US government files antitrust suit against Apple over e-book pricing [u] - Page 2

Spot on.

A bunch of the publishers named in the suit have already settled -- that's how innocent everyone is in this collusion.

It's going to be hard for Apple to claim they didn't collude when people they allegedly colluded with have admitted they did.

I'm not sure Apple is at fault here. It's not like iBooks is the only way you can buy books.

I think we've got a NEW CONCEPT HERE: Preemptive Monopoly Busting!

Kind of strange since our justice department is mostly useless as far as protecting us from oil spills, tax cheat who pay less than 2% in taxes, bankster embezzling and malfeasance, mercenaries and for profit wars, sham privatized utility companies that fix prices and only compete with different letterhead, bogus competition in access to the internet, and of course, Microsoft Windows holding back progress for over a decade with market collusion and "embrace and extend" as they stole the IP of company after company.

Of COURSE Apple is going to own this market. But obviously, Amazon has more friends in higher places and their lobbying efforts have paid off. Why use the courts when you can use a pet Senator, after all?

Why ask someone their name, when you can just get nervous and preemptively shoot them IN CASE they were planning to do something wrong?

Pre-emptive everything is the NEW justice!

True- the big house publishers to the masses are the ones guilty.
The eSheep are the ones suffering in their billfolds.

You could certainly argue this.

That doesn't seem to be the concern with dumping though. The concern is that once a company obtains the monopoly they will increase prices. Amazon wasn't doing this. If e-books are considered to be the same class as hardcopy books, then they might have been doing this, however it still seems that their goal was to reduce wholesale costs and not increase prices, just like Wallmart does.

Definitely an interesting case.

I'm guessing the problem is not if you could get cheaper e-books from Amazon. The problem is that the price of e-books is set by Apple. iBooks is not the biggest e-books seller but it gets the biggest or the same discount. For Amazon to be cheaper, it has to reduce its margins but will never be able to get volume discount because Apple said so.

Show me where Apple said that content owners couldn't use other digital stores to sell their music or wouldn't allow them to sell their music at a lower price or DRM free outside of the iTMS/iTS without fear of being dropped by Apple?

Bottom line: Apple never forced the content owners to use it or else.

I don't see the equivalence: in BOTH CASES, it's everyone else complaining about Apple.

With Music they were too low -- now everyone has benefitted from standardized contracts (or at least MORE standardized) and Amazon sells things cheaper. Apple CREATED the market that was nothing but illegal MP3 swapping before they arrived to provide an electronic service that internet users would actually pay for.

With Books, they entered the market LATE -- now everyone is complaining they charge MORE? Regardless of how everyone here went Ballistic -- it's once again, the industry trying to force a pricing model on Apple, and in this case, they aren't even the big dog.

Let's at least wait for them to have over 50% of the market before we bust the "collusion and monopoly" of their eBook market.

I want cheaper books -- and I don't plan on buying ANY books at these prices from Apple.

It's too bad these eBooks aren't made/written in a FoxConn factory so everyone could have a shit-fit about how the books should cost more to pay the workers/writers. Everyone would pay more to support a poor worker in a work situation they know nothing about. >sarcasm< (in case you didn't get it already)

Unfortunately they are in mindshare so that means asshats around the world start getting excited to see Apple fail at something regardless of how this helped the publishing industry and therefore consumers or how it allows Amazon to create longterm damage on the publishing world... so long as Apple gets knocked down a peg.

What a great method of defining words!

Love makes the world go around.

You can say the same thing about angular momentum. Hence, Love is a physical property of the universe.

You can say the same thing about electric charge. Hence, Love has voltage and current.

You're right about one thing, many people seem not to comprehend the issue, and you're one of the ones who doesn't. (Actually, you do, you're just pretending not to.)

The issue is that Amazon is leveraging its dominance in online retailing generally, and traditional book selling particularly, to completely control the e-book market, drive other e-book, and traditional, booksellers out of business, and establish complete control of the publishing industry. In other words, to create a market where Amazon is the only place you can buy or sell books, eventually allowing Amazon to dictate price at both ends.

Amazon's primary goal is to use e-book dumping as a means to drive other booksellers out of business. Their secondary goal is to establish hegemony over publishers that will allow them to control what they have to pay publishers for books, and even to control what books get published at all. (If Amazon doesn't want to sell it, once they are the only game in town, there won't be any reason for the publisher to "print" it.)

It's particularly hypocritical of posters like Asherian, who have come here time after time disparaging Apple's "walled garden" on, among other pretexts, that Apple effectively engages in censorship, and lauding Google's (pretended) "openness" as the key to our salvation, to come here and argue that Apple is in the wrong for taking a course that promotes free and open markets in publishing and that Amazon is an innocent lamb when clearly their intent is to establish de facto control of an entire industry.

It's inconsistencies like this that show who's here for honest discussion and who's here with an agenda that doesn't depend on honesty.

LOL, Monopoly of what?

Agency model would simply means publisher finally gets to set the own god damn price!!!!
Instead of losing money because Amazon couldn't care less!

Can someone explain to me the difference between these two, since AI did not? I see differing things in these threads that seem confusing.

Yes, let's get rid of the site's emoticons. They're distracting and detract from the message in the post.

Never mind that people can't parse satire without them.

Publishers weren't losing money. Amazon was losing money.

Many musicians and record labels were against iTunes selling single songs at $0.99.
They wanted a minimum of $1.29
And from an artistic effort, one song did not an album make; the whole album was the 'picture'.
But a bigger problem was the ease of coping & downloading songs for free.
In the end, the record companies & artists caved because .99 was better than nothing!

But in the iBook case, it's not the same...not even close.
It's very clear that Apple needed an edge to quash Amazon's business model.
But unlike the iTunes model, Apple & the Publishers win at the expense of the customer...and Amazon. And that's really what this all about: beat Amazon at the expense of the customer.

Very simple.
losing money = bad business model

It doesn't matter who or where the loss is the above equation is true.
A service or product cannot continue longer term at a loss.

So in reality they need to stretch the suit out two more years until reasonable people are in power in Washington. Really I see this as nothing more than the policies of irrational liberalism at work. What the suit basically is saying is that a company has no right to set the price of a product, which is assinine. You have to wonder if these government lawyers really expect the publishers to go under due to Amazon selling at a loss.

I know this goes against the common liberal belief but companies must make money to stay in business. You can't do that if one of you business partners has the power to sell your product at a complete loss siphoning sales from all profitable channels.

Credit is the resource, and debt is evidence of its use. To use your oil example, credit:oil as debt:CO2

If debt was the resource, then we could become richer at no cost by just printing more money/debt. Doesn't work.

This is definitely not true.

A retailer cannot continue long term at a loss on the macroscopic level. Any particular product or service can continue to be sold at a loss indefinitely. For instance a gas station that has a large number of customers buying stuff like candy inside the store can sell gas at a loss forever, as long as that internal foot traffic continues. Or an insurance company can sell homeowners insurance at a loss in order to get people in the door to talk to them about larger financial planning services where they make the large profits.

This happens all the time, everywhere.

Amazon e-books were profitable for the publishers---Amazon's loss was not effecting their wholesale costs. They are more worried about protecting their legacy, hardcopy market, where they have lots of control through limited supply.

This is the point most people do not realize what Amazon did to Boarders and now putting the squeeze on Barns and Noble, plus all the mom and pop book stores. So it okay for one company to to us VC money to give away product and almost wipe out ever competitor but god forbid a company comes along and changes the model so everyone can make money.

There has to more to this, since the government can not be saying it is illegal for a seller of a product to set the selling price they want. If it too high people will stop buying that is how the systems works.

I personally think the government does not like when one company has too much power, and trust me the government will win some how even if their originally reason is not valid they will do things to apple to force them to change. They did it Microsoft that is why M$ is a mess today, the government tied their hands.

You are wrong. Many people here are not "only" Apple fans, they are Apple shareholders and the only thing that matters to them is that Apple stock goes higher and higher! They are not drive by objectivity but by pure GREED! It's just disgusting! Sometimes this site makes me NOT want to buy Apple products anymore.

And by the way, I will NEVER buy an ebook from Apple!

In fact it isn't even a strong player. In any event the advantage here isn't to Apple but rather the publishers. It really is sink or swim time for the publishers and the reality is they won't survive if they have to sell wholesale to a retailer like Amazon that then sells books for a loss.

The problem is Amazons success here really pulled a lot of profit out of selling books. If anybody was using monopoly power here it was Amazon as they made it impossible for anybody else to successfully enter the business. If you don't think this is the case look at the number of book sellers that have gone under in the last few years, especially local sellers.

Apple snubs its nose at the DOJ just like Capone snubbed his nose at the IRS. Interesting to see where this goes. Once the government starts going down the rabbit hole, no one knows how deep it may go.

Funny thing is this has nothing to do with Amazon right now, why bring it up? It may in the future, but this is about Apple and Apple's collusion with publishers.

Actually it was more to than that, Amazon disrupted the market, yeah the price the publishers sold to Amazon and probably other book sellers was the same. However when Amazon started giving it away the other books seller could not compete, and they all probably assume Amazon was getting better deals. They probably were in some cases since we know the publishing industry has a bad habit of over producing books since it cheaper to run larger production runs than smaller so when a publisher is sitting on books Amazon probably agree to take them all off their hands.

So if Amazon is giving books away and people stop going to the book store down the street, in turn they stop ordering books from the publisher since they're piss at the publisher for giving Amazon better deals which in turn make the publisher sit on even more books to sell them at even better pricing to Amazon.

Our government is probably pissed that Amazon will no long be able to sell books as lost leaders Which is also against trade laws, it is illegal to sell product below it cost to gain market share as well as it illegal to sell product to the government below costs, so why doesn't our government go after Amazon for this practice.

The part that doesn't add up here is that the books are already being sold to Amazon at wholesale prices. I'm sure they give Amazon a better deal than a distributor who doesn't sell as many copies, but they are still selling the books to Amazon at a reasonable price for themselves. If their deal w/Amazon had them selling the books for less than they could afford, they did a bad job at the bargaining table. Once Amazon has the books, the publishers already have their money, so Amazon selling them cheaper changes nothing. They already got paid for those books.

I agree. Let's have some objectivity. Please tell us what law you think Apple has broken. Furthermore, you keep claiming that Apple is price fixing. Explain how "sell it for any price you wish, just give us 30%" is price fixing. I'd also like to see your evidence of collusion.


As you've been told before, the courts have consistently upheld 'most favored nation' clauses in contracts. There's nothing illegal about it.

So, once again, please point out exactly which part of which law Apple has violated.

Awwwwww... Apple will miss you.

Please read the quote I was replying to.

You missed the part where he doesn't understand how the Agency Model works.

He/she actually believes that other retailers can't sell their stock for less than Apple.

[on edit: my mistake, the wholesaler actually does set the retail price]

The guy can't parse. Period.

Then let it be a lesson to you.

Seemingly, there is no requirement that the offender be "in the position of a monopoly" for DOJ actions to "qualify as antitrust".

Antitrust is a big topic. Here's as good a place to start as any:

http://en.wikipedia.org/wiki/Market_power

I don't think your play on his analogy is equivalent -- try this;

WAR is a resource, because without it, lot's of war profiting companies and industries would go bankrupt.

Without the US continually making newer and more powerful weapons. all the countries we sold to might use them against us.

I might visualize a Hamster wheel for perpetual motion on this theory...

In a way this is exactly the point, Amazon effectively whipped out most of the local and national book retailers. This took out of the equation profit sources for the publishers. I really have a hard time grasping why people don't see Amazon as the problem here. They spent years selling at a loss, to destroy business big and small, if that isn't monopoly power than I don't know what is.

Now granted the whole publishing industry is changing due to electronic media. This is a good thing no doubt, but here is the problem publishers are still a functional part of producing and promoting a book. Sure the industry has to change to reflect the reality of electronics, but there still has to be a resource for writers to work with. Thus there is a need for profits.

In the end the Apple model will be better for authors and readers. My daughter is finishing up her first book. Under a traditional publishing model she might get a 15% royalty for each copy sold. So to make $1.50 per book she would have to sell it for $10. A hardcover would net more bucks if sold for $20 plus but few authors get hardcover deals. Under the old Amazon ebook model going through a traditional publisher, or by herself via ebook or print on demand, she would still have to sell for $10 per book to make her $1.50. Under the Apple model and the system Amazon was forced to go to, to make the same $1.50 per book she could sell an ebook for $2.25. A new author is going to have trouble selling a lot of books, but I would more likely buy a book for $2 or $4 bucks if it had a at least some positive comments/reviews than spend $9.99. So the reader gets to read cheaper and the author get a higher profit for each book sold. Name brand authors going through major publishers are still going to make more money, at least with good contract negotiation, with slightly lower retail pricing. My daughter still has to invest her time in writing, plus pay for editing and cover art, etc. so in the end she may or may not make a profit, but the new pricing model does give her a better chance.

As far as Apple being in violation of some price fixing law or another. Who really knows, those laws are so convoluted and arcane, I could probably be convicted of it for just buying books. I expect the publishers that have already settled figured whatever penalties they owed or business practices they would have to change were less expensive than trying to fight the suit. Apple may also settle as they do not waste money, but on the other hand they do have enough cash for a very expensive defense that many publishers do not have.

You're not quite correct. This assumption is flawed: "All other stores must use the price from the iBookStore and never offer it for less"

There is a very important distinction here. Apple did NOT ask the publishers to set a price for other stores nor did they make a demand that they never sell it for less, the ONLY thing they asked was permission to match any price that undercut the agreed upon agency price. This very clearly puts the responsibility on the publishers as to what terms and conditions they decide to offer other retailers. This is a clearcut case of the publishers being at fault, but Apple negotiating in good faith and within the law.

Not correct as I understand it. Of course Apple had the right to match Amazon's pricing or not before the agency model was put into effect. The change now is that Amazon cannot sell for less that Apple, which is being construed as price-fixing.

According to the DoJ, Apple conspired with the 5 largest publishers to make sure Amazon could not buy books from them unless Amazon agreed that Apple's prices were the minimum acceptable.

That's the issue, not that Apple wanted the right to match Amazon pricing. You have it backwards.