US government files antitrust suit against Apple over e-book pricing [u] - Page 5

It seems you really don't understand the Agency pricing model. Dropped.

No Apple said publishers couldn't sell to other retailers for less than they sold to Apple. Apple's deal didn't prevent retailers from charging more or less than Apple only what the other publishers charged other retailers. Most favored nation clauses are fairly common. .

It seems you don't understand how this one worked.
Dropped.

Of course, collusion does not apply to our own Federal Reserve, a privately owned corporation that colludes with banking institutions and our very own government to manipulate our currency... Heavens... we'd never want them held accountable.

If there was any collusion, it would be between the book publishers, not Apple. They were already colluding to try to combat Amazon's pricing before Apple came along!

Sorry but I think that YOU are the one that doesn't quite get it. Apple's agreement is that APPLE can lower the price to match another online bookseller (like Amazon). NOT that others have to match the iBookstore price.

As far as I can tell, it's the Publishers that are being taken to task over pricing, Apple (and specifically Steve Jobs) happen to be the club used by Publishers against Amazon.... ie... something like this "We (publishers) won't be making Certain Books available to you (Amazon) because YOU are selling for LESS than our wholesale price!" Like I said, Apple's Agency Model was used as a great big bargining chip by the Publishers. Apple has great success via the iTunes Store... Publishers believed they would have great success selling via the iBookstore. Can't say that's true because I have chosen Amazon time and time again to buy from and not once chosen the iBookstore.

Is my logic incorrect? If so, how?

It's obviously not bullshit to anyone with rational thinking.

Then Apple doesn't have a thing to worry about. You feel everything was legal and above board. The DoJ must have some other goal in mind by filing this lawsuit?

Predatory pricing is what its called, Walmart specializes in it to shut down whatever local businesses there may be. It's not illegal but definitely frowned upon.

I have a young son and have purchased quite a few children's books from Amazon. The physical book is priced at $3.99 while the kindle edition is $2.99, which makes sense since the e-book wasn't printed, nor shipped to a warehouse, nor stocked on a shelf, nor packaged by a Amazon employee, and shipped, nor was it handled by various UPS employees. The only saving grace Amazon has is that the physical book is still listed and available for purchase. I look at it just like the dollar menu at your local fast food joint, most people end up ordering higher priced items, if you buy a e-book below cost but purchase more items at full price then Amazon made out.

You have made the point perfectly. Thank you.

I promised myself I wouldn't reply anymore but then I ran into your post...

"Meanwhile Amazon sells products at a loss and put major book sellers out of business"

- SO WHAT?? This IS NOT illegal.

"Since when is buying products below cost a consumer right?"

- You are joking right? Selling an item below cost is a FREEDOM of choice. I can choose to sell my item, and lose money, or I don't have to. Selling at a loss to get more customers is a fundamental cornerstone of business, it is not illegal and it is a right.

On a side note, how are you enjoying those $9.99, and below, music CDs? I remember when a album used to cost 16.99 to 20.99. Heaven forbid you buy a 2 CD album, that would set you back $30. Do you know why prices are low now? That's because the big music stores were found guilty of price fixing, the same thing Apple and the others are accused of...gasp!

http://www.usatoday.com/life/music/n...ttlement_x.htm

Thanks for posting the link. I read it, and you're absolutely right. It's essential reading and many comments posted here based on sound bites in the media are wide of the mark.

The big issue that many do not get is that digital distribution invalidates the economics of paper publishing. You no longer have to make big bucks on bestsellers to cover losses of warehouses full of unsalable stock. Amazon gets it. The DoJ gets it. I'm no so convinced, having read the complaint, that Apple gets it.

For example, some of the alleged discussion is about protecting the pricing of hardcovers by pricing up ebooks, something Amazon doesn't support. Nor should Apple.

By the way, iBook Author makes us all "publishers"... at least thru the iBookstore. I use Adobe CS5 for other ebook creation.

My guess is that they are very "interested" in it, but since it is no longer happening, the DOJ has bigger fish to fry.

Based on nothing other than a guess, FWIW.

uh, no, I don't know what you're reading, but from the complaint itself


This says in black and white that the price paid to the retailer MUST be the same. This is how the agency model works, the retailers must sell their book at a set retail price. Granted, the book publishers could agree to sell books to a retailer for less money than someone else, but the RETAIL price that consumers pay on the books had to be the same.

This is limiting competition.

Phil

You talk as if Apple has already been found guilty.

I'm pretty sure the DOJ would only be interested in this if amazon was doing this to artificially lower prices to knock their competitors out of business and then planned on raising their prices accordingly. I don't think there was any evidence that this was the case. As many others have said, stores are allowed to sell "loss leaders" at a price lower than wholesale to attract people into their store, and this goes on all the time (just go to any grocery store). This is a legal action, and saying otherwise would imply that most EVERY retailer across the country has broken the law.

Phil

The brief claims that consumers have overpaid for ebooks in the thousands due to the alleged collusion, but that simply can't be proven. In the old model, the retailer sets the price which isn't set in stone. How can the DoJ prove that the prices would not have increased regardless? Once Amazon had killed off/weakened most of its competitors, nothing would shave kept them from increasing prices. In fact, because Amazon was selling the books at a loss, it is much more likely that the prices would increase and not stay the same or drop.

Great link. The Verge has summarized the key parts here: http://www.theverge.com/2012/4/11/29...le-an-analysis

Never mind.

That Apple made $0 off your purchases.

Of course they do.... Money! Huge penalties against the biggest company on Earth!

The Verge has the best tech reporting on the web, other than ArsTechnica.

Sounds very much like the publishers and Apple wanted to form a "union" (which many of you here hate) and "collectively bargin" with Amazon. Amazon's business model is one Apple cannot compete with, and the worse part about it is that with the Kindle app one can buy a e-book from Amazon and read it on a idevice. Oooooo that really gets under Apple's skin. The e-book market existed before Apple and if they can't play by the current business model then they should play along or go home. It's a dog eat dog world.

So you're saying the government needs money.

What money did the puiblisher lose for amazon taking a hit on price?

Because it isn't a monopoly.

With over 75% market share of the ebook business it can viewed as a monopoly.

How many competitors did Apple put out of business with iTunes? How many major music selling chains are long gone? Did you scream bloody murder then or only now because its not Apple doing the eliminating?

Apple has nearly that market share in music, so by your logic they're a monopoly.

Or at a minium, anti-competitive. So weird, that now that there's competition the creators of the product have regained control. Now if the publishers got in the same room and talked this out or Apple acted as a mediator and truly presided over the transition for all parties, I'm on the DoJ's side.

Just gonna wait to see how it plays out in the courts. The DoJ's complaint now has to be proven.

But Apple's not selling at a loss. There were two parts to his sentence...

Perhaps we're all missing the real reason for the Department of Justice lawsuit. I remember reading that Apple has a lot of profit generated outside of the United States, cash sitting around in foreign banks. Maybe all Apple has to get rid of the lawsuit is to bring all those offshore profits back into the United States....where they can be taxed. Just because you're paranoid doesn't mean people aren't out to get you.

The BusinessInsider has the full complaint and supporting details:
http://www.businessinsider.com/doj-l...ks-2012-4?op=1

Was it written in invisible ink? I didn't see a second part. Apple couldn't possibly sell music at a loss because he never buys it in the first place. They set the price 99¢ for a song of which Apple gets 30% of, the music industry resisted but finally gave in to Apples model. So now its Amazon telling publishers what price they want to sell e-books at and because Apple can't make money with that business model it has joined with the publishers to create a business model that benefits Apple.

What makes you think Apple makes substantial money from content? Apple makes its billions on hardware not ebooks.

Not my logic. Logic of the law. Look it up.

... and, yes, Apple could be viewed as having a monopoly in the digital music industry. It's how you get there and how you use that position that usually gets you in trouble.

... and there were two parts to SolipsismX's comment (not mine)... the part about selling for a loss.

I see where youre going, but you missed my point, even though it was a half serious point. Apple has a lot of profits that the government would like to be able to tax but can't. Perhaps another additional motive for the lawsuit is to leverage Apple to bring those profits home where they can be taxed. You can bet if Apple moved those profits onshore, the case would be resolved in terms Apple could live with. Again, I'm not really serious, but I couldn't count out this impetus for the lawsuit either.

It has nothing to do with how much money is at stake, they can't stand that the current business model was not created by them.

Sorry, it was from the quote you quoted:

Originally Posted by SolipsismX -- "This begs the question: Why isn't the DoJ interested in Amazon using it's monopoly position to sell at a loss to keep competitors out of the market?"

By your same logic that Apple never buys music, can it be said that amazon never buys ebooks?

To complete the previous comparison, if Apple paid studios their $.66 and sold the song for $.50 it would be similar to what amazon has been pulling off. There'd have to be a related product that Apple was using to make up the difference. Now Apple is applying the same model it uses for music to books. The only difference I see is they aren't selling you chapters out of the book like they sell tracks from CDs.

Frankly, with the number of tech books I used to buy, I'd much rather just buy the chapters that pertain to what I need to know. This is the reason I have an unlimited subscription service from safaribooksonline.com.

I don't see evidence (yet) where Apple colluded the publishers to restructure the deal with amazon. I don't see price fixing between publishers or tiered pricing that the DoJ says "could" happen. I think the conclusion that because average price went up there has to be price fixing and collusion isn't a sure thing. Apple entering the eBook segment did result in the publishing houses gained leverage against amazon and amazon has to react by innovating and differentiating.

I think the DoJ is conveniently not pointing out that amazon didn't have much competition in the ebook biz they pioneered because it's bad for their case. Amazon's pricing model was a deterrent to competitors because of the lack of an online market or a tablet with a substantial user base. Along comes Apple and the publishing houses welcomed a new distributor.