DoJ reportedly planning antitrust suit against Apple, publishers over e-books - Page 2

Makes. No. Sense.

The only ebook publisher with monopoly power is Amazon.

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.

1) I specifically referred to Ron Paul, a politician. And a medical doctor.

2) You gave no summary: you simply asserted that they say antitrust laws should be repealed because they are harmful and unnecessary. Take the time to give us a gist of their arguments as to why they think that?

Here's how I see it:

If I'm not mistaken, things get fishy when a manufacturer/publisher/etc dictates the price a reseller sells a product for, especially when they get all of their competitors to do the same. That's generally lumped under price fixing. Usually, prices are suggested, a la MSRP. But when you get all the main players to gang up and force resellers to sell at a certain price, that can get illegal.

Ironically, this move potentially saved the industry. So do the ends justify the means? Is iBooks considered a reseller? Common sense says that Amazon's traditional approach was harming competition, not the other way around. Anti-trust laws are supposed to protect the market. Did this violate the letter of the law, but maybe not the spirit?

Either way, likely the brunt of this is directed at the publishers, but by being an accomplice, Apple could also be guilty.

"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.

So neither of us is qualified (or just as qualified) to make a legal judgement then since I too have run a couple of businesses and owned two others. Still do as a matter of fact.

Perhaps you missed that I didn't originate the article here at AI, nor the one at the WSJ. I suppose that makes them guilty of an anti-Apple tirade too?

FWIW, I already explained what I personally think the problem is. Simply read my previous post where Steve Jobs is quoted. Does it bring it up to the level of an anti-trust sui? I have no idea nor am I any more qualified to say than you are. We aren't going to bring up reading comprehension again are we?

Indeed. And you also condemned me as a shill, which by definition assumes I am associated with the man somehow but trying to cover it up. Again I say, "preposterous!"


I gave a one sentence summary, which is sufficient for most reasonable people to determine if they should watch the video or not. Your persistence in beating on me goes a long way to explain why you average 4 posts per day, every single day of the year. You appear to gain tremendous satisfaction by arguing endlessly about frivolous matters. If you want more information, just watch the video. Then if you like or dislike what you see, we can then have an "informed" argument. If you are frightened to click on a link, then Google about it first to ensure I am not planting a sinister virus on your computer! But I will not entertain you further with arguments over why my "summary" is unacceptable to you personally.


I disagree with the DOJ stance against Apple because I disagree with Anti-Trust laws in general. I disagree with Anti-Trust laws on the basis of what I have already said; namely, that they do more harm than good. If such were my personal opinion, it would matter little. But there are economic experts out there who support free markets and who do not support current Anti-Trust laws in the United States. It is at times like this that we would do well to ponder whether we need these laws or not.

To quote Prof. Armentano in the video, "The source of monopoly is governmental power."

Once again, here is the video link:
http://video.google.com/videoplay?do...78685983789002

Again, I posted this link to simulate thought on whether we really need Anti-Trust laws. I personally feel we don't. And my personal feelings have nothing to do with Apple. This article simply served as a means to stimulate my interest in posting on the subject.

Though not directly on point for this story, there is a general pattern of anti-competitiveness in how the courts support and balance the definitions of monopoly.

Too often, the courts simply look at the cost to consumers to determine if a merge of competitors is acceptable. If it can be argued that the consumer will not pay more or will pay less after the merger, then the merge can proceed, all else being equal. The merger, by definition then, decreases the number of competitors in the economy, often leading to job layoffs, and increase control of an area to a shrinking number of players, and less alternatives for those wishing to purchase products and services.

I might be in the minority, but I find being referred to as a "consumer" quite derogatory. I'm a producer, and I want to charge and be paid fairly for my product. I want my prices to be set in negotiation with my ultimate customers, not by a middle man who sets the prices and controls access to my customers.

The agency model allows me that. This is no different from using real estate agencies to help sell your house. You set the price, and each agency works on your behalf to sell the house, and they take a cut. The price you set for your house is the same for all potential buyers, regardless of the real estate agency that is hawking your house. The cut for each agency might be different, they may be offering better or worse services for their cut, but ultimately, agency which is better at finding me buyer gets the cut.

Where the hell was Apple legal when these agreements were drawn up. Surely Apple must have one lawyer on hand who is proficient with anti-trust law.

I do think there might be a case against Apple and the publishers just by the fact that there is a clause that states the publishers can't sell the books at a lower price in any other place. Take that out and there is nothing, imo.

[insult removed]

The problem with your argument is that Apple doesn't dictate the price. In fact, Amazon is the one who was dictating a price.

Now, your argument is an interesting one - it is true that the publisher can not dictate the price that the distributor sells the product for, but if that is the problem, then DOJ should be going after the publishers, not Apple. But that's not going to get anywhere. The publisher is not dictating the price to Apple. Instead, Apple is simply making their markup known to the world - which is entirely legal.


Whether that's true or not, the difference is that you apparently never learned anything about the law - at least based on what you've been posting here.


You're talking out of both sides of your mouth. On one hand, you say "it's not my argument, it's the DOJ's argument, so don't ask me to justify it". On the other hand you say "I've already explained what I think the problem is". So which is it?

And since you're claiming to have presented your views on what you think the problem is, then you should be able to tell us exactly what laws you think Apple has broken.

I have a hard time believing you truly have a problem with reading comprehension. If your post really is on the up-n-up and not simply arguing to argue, slowly reread my last answer. It's all there.

Mainly, what we learn from this article is that either,

a) the lawyers in anti-trust at the DoJ are fools (perhaps all those political hacks hired by the previous administration), or

b) that Amazon has bought themselves enough influence in Washington to have the Feds go to court to prop them up.

I think it's a 50/50 chance either way.

Clever rhetorical maneuver on GG's part. Notice how he avoids the direct question with the implication that he's already answered it. This is an excellent move when you're cornered with contradicting yourself and need a good diversionary tactic.

Which one of your self-contradictory positions do you want me to rely on?

And considering that you haven't yet given any specific laws that you think Apple has broken (and refuse to do so even when asked repeatedly), it's rather moot. The answer must be that your position is purely based on supporting anyone who attacks Apple regardless of the facts of the matter.

I did assume that you were associated with the man (not that I have anything against him; just a politician thing on my part), and that was unwarranted on my part. If, as you say, you were not, I apologize.


Antitrust laws are simply a means by which regulation seeks to level the playing field for consumers to move towards economists' ideal that in a truly competitive marketplace, price should equal marginal cost (since that maximizes social welfare).

It is, in principle (at least as I understand it), a means for regulators to attempt to achieve allocative efficiency in the marketplace. They may or may not achieve that in practice (or may overstep their authority) but I do not find much to quarrel with the underlying ideal. Indeed, a vast majority of economists would probably agree with that position. We also know that this US institutional innovation has been widely adopted the world over (along with two other innovations: the SEC and the Fed, both of which also, I happen to agree with in principle).

To say that source of monopoly is governmental power is a stretch. Are you -- is he -- saying that there are no natural monopolies? That private producers cannot have power over consumers that can be detrimental?

PS: You may wish to reconsider your own slam when you say: "Your persistence in beating on me goes a long way to explain why you average 4 posts per day, every single day of the year. You appear to gain tremendous satisfaction by arguing endlessly about frivolous matters." Or, at least, have the courtesy to explain what: (i) The number of my posts have to do with anything at all; (ii) Other than for a normal quota of posts that are meant to be obviously frivolous (usually followed by a smiley or a /s, etc; and probably no different from that of the typical poster here) what you see as being "endlessly frivolous" in my posts.

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. The government can not tell a company what price they must sell a product at nor can they keep company from striking deals to ensure their product is always sold at a particular price.

The fact that Apple offered the publishers a better business model to sell their products is not against any law either. Now if the Publisher choose to renegotiate their deals with other retail out lets that is their choose as well.

Yes the publisher hated the fact Amazon was giving away books as lost leader which brought in more customers. The publisher had no real power over this since we all know they always over product books and Amazon was always more than ready to take them off their hands and move them at what ever price got them out the door.

Well the world has change, you can not over produce Ebooks, so now the publisher do not have to worry about fire sales to get rid of them and they can not have more control over what price their products are sold for.

So now Amazon and others are upset that some came in and changed the business model on them and they do not know how to compete anymore, ah it sounds like the music industry. In this case the Publisher were smart enough to get ahead of the curve before all the value in their product gets destroyed.

The other part of this which I do not quite understand when it comes to pricing fixing, this usually applies to a product which multiply companies make the same product, like gasoline, where everyone is charging the exact same price for the the exact same product. In the Case of a book, only one publisher products a book, so if want Steve Jobs book you can shop around to different publisher to get the best price. How can the DoJ claim pricing fixing. Also when new books came out many time they were $19.99 or $29.99 does that mean over the years all publishers agree to see a new book for that price. No, it just how retail pricing is done.

It will be interesting to see the outcome of this one to see how the government justifies their legal position on this case.

I guess you really are having a hard time following along. Here's all my opinions on the matter that I've posted so far:

From post 27: When the investigation is terminated, and if Apple and the publishers haven't already offered to make changes to avoid any possible charges, then you'll see what the EU/US has in mind. Perhaps nothing. Perhaps a high-profile antitrust lawsuit, maybe even on both continents.

From post 30: 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

From post 46: Does it bring it up to the level of an anti-trust sui(t)? I have no idea nor am I any more qualified to say than you are.

These are the only opinions I've offered on how I see the issues. Which one of those are contradictory sir?

Note, in my argument, Apple equals the reseller, who has every right to set the price. However, it is the publisher who is fixing the price for not just one, but resellers in general. Note also, this in and of itself may not be illegal, but colluding with all the other major publishers may well be illegal.

Apple's markup is in no way illegal, but by being part of the alleged collusion, they could be in effect an accomplice, much like you can be an accessory to murder.

Again, my position is that this was essential for the survival of an industry, so how does this fit with the spirit of the law? Then again, are publishers really worth saving? With the advent of eBooks, eventually they will be as defunct as the music studios.

The purpose of antitrust laws is to preserve a competitive marketplace. The purpose of a competitive marketplace is ultimately to provide the best products to consumers at the lowest prices.

The DOJ is on OUR side. These huge megacorporations are free to do what they want, so long as they don't abuse their power in a manner which hurts people like you and me.

We should all be glad that the DOJ is looking into this. They are not our enemy - big corporations who collude to get rid of competition are our enemy.

I'm pretty sure that you know a lot more than the DOJ about the relevant law.

I think that you should call them on the phone and explain things to them so that they don't waste any more time.

/s

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

Look it up.

Apple is infallible and can do no wrong. Amazon is Evil. The End.

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"?

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


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

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.

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.

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.


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.


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.

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.

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.

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.

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)

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.

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

Sorry.

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.


[insult removed]

Apple is becoming the very company it hated 30 years ago.

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.

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.