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Australian government may also sue Apple over e-book pricing

post #1 of 65
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The Australian government has begun urging retailers with concerns about e-book price fixing to file formal complaints, as it considers its own lawsuit against Apple and book publishers.

The Australian Competition and Consumer Commission has advised retailers to raise any concerns related to the local market, according to the Financial Review. The commission declined to say whether there is an ongoing investigation against Apple or the five book publishers targeted this week in a suit by the U.S. Department of Justice.

"The ACCC has previously stated that impediments to emerging competition involving online traders is an area of priority," a spokesperson said. "Competition concerns may arise where traders seek to restrict the discounting of products by way of respective arrangements with suppliers. Retailers with concerns should raise them with the ACCC."

The U.S. DOJ filed suit against Apple on Wednesday, officially charging it and five book publishers of price fixing and collusion. Three of the book publishers — Simon & Schuster, Hachette and HarperCollins — settled their cases, while Apple and two publishers — Penguin and Macmillan — have fought the DOJ's claims.

The justice department first warned Apple and publishers in March that it had taken issue with Apple's alleged role in convincing publishers to switch to an "agency model" for sales, rather than the "wholesale model" Amazon had used on its own Kindle store. Previously, publishers would sell their books at wholesale and Amazon repeatedly upset publishers by selling titles at a loss.




If the ACCC does pursue action against Apple, it would be the second time this year that the commission has set the iPad maker in its sights. In March, the government watchdog group accused Apple of "misleading" customers into thinking its newest iPad runs at fast 4G LTE speeds in Australia, while LTE connectivity for the device is actually restricted to North America.

Apple responded by updating its online store in Australia with more prominent text informing consumers that the 4G version of the new iPad does not work with LTE networks in Australia. The company also sent out an e-mail to Australian customers offering them a full refund if they are unhappy with their new iPad.

[ View article on AppleInsider ]
post #2 of 65
Everyone wants a bite of Apple now. The vultures are attacking.
post #3 of 65
Wow aussie government really seems to hate apple lol.
post #4 of 65
Expect this to be adopted around the world. Government finances are in a shit state so they will happily sue the likes of Apple for all they can get. Ultimately the consumer will pay the cost through higher product prices over time.
post #5 of 65
Apple has more money than any of these governments, so now they want a piece of the pie.

It's the same as when Apple was small enough to concern itself with other companies. But they're over that.
post #6 of 65
The walled garden can be a double edged sword. Apple was never going to get away with that pricing model. You win some you lose some, but they should have seen this coming.

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post #7 of 65
retail price maintenance has been illegal in Australia for many years...however, it is always curious how pricing becomes amazingly similar.

banks, petrol, print books...consider school textbooks..all pricing is within a few dollars of each other!
and the online versions are about $17 per year..same as US calculation $15USD...

but print texts are mostly $65AUD or $75AUD with discounts of up to 30% from bookselelrs..there is the price manipulation!

ACC get stuck into that...and petrol pricing..and LPG..and bread..and milk..
(jumped 18 cents in one weekend for all suppliers!? How so?)

cartels and monopolies are over..
apple has a monopoly situation with iTunes and ePubs
the set nature of the 30% and the idea of APPs being in a market suggest it is no different to paperbacks where every publisher has 412.99 $15.99 or $21.99 as their price point..no-one has ever attempted to explain that apart from removing price as a factor in purchasing..
no different in the iTS..may not like it

ISP pricing is also amazingly similar!..apart from Telstra which takes advantage of their extra coverage and charges a premium
try buying an apple notebook..the landed cost is quite different to the retail price
and smart phone handsets..etc..

unless ACC is intending to limit the retail margin( maybe an enforceable idea) it is in the same realm as mining
charge what the market will bear..if the consumers don't like it they will not buy
no signs of that happening!
post #8 of 65
Quote:
Originally Posted by enjourni View Post

Wow aussie government really seems to hate apple lol.

Apple should show them it means business and pull out of Australia completely. Apple wouldn't hardly feel any pain, but the Aussies would learn a hard lesson: Don't fuck with Apple!
post #9 of 65
Quote:
Originally Posted by iSheldon View Post

Everyone wants a bite of Apple now. The vultures are attacking.

Take off your Apple fanboi hat for a second and look at this objectively.

The evidence that the Justice department has gathered is pretty serious and damning against Apple.

They conspired with all the major Publishers to fix prices of new ebooks at 12.99 to 14.99. Apple has smart lawyers. They know this is illegal under anti-trust regulations in the US ( and in most other Western countries).

Apple should get sued by every country in which consumers were affected. If Apple is found guilt by the courts, then they should pay a fine that is equal to their gain from their illegal actions plus punitive damages.

Price fixing is anti competitive, anti consumer, and anti capitalistic.
post #10 of 65
Quote:
Originally Posted by bongo View Post

Take off your Apple fanboi hat for a second and look at this objectively.

The evidence that the Justice department has gathered is pretty serious and damning against Apple.

They conspired with all the major Publishers to fix prices of new ebooks at 12.99 to 14.99. Apple has smart lawyers. They know this is illegal under anti-trust regulations in the US ( and in most other Western countries).

Apple should get sued by every country in which consumers were affected. If Apple is found guilt by the courts, then they should pay a fine that is equal to their gain from their illegal actions plus punitive damages.

Price fixing is anti competitive, anti consumer, and anti capitalistic.


http://www.amazon.com/Fifty-Shades-D...4236583&sr=1-2

http://itunes.apple.com/us/book/fift...09841099?mt=11
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post #11 of 65
Quote:
Originally Posted by irnchriz View Post

Expect this to be adopted around the world. Government finances are in a shit state so they will happily sue the likes of Apple for all they can get. Ultimately the consumer will pay the cost through higher product prices over time.

Australia is doing rather well, you see we sell rocks to China, they make stuff and sell it to you.
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post #12 of 65
Your links don't necessarily disprove his point (which I don't necessarily agree with but for other reasons). The prices may not be 12.99-14.99 (they may be if he is not in the US of course) but that doesn't prove or disprove any sort of allegations of price fixings.

Of course there is a reason we don't judge cases purely on what one side says. Any case looks damning if you go solely based on what the government says.
post #13 of 65
Quote:
Originally Posted by mstone View Post

The walled garden can be a double edged sword. Apple was never going to get away with that pricing model. You win some you lose some, but they should have seen this coming.

Apple was never going to get away with a perfectly legal agency model?

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post #14 of 65

In another thread much earlier today I pointed out to you that particular book was self-published and not from one of the 5 publishers accused of price-fixing. 50 Shades can be sold for whatever the retailer wishes. Of course that doesn't mean you can't continue making believe it's proof that the price-fixing never occurred. Wouldn't it more honest of you to find one from one of the accused publisher's if you think you have proof that no prices have been fixed?
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post #15 of 65
Quote:
Originally Posted by SolipsismX View Post

Apple was never going to get away with a perfectly legal agency model?

This! ++
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post #16 of 65
Quote:
Originally Posted by irnchriz View Post

Expect this to be adopted around the world. Government finances are in a shit state so they will happily sue the likes of Apple for all they can get. Ultimately the consumer will pay the cost through higher product prices over time.

Maybe. On the other hand, the price of my Kindle e-books have risen by 30-50% since Apple entered the market, so it seems more plausible that this will reduce product prices over time.
post #17 of 65
Quote:
Originally Posted by SolipsismX View Post

Apple was never going to get away with a perfectly legal agency model?

An agency model allows the publisher, not the retailer, to set prices. This is legal, however the stipulation that no one can sell it for less on another online store is where it gets sticky. In my opinion they should have left that part out. On the app store that aspect is built in because App Store apps only work on iOS and can only be sold on the Apple App Store.

If they had just left it alone and let the market find the right price on it's own, everything would have worked out fine. If the iOS versions of the book were not selling as well as they wanted then the publishers would lower the price. Apple would always get 30% and everyone is happy. If Amazon wants to sell below cost then they are the ones that would be in the DOJ's crosshairs.

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post #18 of 65
Quote:
Originally Posted by SolipsismX View Post

Apple was never going to get away with a perfectly legal agency model?

If Apple used the whole sale model and sold ebooks at price lower that Amazon then they will say Apple is trying to crush the competition.

And you know.. it was OK for Amazon to threaten book publishers and use their market position in the books business to gain control in ebook business.
post #19 of 65
Quote:
Originally Posted by mstone View Post

An agency model allows the publisher, not the retailer, to set prices. This is legal, however the stipulation that no one can sell it for less on another online store is where it gets sticky. In my opinion they should have left that part out. On the app store that aspect is built in because App Store apps only work on iOS and can only be sold on the Apple App Store.

If they had just left it alone and let the market find the right price on it's own, everything would have worked out fine. If the iOS versions of the book were not selling as well as they wanted then the publishers would lower the price. Apple would always get 30% and everyone is happy. If Amazon wants to sell below cost then they are the ones that would be in the DOJ's crosshairs.

At least in the US, the contract is perfectly legal.

The issue here is that Apple is alleged to have conspired with the 5 major publishers to raise the prices of e-books across the board. The contract is the (legal) mechanism by which this was implemented. From the DoJ complaint, and the fact that three of them have already agreed to a settlement, there seems little doubt that the publishers colluded during negotiations.

It's less clear that Apple "colluded" in the same way, we'll find out with the outcome of the current DoJ complaint.
post #20 of 65
Quote:
Originally Posted by SolipsismX View Post

Apple was never going to get away with a perfectly legal agency model?

Colluding with providers of goods by price fixing is legal now? Say wha?

Quote:
and Apple, which was about to introduce its iPad to the market, insisted on the most favored nation clause. That clause came under scrutiny by the Justice Department.

http://mediadecoder.blogs.nytimes.co...-book-pricing/
post #21 of 65
Quote:
Originally Posted by mstone View Post

An agency model allows the publisher, not the retailer, to set prices. This is legal, however the stipulation that no one can sell it for less on another online store is where it gets sticky. In my opinion they should have left that part out. On the app store that aspect is built in because App Store apps only work on iOS and can only be sold on the Apple App Store.

This is not true. In the lawsuit itself the DoJ said Apple condition was that APPLE have the right to LOWER the price to match anyone else and still take their 30% cut.
post #22 of 65
Quote:
Originally Posted by NasserAE View Post

And you know.. it was OK for Amazon to threaten book publishers and use their market position in the books business to gain control in ebook business.

Right- just like Steve Jobs and Apple treatened the music industry with $0.99 songs in order to sell more iPods while insisting it was doing so only to "save" the music industry from pirates.
Amazon just copied Apple when selling Kindles- same thing.
post #23 of 65
Quote:
Originally Posted by NasserAE View Post

This is not true. In the lawsuit itself the DoJ said Apple condition was that APPLE have the right to LOWER the price to match anyone else and still take their 30% cut.

Apple doesn't control the price. Apple's contract says that the publisher must set the iTunes store price of their products at or below the lowest advertised price in any retail channel, including the wholesale channel. This protects Apple's reputation, since the public doesn't understand the basic fact that the iTunes isn't the "Apple" price.
post #24 of 65
Quote:
Originally Posted by NasserAE View Post

If Apple used the whole sale model and sold ebooks at price lower that Amazon then they will say Apple is trying to crush the competition.

And you know.. it was OK for Amazon to threaten book publishers and use their market position in the books business to gain control in ebook business.

There is no evidence that Amazon violated any anti trust regulations. Having a powerful market position in and of itself is not illegal. If Amazon "gained" control of the ebook business as you stipulate, then Apple/Itunes would not have been able to enter it and become successful.
post #25 of 65
Quote:
Originally Posted by iSheldon View Post

Colluding with providers of goods by price fixing is legal now? Say wha?



http://mediadecoder.blogs.nytimes.co...-book-pricing/

If you stay around long enough you'll realize you need to be aware of how Solip words his replies. He's technically correct that an agency model is not in and of itself illegal...

but the way this one was put together might be.
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post #26 of 65
Quote:
Originally Posted by jukes View Post

the fact that three of them have already agreed to a settlement, there seems little doubt that the publishers colluded during negotiations.

It's less clear that Apple "colluded" in the same way, we'll find out with the outcome of the current DoJ complaint.

That's exactly my take away.
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post #27 of 65
Quote:
Originally Posted by NasserAE View Post

This is not true. In the lawsuit itself the DoJ said Apple condition was that APPLE have the right to LOWER the price to match anyone else and still take their 30% cut.


Like I said this is where it gets sticky. Apple lets the publishers set the price EXCEPT if someone else is selling it for less.

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post #28 of 65
Quote:
Originally Posted by jukes View Post

Maybe. On the other hand, the price of my Kindle e-books have risen by 30-50% since Apple entered the market, so it seems more plausible that this will reduce product prices over time.

What makes you so sure that that increase is because of Apple? Maybe Amazon simply got tired of selling things at a loss.

Quote:
Originally Posted by iSheldon View Post

Colluding with providers of goods by price fixing is legal now? Say wha?

http://mediadecoder.blogs.nytimes.co...-book-pricing/

Maybe no one has explained it to you, but there's a principle in the US (and in Australia, too, AFAIK) that says that you're innocent until proven guilty. So far, no one has been found guilty.

Even the allegations are pretty vague. The published statements from Apple said essentially "if you use our model, you can charge more for your books and make more money". That is not the least bit illegal. It's only illegal if it can be proven that Apple colluded on setting prices.
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post #29 of 65
Quote:
Originally Posted by jukes View Post

From the DoJ complaint, and the fact that three of them have already agreed to a settlement, there seems little doubt that the publishers colluded during negotiations.

Not really. Just because you settle with somebody doesn't always mean that you admit any guilt or that any wrongdoing has occurred. There are lots of cases where they settle because the costs of fighting it are too high for them compared to the settlement.

We would need to see the exact settlement terms to know anything.
post #30 of 65
Quote:
Originally Posted by diddy View Post

Not really. Just because you settle with somebody doesn't always mean that you admit any guilt or that any wrongdoing has occurred. There are lots of cases where they settle because the costs of fighting it are too high for them compared to the settlement.

We would need to see the exact settlement terms to know anything.

Absolutely true. But if coughing up ~52 million dollars is the 'easy way out' it says something...
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post #31 of 65
Quote:
Originally Posted by bongo View Post

Take off your Apple fanboi hat for a second and look at this objectively.

The evidence that the Justice department has gathered is pretty serious and damning against Apple.

They conspired with all the major Publishers to fix prices of new ebooks at 12.99 to 14.99. Apple has smart lawyers. They know this is illegal under anti-trust regulations in the US ( and in most other Western countries).

Apple should get sued by every country in which consumers were affected. If Apple is found guilt by the courts, then they should pay a fine that is equal to their gain from their illegal actions plus punitive damages.

Price fixing is anti competitive, anti consumer, and anti capitalistic.

Quote:
Originally Posted by iSheldon View Post

Colluding with providers of goods by price fixing is legal now? Say wha?

Did a company actually do this? Which one? Was it proven in court? Were they convicted?
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post #32 of 65
Quote:
Originally Posted by jragosta View Post

Even the allegations are pretty vague. The published statements from Apple said essentially "if you use our model, you can charge more for your books and make more money". That is not the least bit illegal. It's only illegal if it can be proven that Apple colluded on setting prices.

I agree. It sounds worse for the publishers since there are more than them involved. From the loop:

Quote:
The Department of Justice has a far better case against the publishers than Apple, says Dominick Armentano, professor emeritus of economics at the University of Hartford and author of Antitrust and Monopoly whos now affiliated with the Independent Institute in Oakland, Calif. If the CEOs of the various publishers got together in hotel rooms to discuss prices, they are sunk and might as well settle, he says.

Such meetings by the way (according to the linked article at the Loop) was that Apple was not at said meetings.

Apple really doesn't need to collude with the publishers at all - liability wise it wouldn't be. They just have to say that they want to use the agency model - a model that is in your best interests because of X. That really isn't collusion per se.
post #33 of 65
Quote:
Originally Posted by diddy View Post

Not really. Just because you settle with somebody doesn't always mean that you admit any guilt or that any wrongdoing has occurred. There are lots of cases where they settle because the costs of fighting it are too high for them compared to the settlement.

We would need to see the exact settlement terms to know anything.

Sure, but you didn't read the complaint, did you?
post #34 of 65
Quote:
Originally Posted by jukes View Post

Sure, but you didn't read the complaint, did you?

I wasn't talking about the complaint (which I have read). I was merely pointing out that a settlement with one party doesn't necessarily imply guilt on other parties or guilt on the parties that settled unless the terms of said said settlement involve admission of guilt. The person that will determine guilt is the judge and jury unless settlement terms dictate otherwise.

I don't really care what the complaint says - it's not proof and it has no bearing on guilt until a trial happens or a settlement involving admission of guilt occurs. I render no absolute options on the merits of the case other than what other people may say.
post #35 of 65
Quote:
Originally Posted by iSheldon View Post

Right- just like Steve Jobs and Apple treatened the music industry with $0.99 songs in order to sell more iPods while insisting it was doing so only to "save" the music industry from pirates.
Amazon just copied Apple when selling Kindles- same thing.

Really? where did Apple said they were doing so to save the music industry? You keep making shit up. Back up your statement. Furthermore, there is no book piracy issue. So Amazon was not saving anything. Not same thing.
post #36 of 65
Quote:
Originally Posted by jukes View Post

Apple doesn't control the price. Apple's contract says that the publisher must set the iTunes store price of their products at or below the lowest advertised price in any retail channel, including the wholesale channel. This protects Apple's reputation, since the public doesn't understand the basic fact that the iTunes isn't the "Apple" price.

Go read the complaint and then come back.
post #37 of 65
Quote:
Originally Posted by diddy View Post

I wasn't talking about the complaint (which I have read). I was merely pointing out that a settlement with one party doesn't necessarily imply guilt on other parties or guilt on the parties that settled unless the terms of said said settlement involve admission of guilt. The person that will determine guilt is the judge and jury unless settlement terms dictate otherwise.

The original point I made was that three of the five publishers settled. That, combined with the text of the complaint, which I still doubt that you read completely, leads one to believe that the publishers likely colluded. Hence the original statement I made "little doubt that the publishers colluded."
post #38 of 65
Quote:
Originally Posted by NasserAE View Post

Go read the complaint and then come back.

Did you like the part where, before the MFN clause, Apple wanted to include a requirement that the publishers guarantee to switch all contract to agency instead of wholesale? Or that Apple doesn't want to compete on price which is why this specific "unusual" MFN came from?

Apple doesn't control the price, other than inasmuch as they've contractually fixed the prices that the publishers will use in the absence of lower prices elsewhere.
post #39 of 65
Quote:
Originally Posted by bongo View Post

There is no evidence that Amazon violated any anti trust regulations. Having a powerful market position in and of itself is not illegal. If Amazon "gained" control of the ebook business as you stipulate, then Apple/Itunes would not have been able to enter it and become successful.

In Aug 2010 Amazon said they have 70-80% of the ebook business. If that isn't control then I don't know would.

http://reviews.cnet.com/8301-18438_7-20012381-82.html


If it wasn't for Apple they would still have that much if not more. They got the publishers by you know what until Apple offered the alternative "agency model".
post #40 of 65
Quote:
Originally Posted by NasserAE View Post

Really? where did Apple said they were doing so to save the music industry? You keep making shit up. Back up your statement. Furthermore, there is no book piracy issue. So Amazon was not saving anything. Not same thing.

Dude- quotation marks mean just that- I'm quoting something. It has been said over and over on here that that is what Apple did. I never said Apple said.....
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