to the settlement, while the remaining two are believed to be unhappy with the terms.



[ View article on AppleInsider ]

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Comments

  • tallest skiltallest skil Posts: 40,509member
    Apple: "Fine."



    And then they lower the price of all their eBooks to $0.99 and drive every other bookstore out of business.



    Apple: "Is that what you wanted, DoJ?"
  • isheldonisheldon Posts: 570member
    Quote:
    Originally Posted by Tallest Skil View Post


    Apple: "Fine."



    And then they lower the price of all their eBooks to $0.99 and drive every other bookstore out of business.



    Apple: "Is that what you wanted, DoJ?"



    As if Apple didn't already do that to every record store? - drive them out of business.



    Who cares? Greedy publishers meet greedy music producers.

    It's too bad the newspaper publishers won't be affected with their pricing scams. Can you hear me NYT?
  • studiomusicstudiomusic Posts: 526member
    Ok, the way I understand it, Amazon was basically setting prices on their own and destroying the market for the ip owners by selling at a loss.

    So, Apple comes in and says "Hey, we'll let you set your own prices for your own ip."

    And Apple is the bad one here?
  • hill60hill60 Posts: 6,965member
    I didn't think America were such a bunch of socialists, government dictated pricing regimes are no substitute for a free market.



    Enjoy comrades.
  • quinneyquinney Posts: 2,443member
    Quote:
    Originally Posted by iSheldon View Post


    As if Apple didn't already do that to every record store? - drive them out of business.



    Rampant piracy was driving the record stores out of business before the iTunes store even existed.
  • charlitunacharlituna Posts: 7,081member
    All of this is rumor. It's rumor that the DOJ ever started looking, that anyone has settled, that they are going to file a suit etc.



    and it's rumor what they are going to file it about. It's less likely they give a fig about whether the pricing is wholesale or agency. Stores have a right to set up whatever system they like.



    All the DOJ is likely to be concerned about is the favored nation clause and if there's anything in Apple's terms that force publishers to demand agency pricing with other stores. Because those are the types of actions that might be anti-trust. But if the publishers are free to make whatever demands they want and they choose to say 'agency or we won't renew' that's not on Apple
  • isheldonisheldon Posts: 570member
    Quote:
    Originally Posted by quinney View Post


    Rampant piracy was driving the record stores out of business before the iTunes store even existed.



    THe $0.99 per song model driven by Steve Jobs drove the final nail in the coffin.
  • isaidsoisaidso Posts: 750member
    Quote:
    Originally Posted by iSheldon View Post


    THe $0.99 per song model driven by Steve Jobs drove the final nail in the coffin.



    Yeah right

    In point of fact, it's what saved the entire industry.
  • diplicationdiplication Posts: 602member
    Quote:
    Originally Posted by studiomusic View Post


    Ok, the way I understand it, Amazon was basically setting prices on their own and destroying the market for the ip owners by selling at a loss.

    So, Apple comes in and says "Hey, we'll let you set your own prices for your own ip."

    And Apple is the bad one here?



    We're on the same page. From my perspective Amazon was the one using unfair business practices, Amazon was setting the price to drive the competition out of business. Apple appears to be more free market oriented - let the publishers set the price. I'm not saying I'm right, that's just how it appears to me. If someone could explain the opposing point of view, enlighten me, I sincerely want to understand.
  • nasseraenasserae Posts: 3,144member
    Quote:
    Originally Posted by iSheldon View Post


    THe $0.99 per song model driven by Steve Jobs drove the final nail in the coffin.



    Trying to rewrite history I see. As pointed out by other posters it was piracy not iTunes. The move to digital music was going to happen with or without iTunes.
  • nasseraenasserae Posts: 3,144member
    Quote:
    Originally Posted by Tallest Skil View Post


    Apple: "Fine."



    And then they lower the price of all their eBooks to $0.99 and drive every other bookstore out of business.



    Apple: "Is that what you wanted, DoJ?"



    They don't have to go $0.99 per book. All they have to do is 50% less than the cheaper than the lowest offer.
  • djkikromedjkikrome Posts: 186member
    Quote:
    Originally Posted by studiomusic View Post


    Ok, the way I understand it, Amazon was basically setting prices on their own and destroying the market for the ip owners by selling at a loss.

    So, Apple comes in and says "Hey, we'll let you set your own prices for your own ip."

    And Apple is the bad one here?



    My thoughts exactly. How is Apple wronging anyone?!? By not letting Amazon screw the writers/publishers?
  • tylerk36tylerk36 Posts: 1,037member
    Flex them muscles DOJ. Hrumph. See my pecks. GRRRRRR. The big bad US DOJ. Look out Apple they went after Microsoft now they are coming after you. Wheres the beef?
  • SpamSandwichSpamSandwich Posts: 24,921member
    Quote:
    Originally Posted by iSheldon View Post


    As if Apple didn't already do that to every record store? - drive them out of business.



    Who cares? Greedy publishers meet greedy music producers.

    It's too bad the newspaper publishers won't be affected with their pricing scams. Can you hear me NYT?



    TechStud, you are an unusually resistant superbug.
  • drobforeverdrobforever Posts: 400member
    Quote:
    Originally Posted by diplication View Post


    We're on the same page. From my perspective Amazon was the one using unfair business practices, Amazon was setting the price to drive the competition out of business. Apple appears to be more free market oriented - let the publishers set the price. I'm not saying I'm right, that's just how it appears to me. If someone could explain the opposing point of view, enlighten me, I sincerely want to understand.



    Apple appears to help the publishers collude and fix prices, that's the concern. In a sense, it's not really Apple's business, the publishers are the ones who want to do price fixing, but the fact that Apple setup a model that allows/facilitates the price fixing is probably what's getting Apple in trouble right now. It has nothing to do with whether Apple is fixing prices or not (Apple isn't).
  • mdriftmeyermdriftmeyer Posts: 6,900member
    Quote:
    Originally Posted by drobforever View Post


    Apple appears to help the publishers collude and fix prices, that's the concern. In a sense, it's not really Apple's business, the publishers are the ones who want to do price fixing, but the fact that Apple setup a model that allows/facilitates the price fixing is probably what's getting Apple in trouble right now. It has nothing to do with whether Apple is fixing prices or not (Apple isn't).



    Really? If that's the case what stopped Amazon from doing this ahead of time? Oh that's right! They're benevolent.



    In reality, Amazon was undercutting Publishers to strike long-term contracts favorable to their aims and were pissed when Apple came in to aide the publishers not by allowing them to hike their product at high premiums [$15 Textbooks are a fraction of the cost of print textbook equivalents] but instead provided a platform that is consistent, the most popular amongst professional developers making money and the one that providing the richest publishing environment to reduce their costs of in-house development.



    Source: http://investor.mcgraw-hill.com/phoe...554&highlight=



    Quote:

    For the first time ever McGraw-Hill is producing high school curricula specifically for the iPad. The initial group of McGraw-Hill Education titles made available as iBooks Textbooks includes Common Core State Standard editions of Algebra 1 and Geometry, as well as, Biology, Chemistry Matter and Change, and Physics Principles and Problems. McGraw-Hill's iBooks include key interactive features, such as:
    • Interactive images and 3D animations ? Students tap images to zoom, reveal information or rotate objects so they get multiple perspectives.

    • Keynote presentations ? These supplemental slideshows include highly interactive animations.

    • Multimedia ? Full-screen video and animations.

    • Interactive quiz questions ? Students test their knowledge by taking short, easy-to-use quizzes.

    • Additional features ? Including interactive glossary terms, highlighting/bookmarking capabilities, flashcard builder and cross-referencing of index terms.

    "The McGraw-Hill curricula, together with iBooks Textbooks, combines McGraw-Hill's years of experience in developing comprehensive educational programs and Apple's iPad to improve learning outcomes," said Bob Bahash, president of McGraw-Hill Education. "At the same time, this combination provides a large and growing opportunity for McGraw-Hill Education since many school districts have turned to the iPad as a tool to drive student engagement and achievement."



    The statement in bold is the reason Amazon is pressing the DoJ to investigate and proclaiming collusion and other hanky wrong doings.



    They are getting cut out of the digital frontier meaning the Publishers have no designs of providing a Cloud Service subscription plan for the Kindle/Android Market.



    The superior platform end-to-end is actually owning the market and that pisses off the competition.
  • gerbintogerbinto Posts: 12member
    Quote:
    Originally Posted by studiomusic View Post


    Ok, the way I understand it, Amazon was basically setting prices on their own and destroying the market for the ip owners by selling at a loss.

    So, Apple comes in and says "Hey, we'll let you set your own prices for your own ip."

    And Apple is the bad one here?



    No, the issue is as follows. Amazon was paying what the publishers wanted for the e-books and then undercutting the price when they sold it. The publisher's lost no money from this, Amazon did. However, the publisher's did not want e-books to subplant the physical books. Kind of what Apple/iTunes did to the CD. Therefore they waited until Apple came along, colluded together to set the most favored nation clause, and then used this leverage to FORCE Amazon to change their model.



    Regardless if you feel that Amazon was doing things wrong, according to the law they weren't. One company can take losses on any product they want and it's perfectly legal. However when a company colludes with other companies/competitors to artificially set prices that would either force competition out or force competition to adopt the same prices, then that is illegal.
  • cycomikocycomiko Posts: 716member
    Quote:
    Originally Posted by quinney View Post


    Rampant piracy was driving the record stores out of business before the iTunes store even existed.



    Rubbish. The iTunes led change from album to single drove a major change in purchasing choices for music. Combine this with the large retailers moving music into a loss-leading proposition meant other smaller players failed.



    Blaming piracy is the route of an industry failing to market evolution.
  • gatorguygatorguy Posts: 15,070member
    Quote:
    Originally Posted by djkikrome View Post


    My thoughts exactly. How is Apple wronging anyone?!? By not letting Amazon screw the writers/publishers?



    What makes you so certain that Amazon isn't saving the publishing industry? Apple comes in with .99 songs via iTunes, killing off whatever remained of the independent record stores, yet credited with saving industry as a whole. Isn't that the same thing Amazon was doing yet this time it's Apple and the publishers resisting change? I think a whole lot of books have been sold thru Amazon that otherwise would never have been distributed via the traditional methods. Doesn't sound so different from the music wars to me.
  • eriamjheriamjh Posts: 949member
    Collusion isn't part of a free market. I think Apple illegally increased prices of books.



    Old schoolers want electronic versions of books and music to be the same price as physical copies are/were. The truth is they're just being greedy.
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