Apple denies DoJ allegations of collusion, says it broke up Amazon monopoly - Page 2

Originally Posted by MGLeet

Okay, colluding may be illegal. Until the DoJ can prove colluding happened and win, I'm not so sure we can say without a doubt that there was colluding. And even if there wasI'm not saying there wasI don't think what the publishers did should be illegal. I mean, look, they were pissed off at Amazon. If they did get together in an underground lair and agreed on a model that made them happy, and Amazon signed their contracts agreeing to the terms, I personally don't see a whole lot of wrongdoing.

And what does the DoJ want to get out of this? If they win they can certainly fine the publishers, but can they actually negotiate the terms for the publishers' content? It's a genuine question actually, I don't know.

Originally Posted by crossuab

For years Apple used their large market market share in digital music to keep the price point at $0.99 per track. Record companies hated that. It's the same thing Amazon was trying to do by using their leverage to keep ebooks at $9.99. It's pot meet kettle. Apple eventually caved to $1.29 but that took years.

Originally Posted by crossuab

For years Apple used their large market market share in digital music to keep the price point at $0.99 per track. Record companies hated that. It's the same thing Amazon was trying to do by using their leverage to keep ebooks at $9.99. It's pot meet kettle. Apple eventually caved to $1.29 but that took years.

Originally Posted by realwarder

I think you'll find there's basis for the 16 states making these claims and causing the government to investigate this. If there were no facts or evidence, do you think that some of the companies involved would have now already paid fines to settle this... http://www.theregister.co.uk/2012/04...suit_for_cash/

Originally Posted by anonymouse

It's not about, "they were doing something bad too."

It's about making a choice: Allow Amazon to kill off all competition in bookselling, which effectively gives them control of the publishers, and who and what gets published and who publishes it, if they are the only place you can sell books. Or, allow a healthy, vibrant publishing and bookselling industry to flourish, so that consumer can choose where to buy books and what they want to read.

The Amazon scenario that the DoJ is myopically supporting, will result in a future with fewer books, fewer voices, fewer viepoints available at higher cost. The agency model leads to a future were the publishing industry thrives and grows and varied and independent voices are heard, and, in the end, lower prices for consumers than you'll get when Amazon controls everything. We've been headed down the Amazon path for a number of years now and the results so far are pretty bleak. How many publishers have to go out of business, merge, or be acquired, before we wake up and see how Amazon is destroying the publishing industry?

So, choose. Choose free speech or choose Amazon controlled speech. But, if we make the wrong choice now, we'll pay for it for a very long time.

Originally Posted by SolipsismX

So where was the DoJ suit claiming that the music labels and Amazon colluded in bringing DRM-free music at a higher bit rate to a different store to shut Apple out?

Originally Posted by crossuab

But Amazon had 90% of market before and ebooks were cheaper. The Apple deal with publishers caused the prices to rise. I'm still unsure of how that was good for customers. Apple broke up the monopoly but it only benefited Apple and publishers like HarperCollins

Originally Posted by AdonisSMU

Im not convinced the government has a case against Apple here. Apple has agency pricing for their apps on their app store and has for some time now.

Originally Posted by cycomiko

The model has nothing to do with the issue. Agency model is perfectly legal.

Its how the publishers via innocent Apple colluded to force amazon into this model that is the issue.

Legal experts have said the Justice Department is unlikely to win against Apple, noting that it has a better case against the publishers. According to one antitrust professor, the government will need to show Apple "had some kind of involvement in the original arrangement" to win against Apple.

Originally Posted by iSheldon

there I falsified it for you.

Originally Posted by realwarder

Amazon and Apple have both interestingly taken a similar path recently, which the publishers must be somewhat concerned about. That is that both now enable the writers themselves to self-publish through iBooks or the Amazon book store. This should give us more choice as it is easier for a writer to publish.

This has pros and cons to writers and consumers, but a clear looser is the publisher. Perhaps both companies thanks for events that have annoyed or tarnished them.

Originally Posted by realwarder

Apple worked with publishers to make book pricing more expensive.

Originally Posted by boredumb

I think of myself as a consumer, not an Apple apologist, and, frankly, I pay more for ebooks since Apple magnanimously "broke up" that mean old Amazon "monopoly".

Originally Posted by cycomiko

its nothing to do with making a choice.

Its about legally penalizing those who break the law. If amazon breaks the law, then they will also be penalized.

Hypothetical situations about what might happen are irrelevant.

Hypothesized reasoning for downsizing, merging and closing down within the publishing industry are also irrelevant.

Its about enforcing the law within the case at hand.

Originally Posted by anonymouse

This kind of short-term thinking represents everything that's wrong with this country. Readers might be paying a few dollars more for books, but Amazon's monopoly position in the publishing industry was untenable. Allowing it to continue, which is what the DoJ action seeks to do, will eliminate competition in book retailing, and, as a result, will eventually result in Amazon controlling not only how much we pay for all books, traditional and e-books, but even what gets published.

And $9.99 isn't going to last. Remember how overpriced Kindles were when there was no competition in the e-reader market. That's where e-book prices will eventually go if the DoJ succeeds in their effort to install Amazon as a government sanctioned monopoly of the publishing industry, end-to-end.

Originally Posted by realwarder

I think you'll find there's basis for the 16 states making these claims and causing the government to investigate this. If there were no facts or evidence, do you think that some of the companies involved would have now already paid fines to settle this... http://www.theregister.co.uk/2012/04...suit_for_cash/

Originally Posted by caliminius

Fallacy #1: Amazon hasn't show much tendency to really care what books it was selling. You might recall the controversy involving them allowing that independently published eBook about pedophilia. Contrast that with say Apple's refusal to sell an app featuring the works of a Pulitzer Prize winning cartoonist (which they later reversed after it got widespread media coverage). I bought "The Yoni" from Amazon (print version), which is about the historical use of female genitalia as a sacred symbol. It contains numerous photographs of symbolic representations and outright images of female anatomy. Do you think Apple would allow that book in iTunes?

And regardless, how does that differ from the system we have today? You don't think the publishers are selective in the titles they are willing to publish?



Fallacy #2: Raising prices isn't Amazon's modus operandi. It never has been. Amazon works on a high volume, low profit system versus Apple's low volume, high profit model.

The Kindle wasn't expensive initially because it had a monopoly on the e-reader market. It was expensive because it was new, the components were expensive, and the fact that Amazon had no way to know whether it would succeed. (Weird, kind of sounds like the initial launch of the iPhone, another product that was "overpriced" originally.)

The people attacking Amazon seem to be stuck on the idea that Amazon wants to kill off all competition. Maybe, but don't other businesses want the same? Would there be many sad faces at Apple if Google announced it was killing Android?

There are other reasons to sell some items below cost. A big one is that it builds good will with customers. If they can get a good price on something, they're more likely to come back and buy from you again. They'll even pay a little extra on some things just knowing how much of a good deal they got on the last item.

When it comes to eBooks, Amazon also had another good reason: building a market. There really wasn't much of a market for eBooks before Amazon created one. (Kind of like the iTunes Store and downloaded music.)

And let's face it, $9.99 was one of those sweet spot prices. It's basically $10, but it lacks that extra decimal so it psychologically feels a lot cheaper. Kind of like $0.99 was a sweet spot for digital tracks.

Originally Posted by caliminius

Fallacy #2: Raising prices isn't Amazon's modus operandi. It never has been. Amazon works on a high volume, low profit system versus Apple's low volume, high profit model.

Originally Posted by realwarder

It's always sad when people have to resort to personal attacks rather than actually commenting on the substance at hand.

My original post also used 'see' instead of 'sell', just to add to my list of typos. I've been waiting for that to be pointed out too.

Originally Posted by macarena

Whether wholesale or agency, it is not the model that is at fault.

Whether Apple or Amazon, they are just doing what is comfortable and better for them long term. Ultimately, Amazon benefits if they can get Wholesale pricing and volumes. What does wholesale pricing mean? Imagine a scenario where Amazon gets a book for $20 if they buy 100 books, $10 if they buy 1000 books and $7 if they sell a 100,000 books. Amazon shoots for selling 100,000 and prices books at $9.99 - but other stores, especially physical stores just cannot compete at that scale. So they have to price books higher.

Amazon has always played volume game, and they use volume for leverage. Apple on the other hand never plays a risky game. They always sell at a profit - but might not make much profits overall because of their operating costs.

It is just 2 different ways of selling. Nothing wrong with either.

The problem here is with publishers. They are trying to keep ebook prices high, so that they can still sell their hardbacks at high prices. If hypothetically, a brand new set of publishers emerged - with no earnings to protect, they could easily price ebooks at $4.99 and still be profitable.

When people make arguments that authors deserve to be compensated, they are missing the big point. Even at $19.99 retail of a hardback, authors don't make much more than $1-2. This is easily possible with eBooks because lot of the costs are zero or low!

DoJ is barking up the wrong tree. They should let the market sort itself out and this will likely happen even before this suit is resolved! And DoJ runs risk that a resolution against Apple and favoring Amazon could actually create a monopoly!

Originally Posted by cycomiko

The model has nothing to do with the issue. Agency model is perfectly legal.

Its how the publishers colluded to force amazon into this model that is the issue.

Originally Posted by realwarder

I think you'll find there's basis for the 16 states making these claims and causing the government to investigate this. If there were no facts or evidence, do you think that some of the companies involved would have now already paid fines to settle this... http://www.theregister.co.uk/2012/04...suit_for_cash/

Originally Posted by realwarder

Rather than letting the market sort itself out, Apple worked with publishers to make book pricing more expensive by denying Amazon the ability to sell books at the prices it wanted to.

Sounds antitrust practice to me. Anyone was free to see books cheaper than Amazon and gain market share. It's not like the publishers were loosing money! They got their price whatever Amazon sold a book for.

Personally I dislike spin.

The people who lost out from this whole shenanigans was us, the consumer. That is why this is being investigated.

Originally Posted by realwarder

I think you'll find there's basis for the 16 states making these claims and causing the government to investigate this. If there were no facts or evidence, do you think that some of the companies involved would have now already paid fines to settle this... http://www.theregister.co.uk/2012/04...suit_for_cash/

Originally Posted by realwarder

That was the problem though. By the publishers changing the model to 'set prices for other outlets' (i.e. define the actual selling price), that prevented Amazon from selling below the publishers price. So prices went up.

Originally Posted by nicolbolas

look at book prices--Amazon charged around $10 per book, if you look at any site that isn't biased towards Apple you realize that.... Apple charged more.

read the first paragraph of the first section of this

=.=...

I wish i had good things to say about Apple/apple fanboys recently, but i really don't.

Also, did Apple take apps and raise their prices with app makers support so that other app sellers couldn't sell for less? the answer is no.

Originally Posted by SolipsismX

So where was the DoJ suit claiming that the music labels and Amazon colluded in bringing DRM-free music at a higher bit rate to a different store to shut Apple out?

Originally Posted by jragosta

I think you know the answer. Apple doesn't run to the DOJ every time someone does something like that - they just respond with better products and services. Amazon, OTOH, apparently isn't capable of doing that so they filed a complaint with the DOJ instead.

Originally Posted by cycomiko

Evidence of collusion?

Originally Posted by Gatorguy

I missed the news that the whole case is due to Amazon's complaints. Perhaps it was officially stated somewhere and it just wasn't noticed?

Originally Posted by Dickprinter

I'm not attacking you personally ...

and.......speak intelligently.

Originally Posted by caliminius

Fallacy #2: Raising prices isn't Amazon's modus operandi. It never has been. Amazon works on a high volume, low profit system versus Apple's low volume, high profit model.

The Kindle wasn't expensive initially because it had a monopoly on the e-reader market. It was expensive because it was new, the components were expensive, and the fact that Amazon had no way to know whether it would succeed. (Weird, kind of sounds like the initial launch of the iPhone, another product that was "overpriced" originally.)

Originally Posted by caliminius

The people attacking Amazon seem to be stuck on the idea that Amazon wants to kill off all competition. Maybe, but don't other businesses want the same? Would there be many sad faces at Apple if Google announced it was killing Android?

There are other reasons to sell some items below cost. A big one is that it builds good will with customers. If they can get a good price on something, they're more likely to come back and buy from you again. They'll even pay a little extra on some things just knowing how much of a good deal they got on the last item.

When it comes to eBooks, Amazon also had another good reason: building a market. There really wasn't much of a market for eBooks before Amazon created one. (Kind of like the iTunes Store and downloaded music.)

And let's face it, $9.99 was one of those sweet spot prices. It's basically $10, but it lacks that extra decimal so it psychologically feels a lot cheaper. Kind of like $0.99 was a sweet spot for digital tracks.

Originally Posted by TBell

Let us say you were charged with a serious crime that you didn't do.

The prosecutor says you have two choices. The first is to plead guilty to a lessor charge whereby you will see no jail time and maybe pay a small penalty. The second is to fight the matter in court in front of a jury of your peers.

If you are truly innocent you are going to be tempted to go for option two. Than, however, you will consider that if you lose you will face a couple of years in jail;

Originally Posted by jragosta

Raising prices isn't illegal.
Agency model isn't illegal.
Amazon's predatory pricing is.

Originally Posted by NeoTheta


Many readers confuse Apple's most favored nation clause to conclude that it means that other retailers cannot sell books for less. This is wrong. It means that the vendor (in this case the publishers) agree not to sell to other retailers for less. Other Retailers are free to retail books at whatever price they want -- and Amazon may continue to sell them below cost.

Originally Posted by NeoTheta

Many readers confuse Apple's most favored nation clause to conclude that it means that other retailers cannot sell books for less. This is wrong. It means that the vendor (in this case the publishers) agree not to sell to other retailers for less. Other Retailers are free to retail books at whatever price they want -- and Amazon may continue to sell them below cost.

This is actually quite common in purchasing contracts. Indeed the US Government frequently includes it in its purchasing contracts.

Originally Posted by gradam01

Amazon selling below cost is not illegal. It's call a loss leader. If loss leaders were illegal every retail and grocery store in the country would be shut down.

Originally Posted by realwarder

Antitrust is about fines. Jail is so very rare, that is not part of a companies concern.

It's about money. Is it cheaper for a company to fight it and potentially tarnish their reputation along the way, or pay up a fine now that will be much cheaper than one a jury would give (but a cost much higher than your lawyer fees in defending you.)