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.
In the short term, yes, consumers would pay more. But in the long term, it would have made Amazon a monopoly and then prices would have steadily climbed anyway. Or, Amazon, being a monopoly would have put pressure on the publishers to lower the wholesale price just as WalMart has forced manufacturers to lower their wholesale prices. Do you know what that led to? Declining quality and the move of manufacturing to China, India, etc.
Low online prices do give us short-term benefits, but in the long term, it also destroys physical retail. Do you really want to walk down Main Street and see nothing but drug stores, dirty delis, liquor stores, check cashing places, fast food restaurants and gas stations? Because that's where the massive move to online purchasing is taking us.
Furthermore, Amazon still has to make a profit. So they lower prices on some items to gain market share, but raise prices on others. WalMart is also a good example of this. They'll sell a DVD player for $25 to get you in the store, but check out lots of other products and they sell at list price. So in the long run, even with Amazon, if you buy a variety of products, you'll pay more.
Apple asked for and got a "most favored nation" clause. All it said was that when the Publisher establishes the price, it can't be one list price in the Apple store and a different list price when they sell to Amazon or any other store. It didn't say that (as far as I know) that Amazon still couldn't sell for a lower price. (If it did, that will definitely be thrown out).
Have you ever done business with a State or the U.S. Government? Guess what they put in almost every contract? A "most favored nation" clause. You can't sell to anyone else for less than you sell to them for the same product/service.
And there's one other issue: when you consistently sell below wholesale price, that can be considered to be "predatory pricing" and it's illegal. And that's what Amazon does in order to gain market share. Apple's not perfect and they probably did do a few things wrong in this case, but the Government went after the wrong party, as far as I'm concerned.