DoJ reportedly planning antitrust suit against Apple, publishers over e-books

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Comments

  • Quote:
    Originally Posted by jragosta View Post


    Whether the price is higher than the consumers want is totally irrelevant. Consumers don't get to set prices. The consumer's choice is only whether to buy at a given price or not.



    I would love to see someone explain exactly which law Apple is alleged to have broken. If you look at it, it is clear that Amazon broke the law (by fixing prices) while Apple offered an alternative that did away with price fixing by letting the publishers set their own prices.



    And the "but Amazon is cheaper" argument isn't very useful. It's not uncommon for a monopoly to set prices low at first to drive the competition out of the market and then raise prices after they've secured control.







    There's nothing illegal about a deal which says "you can't sell the same product cheaper to anyone else".



    Please explain what law Apple has broken by allowing publishers choose their own pricing.







    It's interesting that neither of those articles says anything about what Apple has done that's illegal or what law they've broken. There's a lot of innuendo, but nothing in the way of facts.



    So what law has Apple broken? Specifically.



    They are alleged to be in violation of the Sherman Antitrust Act.



    Look it up.
  • crewdogcrewdog Posts: 4member
    Apple is infallible and can do no wrong. Amazon is Evil. The End.
  • wakefinancewakefinance Posts: 855member
    Quote:
    Originally Posted by jragosta View Post


    Since you're backing the DOJ, you must have some reason. I'm still waiting for you to explain what you think Apple has done wrong.



    Unless, of course, your position is simply to take the side of anyone who attacks Apple for any reason. That seems more like your style.







    I'm not a lawyer and never claimed to be a lawyer. Nor have I ever given anyone the impression that I am.



    I am, however, conversant with the law as it pertains to business due to my background of running various businesses. I guess that makes me a world expert compared to 99.5% of the people posting here - including you.



    For someone conversant with the law as it pertains to business, I would assume you're familiar with the Sherman Antitrust Act of 1890 and the Clayton Antitrust Act of 1914. These laws allow the government to investigate any company that it believes to be working to set prices at uncompetitive levels. There is no distinct line drawn to determine when a company has become monopolistic or specifically what behavior is deemed uncompetitive. That is why the federal government investigates any company they believe to have the potential to become too powerful using uncompetitive practices. The initiation of an investigation does not mean that the company under investigation has indeed used uncompetitive measures in order to gain market share or to wield excessive power over the market. Instead it means that there is potential for such behavior given the size of the company and its known behavior and further investigation is necessary.



    So to answer your question of what Apple has done wrong, maybe nothing but maybe something. At this point it is far too early to call guilt or innocence. If it were already known, then there would be no investigation.
  • jragostajragosta Posts: 10,473member
    Quote:
    Originally Posted by wakefinance View Post


    For someone conversant with the law as it pertains to business, I would assume you're familiar with the Sherman Antitrust Act of 1890 and the Clayton Antitrust Act of 1914. These laws allow the government to investigate any company that it believes to be working to set prices at uncompetitive levels. There is no distinct line drawn to determine when a company has become monopolistic or specifically what behavior is deemed uncompetitive. That is why the federal government investigates any company they believe to have the potential to become too powerful using uncompetitive practices. The initiation of an investigation does not mean that the company under investigation has indeed used uncompetitive measures in order to gain market share or to wield excessive power over the market. Instead it means that there is potential for such behavior given the size of the company and its known behavior and further investigation is necessary.



    So to answer your question of what Apple has done wrong, maybe nothing but maybe something. At this point it is far too early to call guilt or innocence. If it were already known, then there would be no investigation.



    Please tell me exactly what Apple has done that falls under the restrictions of either the Sherman or Clayton acts.



    All they've done is told the publishers "we'll let you set your prices at whatever level you want". How is that collusive-especially when compared to Amazon who said "we'll tell you what price to charge and you can not change it"?
  • Quote:
    Originally Posted by jragosta View Post


    Please tell me exactly what Apple has done that falls under the restrictions of either the Sherman or Clayton acts.



    All they've done is told the publishers "we'll let you set your prices at whatever level you want". How is that collusive-especially when compared to Amazon who said "we'll tell you what price to charge and you can not change it"?



    According tot he WSJ, they told the publishers something in addition to that:



    Quote:

    As Apple prepared to introduce its first iPad, the late Steve Jobs, then its chief executive, suggested moving to an "agency model," under which the publishers would set the price of the book and Apple would take a 30% cut. Apple also stipulated that publishers couldn't let rival retailers sell the same book at a lower price.



    If you don't start with facts, your conclusion is unlikely to be correct.
  • hellacoolhellacool Posts: 759member
    Quote:
    Originally Posted by jragosta View Post


    Please tell me exactly what Apple has done that falls under the restrictions of either the Sherman or Clayton acts.



    All they've done is told the publishers "we'll let you set your prices at whatever level you want". How is that collusive-especially when compared to Amazon who said "we'll tell you what price to charge and you can not change it"?



    The part that seems to be eluding people is the second part of "we'll let you set your prices at whatever level you want", "But you CAN NOT sell for less to anyone else", Essentially killing the competition. If a book is sold to Apple for $9.99, that book will not be found anywhere else for less. That is the part that potentially could get Apple in trouble.
  • yensid98yensid98 Posts: 302member
    Quote:
    Originally Posted by Hellacool View Post


    The part that seems to be eluding people is the second part of "we'll let you set your prices at whatever level you want", "But you CAN NOT sell for less to anyone else", Essentially killing the competition. If a book is sold to Apple for $9.99, that book will not be found anywhere else for less. That is the part that potentially could get Apple in trouble.



    QFT



    This is what it's all about people. This is what is under investigation. The question is, does a contract that stipulates publishers must have uniform e-book pricing throughout the nation against the law.



    Remember, this is an investigation into the question. No charges have been made.
  • jarroyo1031jarroyo1031 Posts: 17member
    Quote:
    Originally Posted by JDW View Post


    Anti-Trust Laws are unnecessary and actually harmful to the market and the end consumer:

    http://video.google.com/videoplay?do...78685983789002



    (Video is from 1983, with Ron Paul and Prof. Dominick T. Armentano. Worth your time.)



    I do not agree with this. History makes it clear that anti-trust laws are necessary. I have lived in a country where monopolies are allowed and regulators can be easily bribed (Mexico), and it is not fun. Cell phone services can get very expensive in Mexico. Do you ever wonder how Carlos Slim became the wealthiest man in the world. I could go into great detail on how Mr. Slim did this, but if you're interested, you can look it up on google. Anti-trust laws are absolutely necessary and anybody that says otherwise is ignorant.
  • wigginwiggin Posts: 2,035member
    Quote:
    Originally Posted by waldobushman View Post


    "Me too" clauses are common and certainly not anti-competitive. And, your characterization that the "me too" clause controlling what other retailers were charged is not accurate. Publishers could charge other retailers whatever they wanted, but they had to give Apple the same deal.



    As for pricing that book purchasers pay, nothing is fixed here either. The publisher says that they need, say $12 for a title. That is what the publisher gets from the retailer. The retailer is free to charge whatever they want, probably including taking a loss on the deal, like Amazon was doing before Apple.



    As I understood it, the original agreement Apple had with the publishes wasn't with regard to the price the publisher charged the retailer. It was about the prices the other retailers were allowed to sell to consumers. Sure, Apple can say they want the publishers to sell to Apple for a price at or lower than what they charge Amazon. No problems there. But what Apple was doing (as I understood when this issue first came about) was indirectly dictating the prices that Amazon could sell to it's customers, the retail price. It would actually result in Amazon making MORE money from the higher prices, so why would Amazon complain? Because it fixed the prices (ie, price fixing) that they were allowed to set. They weren't allowed to sell to consumers for less than Apple (ie, anti-competitive).



    Now, I hadn't looked this issue since it first came up, so perhaps it was clarified as something different, but that's what it was at the time.



    Quote:
    Originally Posted by Maestro64 View Post


    A few people already made similar comments, IF the DoJ is going after Apple and the publisher for this then should going at a lot of other industries for similar practices. Hell they should have gone after Apple a long time ago, We all know that you can not buy a new apple product which they are current marketing for a lower cost anyway. All retail outlets who sell Apple products are require to sell at the price that Apple tells them they must sell at.



    But that is an agreement between Apple and their authorized reseller and has no bearing on the agreement Apple may have with another retailer. Also, you are talking about a single vendor (Apple), whereas Apple is viewed to have "coordinated" (ie, collusion) all (5 of 6) of the major publishers.



    Imagine if Best Buy were to go to all of the PC vendors (Apple, HP, etc) and orchestrate a deal which would effectively bar a Best Buy competitor, such as Micro Center, from selling any PC for less than Best Buys sells it. Best Buy saying they want at least as good of a whoelsale price as Micro Center is one thing. But getting the PC vendors to tell Micro Center they can't set a retail price lower than Best Buys is another matter.



    Quote:
    Originally Posted by jragosta View Post


    Whether the price is higher than the consumers want is totally irrelevant. Consumers don't get to set prices. The consumer's choice is only whether to buy at a given price or not.



    I would love to see someone explain exactly which law Apple is alleged to have broken. If you look at it, it is clear that Amazon broke the law (by fixing prices) while Apple offered an alternative that did away with price fixing by letting the publishers set their own prices.



    Consumer's don't get to set prices. Correct. But Apple should only be able to set prices for sales by Apple. Apple's agreement with the publishers also set prices that Amazon was able to sell at. Effectivley forbidding Amazon from competing with Apple on price. That is the very definition of anti-competitve.



    You keep asking for someone to explain how Apple might have broken the law (it's still just an investigation). But then you claim Amazon broke the law by "price fixing". So your turn to explain...what law do you think Amazon broke? They set prices and had agreements with each publisher. But where is the industry-wide collusion? How was Amazon saying how much Barnes & Noble could sell an ebook for?



    This may all turn into nothing, and most likely will. But there does seem to be at least enough to warrant an investigation.
  • jragostajragosta Posts: 10,473member
    Quote:
    Originally Posted by I am a Zither Zather Zuzz View Post


    According tot he WSJ, they told the publishers something in addition to that:



    Quote:

    Apple also stipulated that publishers couldn't let rival retailers sell the same book at a lower price.



    If you don't start with facts, your conclusion is unlikely to be correct.



    Quote:
    Originally Posted by Hellacool View Post


    The part that seems to be eluding people is the second part of "we'll let you set your prices at whatever level you want", "But you CAN NOT sell for less to anyone else", Essentially killing the competition. If a book is sold to Apple for $9.99, that book will not be found anywhere else for less. That is the part that potentially could get Apple in trouble.



    Please tell me which clause of the Sherman or Clayton acts that requirement violates. Hint: it doesn't. It's perfectly legal to sign a contract with someone stating that they will not give someone else a better price. Heck, it's a standard part of boilerplate contracts used by most Fortune 100 companies.



    So I'm still waiting for either of you to provide the specific section of the antitrust laws that Apple is allegedly violating.
  • wigginwiggin Posts: 2,035member
    Quote:
    Originally Posted by I am a Zither Zather Zuzz View Post


    Quote:

    As Apple prepared to introduce its first iPad, the late Steve Jobs, then its chief executive, suggested moving to an "agency model," under which the publishers would set the price of the book and Apple would take a 30% cut. Apple also stipulated that publishers couldn't let rival retailers sell the same book at a lower price.



    If you don't start with facts, your conclusion is unlikely to be correct.



    Yup. That is the exact part that could get Apple into trouble. This wasn't about price-fixing the wholesale prices, as so many here seem to think. It was price-fixing the retail prices.
  • wigginwiggin Posts: 2,035member
    Quote:
    Originally Posted by jragosta View Post


    Please tell me which clause of the Sherman or Clayton acts that requirement violates. Hint: it doesn't. It's perfectly legal to sign a contract with someone stating that they will not give someone else a better price. Heck, it's a standard part of boilerplate contracts used by most Fortune 100 companies.



    So I'm still waiting for either of you to provide the specific section of the antitrust laws that Apple is allegedly violating.



    I'm not sure how it can be made much clearer...you keep talking about the wholesale prices. The issue is Apple arranging with the publishers to fix retail prices, forbiding Amazon from competing with Apple on price.
  • island hermitisland hermit Posts: 6,215member
    Quote:
    Originally Posted by jragosta View Post


    It's perfectly legal to sign a contract with someone stating that they will not give someone else a better price.



    That would be fine if that's what it actually says.



    My interpretation of that clause is that the publishers are not to allow other retailers who buy the same book the right to sell at a lower price.



    If that's true then it looks like price fixing to me.



    (I see two other people got to that before me)
  • hellacoolhellacool Posts: 759member
    Quote:
    Originally Posted by jragosta View Post


    Please tell me which clause of the Sherman or Clayton acts that requirement violates. Hint: it doesn't. It's perfectly legal to sign a contract with someone stating that they will not give someone else a better price. Heck, it's a standard part of boilerplate contracts used by most Fortune 100 companies.



    So I'm still waiting for either of you to provide the specific section of the antitrust laws that Apple is allegedly violating.



    You are confused, that is OK. No one here is accusing Apple of anything, all we are doing is pointing out what the DOJ is accusing Apple of. If that violates the law, that will be determined in the courts, if you disagree, give the DOJ a call, tell them your credentials and I am sure they will dismiss this thing.
  • Quote:
    Originally Posted by jragosta View Post


    Please tell me which clause of the Sherman or Clayton acts that requirement violates.



    I'm not interested in playing your "You can't convince me" game.



    Sorry.
  • jragostajragosta Posts: 10,473member
    Quote:
    Originally Posted by Wiggin View Post


    I'm not sure how it can be made much clearer...you keep talking about the wholesale prices. The issue is Apple arranging with the publishers to fix retail prices, forbiding Amazon from competing with Apple on price.



    How does "we will let you set any price you want" fix retail prices?



    And where's the evidence that Apple has tried to do anything to control the price that retailers sell the items for?



    Quote:
    Originally Posted by island hermit View Post


    That would be fine if that's what it actually says.



    My interpretation of that clause is that the publishers are not to allow other retailers who buy the same book the right to sell at a lower price.



    If that's true then it looks like price fixing to me.



    (I see two other people got to that before me)



    Let's see your evidence that Apple conspired to prevent the publishers from allowing any retailer from selling at a lower price.



    Every report I've seen says that the publishers were not allowed to sell to any other retailers for less than Apple pays.



    Quote:
    Originally Posted by I am a Zither Zather Zuzz View Post


    I'm not interested in playing your "You can't convince me" game.



    Sorry.



    [insult removed]
  • galbigalbi Posts: 968member
    Apple is becoming the very company it hated 30 years ago.
  • pendergastpendergast Posts: 1,358member
    Quote:
    Originally Posted by jragosta View Post


    How does "we will let you set any price you want" fix retail prices?



    And where's the evidence that Apple has tried to do anything to control the price that retailers sell the items for?







    Let's see your evidence that Apple conspired to prevent the publishers from allowing any retailer from selling at a lower price.



    Every report I've seen says that the publishers were not allowed to sell to any other retailers for less than Apple pays.



    APPLE isn't fixing retail prices, the PUBLISHERS are. Apple is merely being targeted as a willing accomplice who either helped arrange the collusion or demanded collusion.



    A lone publisher can tell retailers what price to sell to customers all day long, although they may get into hot water. But the issue arises when major publishers all get together and collude on retail prices. It's not clear if that's the case here, or if they merely colluded to switch to the agency model. Either way, they are playing a dangerous game with price fixing.



    Keep in mind, all of the above is alleged.
  • island hermitisland hermit Posts: 6,215member
    Quote:
    Originally Posted by jragosta View Post


    Let's see your evidence that Apple conspired to prevent the publishers from allowing any retailer from selling at a lower price.



    Every report I've seen says that the publishers were not allowed to sell to any other retailers for less than Apple pays.



    You have to remember that Apple and the publishers (plural) agreed to raise the price to retailers, not lower it, therefore dictating that the retailers could not sell a book lower than Apple... unless, of course, they wanted to go out of business by no longer making a profit.



    If Apple had just asked for a better price, as in your example, then there wouldn't be an investigation.



    The raising of prices, by a group of publishers, to a fixed level, though, to allow Apple to play its game rather than play by the standard rules often warrants an investigation.



    Not for me to say whether Apple is in the wrong... I'm not from the DOJ.
  • hill60hill60 Posts: 6,949member
    Quote:
    Originally Posted by Gatorguy View Post


    You mean the book publishers in concert with Apple have already agreed to not compete on pricing and refuse to sell to any retailer who would sell at a lower price, therefor a level playing field for them?



    Here's what is claimed to be wrong with Apple's plan:

    "We told the publishers, 'We'll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that's what you want anyway,'" Mr. Jobs was quoted as saying by his biographer, Walter Isaacson.



    The publishers were then able to impose the same model across the industry, Mr. Jobs told Mr. Isaacson. "They went to Amazon and said, 'You're going to sign an agency contract or we're not going to give you the books,' " Mr. Jobs said."



    Unfortunate that the quotes were directly attributed to Mr. Jobs and frankly I'm darn surprised that he saw no issues with the plan. In hindsight, colluding with publishers to set prices and deny other seller's the right to market books at their own prices should be an obvious red flag to Apple. Perhaps not the best decision if they had it to do over IMHO



    "The Justice Department believes that Apple and the publishers acted in concert to raise prices across the industry, and is prepared to sue them for violating federal antitrust laws, the people familiar with the matter said."



    Why don't you look up the meaning of 'hearsay' evidence and it's value in a legal sense.



    It's what makes most of your post meaningless drivel.
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