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DoJ accuses Apple of prolonging price fixing suit for financial gain

post #1 of 85
Thread Starter 
In a reply memorandum filed on Wednesday, the U.S. Department of Justice said Apple's request to block a summary judgment is driven by the company's unwillingness to compete in the e-book market.

The DoJ document, first reported by paidContent, is in response to an Apple memo filed a little over one week ago which opposed the government's request for a summary judgment regarding a proposed settlement.

In Wednesday's memo, the DoJ rebuked Apple's opposing remarks and once again asked presiding judge Denise Cote to approve the ruling in lieu of a hearing, claiming "in reality, what troubles Apple is that the decree returns pricing discretion not just to Apple, but also to its retail competitors."

From the memo:

In reality, what troubles Apple is that the decree returns pricing discretion not just to Apple, but also to its retail competitors — competitors which Apple fears may choose to exercise that restored authority in order to lower e-book prices. In that event, Apple's e-book customers might find less expensive alternatives. Apple's desire to avoid price competition for as long as possible is the unstated reason why it seeks to undo or forestall the settlements.

In short, Apple's own interests motivate its objections to the proposed decree, interests that are not in any way linked to the public interest inquiry mandated by the Tunney Act.


The governement argues that delaying a final ruling on the matter would "deprive Settling Defendants, the United States, and consumers of the immediate benefits of the settlements for no reason other than to preserve the Apple Agency Agreements." The memo goes on to claim those specific deals with publishing houses "almost literally overnight" caused a substantial increase in e-book pricing.

Apple and its partner defendants have countered such claims, saying the DoJ has no evidence to back their claims besides "secret" sales data not made available to corporations. The Cupertino company went as far as to call the summary judgment request unlawful and fundamentally unfair.



Getting into the details of the most recent memo, the DoJ attempts to table arguments that the e-book trade is unlike any other industry by noting there have been numerous pleas for special treatment under antitrust laws in the past. "Railroads, publishers, lawyers, construction engineers, health care providers, and oil companies are just some of the voices that have raised cries against 'ruinous competition' over the decades," the government writes.

The DoJ also takes the publishers' opposing arguments into consideration. In attempting to dismantle publishing house Penguin's claims, the government presented charts comparing pricing between new release e-books with older titles, noting a significant increase in both. The stats came from content sold through Amazon.

Penguin was one of the first to question the DoJ's market research and requested the accompanying documents be handed over since it seems to be the basis of the government's argument. The DoJ declined, saying "There is simply no basis for Penguin's assertion that the United States must produce internal economic analyses to support its settlement."

Macmillan also asked to see the "secret" research, but more importantly requested the DoJ prove the proposed settlement wouldn't result in an Amazon monopoly. The publisher was unsuccessful in both requests, with the government brushing off the Amazon monopoly argument citing existing competition from "established companies such as B&N, Google, Apple, and Sony."

Judge Cote has not yet ruled on the matter.
post #2 of 85

This is such a bizarre suit. I don't understand the motivation behind the DOJ here. It's completely baffling to me. Before Apple entered the market, Amazon had almost complete monopoly power and had already shown the willingness to abuse that power.

post #3 of 85
Quote:
Originally Posted by sessamoid View Post

This is such a bizarre suit. I don't understand the motivation behind the DOJ here. It's completely baffling to me. Before Apple entered the market, Amazon had almost complete monopoly power and had already shown the willingness to abuse that power.

 

... and then Apple entered the market and prices went UP rather than DOWN. It's really no surprise that the DoJ are investigating. Competition is supposed to lead to lower prices. Any other scenario is highly suspicious. 

post #4 of 85

Prosecutors, cops, and almost any government officials are the most arrogant A holes ever. Any time you want them to show you a regulation or prove what they are claiming about laws or regulations gets them extremely mad. How dare the prosecution not produce their research which is the basis for their claims that Apple is breaking a law! That is insane; and why hasn't the judge just ordered them to disclose their information?

 

I'm not necessarily for Apple in this case but it makes me mad when government is just trying to attack something without fully disclosing its sources or motives.

post #5 of 85
I still dont understand how letting the publishers set there own prices with apple taking a cut could possibly infringe price fixing laws.

Imo price went up because amazon was abusing publishers or selling at lost. Simple.

And apple is stalling because it makes so much money with books... Really? Its not even pocket change of pocket change.
post #6 of 85
Yeah, right. Apple is all about the few millions it can earn by stalling the case - a company with literally more cash than it knows what to do with.

Whoever's in charge of this failed investigation is attempting some serious CYA action....
post #7 of 85
Originally Posted by RichL View Post
Competition is supposed to lead to lower prices. Any other scenario is highly suspicious. 

 

And yet the telecoms' prices have been going UP for a decade, despite having competition, and the DoJ has said boo. Every single time. Huh.

 

Maybe Apple just didn't feel like paying anyone off to enter the market.

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post #8 of 85
Quote:
Originally Posted by herbapou View Post

I still dont understand how letting the publishers set there own prices with apple taking a cut could possibly infringe price fixing laws.
Imo price went up because amazon was abusing publishers or selling at lost. Simple.
And apple is stalling because it makes so much money with books... Really? Its not even pocket change of pocket change.

 

So why were prices substantially lower when Amazon was leading the market, and didn't go up until after Apple joined the game?

 

I can agree that prices were perhaps too low initially, but things have gotten out of hand with eBooks retailing 2 dollars less than hardback copies in many cases. I'm sorry, but that's absolutely ridiculous.

post #9 of 85
Quote:
Originally Posted by herbapou View Post


And apple is stalling because it makes so much money with books... Really? Its not even pocket change of pocket change.

This is the most befuddling of the DOJ's argument. So much so that it's got to be disingenuous.

post #10 of 85
Quote:
Originally Posted by Cash907 View Post

 

So why were prices substantially lower when Amazon was leading the market, and didn't go up until after Apple joined the game?

 

I can agree that prices were perhaps too low initially, but things have gotten out of hand with eBooks retailing 2 dollars less than hardback copies in many cases. I'm sorry, but that's absolutely ridiculous.

Can we stop with the bovine excrement about how e-book pricing should be a fraction of the print edition. It has NOTHING to do with how much it costs to distribute either form. It's about compensating the author for their intellectual work and artistic endeavor. It is the height of stupidity to equate how much the paper and ink costs with the value of the content. It's not about the book or electronic file, its about what's in it.

post #11 of 85
Quote:
Originally Posted by Tallest Skil View Post

And yet the telecoms' prices have been going UP for a decade, despite having competition, and the DoJ has said boo. Every single time. Huh.

Maybe Apple just didn't feel like paying anyone off to enter the market.

Really? I'm paying less now for 2 smartphones than I used to pay for 2 feature phones, plus there are plenty of options of getting unlimited everything for $50 or less.
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post #12 of 85
Quote:
Originally Posted by RichL View Post

 

... and then Apple entered the market and prices went UP rather than DOWN. It's really no surprise that the DoJ are investigating. Competition is supposed to lead to lower prices. Any other scenario is highly suspicious. 

 

Except when there's predatory pricing, which is selling at a loss to gain market share.    And that's exactly what Amazon does - they sell at a loss to gain market share and push the competitors out.  And then down the road, they will increase prices.

 

The other problem with the DOJ suit is that a few  years back, the Supreme Court ruled that manufacturers could enforce minimum selling prices, not just minimum advertised prices.    Maybe that ruling only applied to hard goods manufacturers like electronics and camera makers, but I don't see how it wouldn't also apply to publishers.    I sincerely disagreed with that ruling, because permitting manufacturers to set minimum selling prices sounds an awful lot like price fixing to me.    But in some respects, it's a moot point, because the manufacturers (including Apple) have also raised wholesale prices to be so close to selling price, that it's almost impossible to discount even if the manufacturers didn't dictate selling prices.  However, if the Supreme Court ruled that manufacturers could fix min selling prices, then what's the point of the DOJ suit?

 

And I think that's what will eventually happen in the book industry:   publishers will simply raise the wholesale price of ebooks, even though this wouldn't necessarily force Amazon to raise prices because they seem willing to lose money for long lengths of time.    

 

The DOJ is looking at this too narrowly.  They have to look at the impact on the entire industry.     Otherwise, they could kill off the industry.   Look at the recording industry - it's now less than half the size that it was in 1999 and that doesn't even include inflation.   

post #13 of 85
Quote:
Originally Posted by RichL View Post

... and then Apple entered the market and prices went UP rather than DOWN. It's really no surprise that the DoJ are investigating. Competition is supposed to lead to lower prices. Any other scenario is highly suspicious. 

Quote:
Originally Posted by Cash907 View Post

So why were prices substantially lower when Amazon was leading the market, and didn't go up until after Apple joined the game?

I'd like to see either of you support that contention.

The DOJ's own documents showed that prices went down after Apple entered the market.

Furthermore, there's absolutely no guarantee that competition will bring down prices in the short run. Amazon was selling below cost in order to gain monopoly control of a new market. It's not surprising that they were keeping prices artificially low. Once they had sufficient control of the market, they would have had free rein to raise prices or control content or anything else they wanted.

It's a red herring argument, anyway. The DOJ's job is not to bring prices down. Their job is to encourage competition - and then the market will take care of prices. Apple created competition in this market, Amazon was well on its way to a controlling monopoly. The DOJ's position is 100% wrong. It appears that Amazon got to someone important with a sob story and that person jumped without checking the facts.

As for the content of this story, it's one of the stupidest things I've seen the DOJ say - and that's saying quite a bit. Apple doesn't think there's any merit to the suit and allowing the court to enforce an injunction before Apple gets a chance to prove its case obviously hurts Apple and Apple has every right to fight it. What does the DOJ think Apple is going to do - just roll over and let the government take away all their rights?
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post #14 of 85
Quote:
Originally Posted by RichL View Post

 

... and then Apple entered the market and prices went UP rather than DOWN. It's really no surprise that the DoJ are investigating. Competition is supposed to lead to lower prices. Any other scenario is highly suspicious. 


Prices went up on some ebooks. the DOJ doesn't note that Amazon has exclusive rights to some ebooks in the NYT top seller list and can charge anything they want. Amazon is selling ebooks at a loss so that weeds out other competitors because they actually want to make money on these items. How is that fair? Amazon had a near monopoly and there were barely any competition. Now with a level playing field, there is plenty of competition.

post #15 of 85
Quote:
Originally Posted by RichL View Post

... and then Apple entered the market and prices went UP rather than DOWN. It's really no surprise that the DoJ are investigating. Competition is supposed to lead to lower prices. Any other scenario is highly suspicious. 

I guess you haven't seen the prices for Cloud Computing. Nobody is competing with Amazon, only matching Amazon's prices.
post #16 of 85

In the mean time Samsung feels their partnership with Amazon and its financial investment in the DOJ has paid off.

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post #17 of 85
Quote:
Originally Posted by herbapou View Post

I still dont understand how letting the publishers set there own prices with apple taking a cut could possibly infringe price fixing laws.
Imo price went up because amazon was abusing publishers or selling at lost. Simple.
And apple is stalling because it makes so much money with books... Really? Its not even pocket change of pocket change.

You're correct the eBooks were being sold at a loss by Amazon, but people don't really care about that fact. They got used to buying bestsellers for $9.99 and when that got taken away screamed bloody murder and I'd say it was a few with some political clout. Although I believe Apple did nothing wrong I don't believe the publishers are innocent.
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post #18 of 85

DoJ's memorandum is tantamount to "opposition is proof of guilt". No judge should countenance such self-serving drivel.
 

post #19 of 85

I'm sure Amazon having a near monopoly on on-line hard cover book sales would not allow them in any way to manipulate the nascent e-book market. <sarcasm>  Wasn't there already evidence that Amazon pressured publishers to allow them to sell e-books below cost?    If they didn't allow them their hard cover books would lose favor with Amazon.  So of course the prices went up when the publishers were able to have leverage against Amazon for this practice!  

 

Sounds more to me like someone in the government has an axe to grind with Apple. 

post #20 of 85

We're talking about books. Why is the DOJ spending so much taxpayer money going after Apple when gas prices and the stock market are clearly manipulated. Where is the DOJ when we really need them. I spend a whole lot more money on gas in one month than I spend on books in an entire year. The person pushing this at the DOJ must really hate Apple. They basically let Microsoft off with a slap of the hand over their obviously predatory monopoly and here they want to completely shut the iBookstore down. I'd check to see what stocks and investments the DOJ people are holding. Must be in Amazon.

post #21 of 85
Quote:
Originally Posted by dasanman69 View Post


Really? I'm paying less now for 2 smartphones than I used to pay for 2 feature phones, plus there are plenty of options of getting unlimited everything for $50 or less.

 

This is just absurd.

 

Prices have clearly gone up for smart phones over the years.  If you pay less now for 2 smartphones than you used to pay for 2 feature phones, it means you were being ripped off or sold services you didn't know you had or even need back then.  There is simply no way.  Smartphones also require data plans, and there are no unlimited plans on AT&T or Verizon or Sprint for 50$ or less.  You MIGHT be able to get such a plan for a standard feature phone, but not a smartphone on one of the big 3 carriers.  A data plan alone costs 25$+, not even adding in the voice plan/text plan you are forced to buy with it.

 

Data plans on AT&T used to start at 15$ ramping up to 30$ for unlimited.  The cheapest plan is now 25$, ramping upwards to over 50$.  Right.  Cheaper.

 

I'm actually baffled that someone would want to defend the telcos as being cheap...seriously, why would you do that?

 

Recently, AT&T upped the price of upgrading your phone...it went from 16$ to over 25$.  A month later Verizon did the same thing.  That's not cheaper...it's clearly more expensive.


Edited by hpod - 8/23/12 at 4:42pm
post #22 of 85

The philosophy that a company gives something away for less than cost or at break even prices in order to bring in more customers who might also purchase something considerably more expensive while retrieving their discounted item, has always been a valid business practice. Amazon is legally allowed to do this as long as the purpose is to sell other products and not to create a monopoly. Amazon also gives away the Kindle at less than cost for the same reason. Keep consumers coming back to to the website where hopefully they will buy everything from computers to auto accessories for which Amazon has better profit margins. Apple is very experienced at this practice as well. It has been argued that Apple makes no profit on songs sold through iTunes - only enough to run the service at break even. Same with the App Store. Their cut has been justified by some as the overhead expenses of operating the service. All of which supports their main purpose of selling more devices. Clearly the end goal of Apple entering into the e-book market is to sell more iPads.

 

The difference in this case is that there is already a major competitor in the e-book market, where with iTunes, there were no competitors with a significant market share when Apple entered the music industry. Because Amazon has already forced the publishers to accept a lower than ideal price, there is no leverage for Apple to set up their system matching Amazon's price. People would not stop buying books from Amazon and switch to Apple unless there was some incentive. By designing a system that forces Amazon to raise their price, consumers will be inclined to make their purchasing decision on some other basis, something other than simply price. Forcing them to compare everything that the Apple ecosystem offers as opposed to everything that Amazon offers gives Apple a better marketing opportunity. Apple's slick integrated ecosystem is attractive to consumers and they may be more likely to consider it given that the rock bottom e-book prices are no longer available at Amazon.

 

The trick that Apple is trying pull is to make Amazon's clientele, consumers in general, the publishers and current Apple iDevice owners to all believe it was their own idea to start buying books from Apple. It is a brilliant strategy. Amazon doesn't like the idea one bit and has lobbied the government, arguing that the publishers were in collusion to fix prices. In my opinion that argument doesn't really hold water because under Apple's model the publishers would be able to set whatever price they want. The ball is really in the publishers' court. If they want to force the prices higher at Amazon they have the power to do so. Too bad they are wussies and caved in. Now that some have settled with DoJ, it is a win for Amazon and they feel empowered and are no doubt urging the DoJ to continue to go after Apple to entirely kill Apple's plan to enter the e-book market as a means to an end of selling more iPads. Apple is also looking at a similar scheme with the iBooks Author introduction to try to leverage the textbooks/education market for the same goal of selling more iPads.

 

The only issue that the DoJ can present is that consumers would have to pay more for e-books under Apple's model. They are not taking into consideration that consumers were getting the prices for less than cost and that the new higher price is actually the fair and reasonable price.

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post #23 of 85

This is one I actually think Apple is guilty of....Before you all rush to defend Apple here, look at the facts of the case. This isn't so much DOJ vs Apple as it is a price-fixing suit. All of the publishers (and Apple) all got together to raise their prices and profits at the expense of the consumer. It would be similar if all the gas companies got together and agreed to raise fuel prices. Bad for consumers and illegal.

 
Before Apple and the publishers got together, ebooks were priced and sold wholesale similar to paper books and other goods...a product manufacturer (publishers) made a product, set a price, and sold it to a store (bookstores). The vendor (such as Amazon) could choose to sell it at whatever price they wanted, making as much or little profit as they desired. Your local grocery store or Walmart has a sale, brings you into the store, hopefully you buy more items. Amazon priced bestsellers at $9.99....same as the grocery store lowering price of eggs this week only. Publishers still made the same amount of money regardless of what Amazon sold it at.
 
The suit claims that the publishers wanted more money and rather than try to compete with Amazon on price (fairly and legally) and possible lower their precious cut of each sale, Apple wanted a larger piece of the sale, so with Apple the publishers forced the industry to an agency model where the manufacturer sets and can change the price at any time, and the vendor MUST sell it at that price and gets a percentage cut (in Apple's case, they get 30%). Publishers make more, Apple makes more, consumer pay more. That by itself is not necessarily illegal However  (and this is the real ugly part of the suit) by getting all the publishers to conspire together on price (which is illegal) they forced Amazon's hand with the ultimatum (accept the new prices or we don't sell you books anymore)
 
So up to this point, the majority of the "illegal" activity was on the part of the Publishers (and Simon & Schuster, Hachette, and HarperCollins have already settled with DOJ). So where Apples hand are the most dirty is that they acted as the "critical conspiracy participant" by promising all the publishers the exact same deal and keeping everyone informed about the status of negotiations. (aka price-fixing) They used the publishers to force Amazon into a model that only benefited Apple. But you may ask, won't Amazon make more money too? Maybe, maybe not. But Apple orchestrated the whole thing to guarantee they make the most. Apple used the publishers against Amazon, and demanded "most favored nation" clauses that required each publisher to have the iBooks version of each book set at the "lowest" price from all other competitors — even where the publisher didn't set prices. According to the DOJ, this "was designed to protect Apple from having to compete on price at all," while still netting the company a commission. So Apple always has the lowest price of any bookstore, no matter what, it always makes the highest percentage profit from each book no matter what, and overall prices of ebooks rise.
 
That is illegal. And that is why DOJ sued Apple. If Apple wants to make bazillions by making better products than other companies, and build better stores and distribution models, and compete fairly, great. I love it! If they want to guarantee profits while consumers pay more, that is illegal.
post #24 of 85
Quote:
Originally Posted by mstone View Post

The philosophy that a company gives something away for less than cost or at break even prices in order to bring in more customers who might also purchase something considerably more expensive while retrieving their discounted item, has always been a valid business practice. Amazon is legally allowed to do this as long as the purpose is to sell other products and not to create a monopoly. Amazon also gives away the Kindle at less than cost for the same reason. Keep consumers coming back to to the website where hopefully they will buy everything from computers to auto accessories for which Amazon has better profit margins. Apple is very experienced at this practice as well. It has been argued that Apple makes no profit on songs sold through iTunes - only enough to run the service at break even. Same with the App Store. Their cut has been justified by some as the overhead expenses of operating the service. All of which supports their main purpose of selling more devices. Clearly the end goal of Apple entering into the e-book market is to sell more iPads.

 

The difference in this case is that there is already a major competitor in the e-book market, where with iTunes, there were no competitors with a significant market share when Apple entered the music industry. Because Amazon has already forced the publishers to accept a lower than ideal price, there is no leverage for Apple to set up their system matching Amazon's price. People would not stop buying books from Amazon and switch to Apple unless there was some incentive. By designing a system that forces Amazon to raise their price, consumers will be inclined to make their purchasing decision on some other basis, something other than simply price. Forcing them to compare everything that the Apple ecosystem offers as opposed to everything that Amazon offers gives Apple a better marketing opportunity. Apple's slick integrated ecosystem is attractive to consumers and they may be more likely to consider it given that the rock bottom e-book prices are no longer available at Amazon.

 

The trick that Apple is trying pull is to make Amazon's clientele, consumers in general, the publishers and current Apple iDevice owners to all believe it was their own idea to start buying books from Apple. It is a brilliant strategy. Amazon doesn't like the idea one bit and has lobbied the government, arguing that the publishers were in collusion to fix prices. In my opinion that argument doesn't really hold water because under Apple's model the publishers would be able to set whatever price they want. The ball is really in the publishers' court. If they want to force the prices higher at Amazon they have the power to do so. Too bad they are wussies and caved in. Now that some have settled with DoJ, it is a win for Amazon and they feel empowered and are no doubt urging the DoJ to continue to go after Apple to entirely kill Apple's plan to enter the e-book market as a means to an end of selling more iPads. Apple is also looking at a similar scheme with the iBooks Author introduction to try to leverage the textbooks/education market for the same goal of selling more iPads.

 

The only issue that the DoJ can present is that consumers would have to pay more for e-books under Apple's model. They are not taking into consideration that consumers were getting the prices for less than cost and that the new higher price is actually the fair and reasonable price.

 

Actually, this sort of practice is very grey area when you're talking about reselling 3rd party products at a loss.  Microsoft once sold the XBOX at a loss, which is legal, as it was their own product.  Amazon is driving 3rd party product prices down...because they can...when many of their direct competitors cannot.  Amazon may own the Kindle, and would be perfectly within it's right to sell it for 1$ taking a massive loss on the hardware, but the content doesn't belong to Amazon...and for them to accept losses on 3rd party content makes it impossible for small businesses to compete with them...which is their actual goal by doing this.

 

As an example of what I see happening: Amazon may have the money to buy my books and then resell them at a loss, driving down the prices of my books...but the book store on the corner cannot...so they end up going out of business, and now that they're out of business, I have nobody else to sell my books too other than Amazon...and now Amazon can stop accepting losses and simply tell me they're giving me less...because now I have no alternatives to go too to sell for higher.

 

I think this case is a bit more complex than meets the eye.  I don't know if Apple is entirely innocent in this, but Amazon isn't, either.  While it's great for me and you that Amazon can sell books so cheaply...it won't be so great if Amazon makes it harder and harder for publishers to make any money doing it.


Edited by hpod - 8/23/12 at 4:30pm
post #25 of 85
Quote:
Originally Posted by lkrupp View Post

Can we stop with the bovine excrement about how e-book pricing should be a fraction of the print edition. It has NOTHING to do with how much it costs to distribute either form. It's about compensating the author for their intellectual work and artistic endeavor. It is the height of stupidity to equate how much the paper and ink costs with the value of the content. It's not about the book or electronic file, its about what's in it.

Exactly you hit the nail on the head.  The price is set by the author and the publisher and has not one thing to do with paper/print version or electronic.  All apple was doing was letting the publishers set the prices for there books and authors represented by them and taking its usual 30% cut nothing more.  The doj are idiots and are wasting taxpayers money.

post #26 of 85
Quote:
Originally Posted by Mechanic View Post

Exactly you hit the nail on the head.  The price is set by the author and the publisher and has not one thing to do with paper/print version or electronic.  All apple was doing was letting the publishers set the prices for there books and authors represented by them and taking its usual 30% cut nothing more.  The doj are idiots and are wasting taxpayers money.

 

I think it's fair to say the cost of printing, binding and distributing a hard cover or paper back book is priced into the cost and obviously more expensive than digital distribution...but that cost probably isn't more than a few dollars.  I agree that what you're paying for in majority, however, is the content.

post #27 of 85
Well, there are only 3 branches in the U.S., right? Executive, Legislative and Department of Justice. Why have trials when we can go right from intimidation phase to settle phase¿
post #28 of 85
Quote:
Originally Posted by Cash907 View Post

 

So why were prices substantially lower when Amazon was leading the market, and didn't go up until after Apple joined the game?

 

I can agree that prices were perhaps too low initially, but things have gotten out of hand with eBooks retailing 2 dollars less than hardback copies in many cases. I'm sorry, but that's absolutely ridiculous.

amazon was selling at a loss to get market share. even though i only buy kindle versions i support apple on this. 

post #29 of 85
Quote:
Originally Posted by jrapps View Post

 All of the publishers (and Apple) all got together to raise their prices and profits at the expense of the consumer. It would be similar if all the gas companies got together and agreed to raise fuel prices.

Um if you have been following the case the publishers did get together about this but apple was not present at that meeting and have said so in public.  The only thing apple is guilty of is allowing the publishers to set there own prices for there books on the apple ibook store.

 

I would also argue that the publishers only put the book prices back where they wanted them because amazon was selling them below wholesale which garners amazon  business by attracting customers with below wholesale prices on books but does nothing for the authors especially independent authors, and the publishing houses being able to make any money, not to mention small book stores being put out of business by amazon subsidizing super low prices on books making it up with other sales on different merchandise that small book houses cannot. 

post #30 of 85
I cannot think of a circumstance where the government should even have the opportunity to request a summary judgement. I know the DOJ wants to pretend this is a civil matter. The whole notion is an absurd attemp to dance around due process and a fair trial.
post #31 of 85
Quote:
Originally Posted by Mechanic View Post

I would also argue that the publishers only put the book prices back where they wanted them because amazon was selling them below wholesale which garners amazon  business by attracting customers with below wholesale prices on books but does nothing for the authors especially independent authors, and the publishing houses being able to make any money, not to mention small book stores being put out of business by amazon subsidizing super low prices on books making it up with other sales on different merchandise that small book houses cannot. 

I seriously doubt that Apple cares about authors, publishers or small book sellers either. They might benefit the obscure unknown author as a coincidental side effect but they certainly are not concerned about the small book seller. Apple is only interested in extending their ecosystem to drive sales of their devices. That is their single purpose in entering the e-book market.

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post #32 of 85
Quote:
Originally Posted by RichL View Post

 

... and then Apple entered the market and prices went UP rather than DOWN. It's really no surprise that the DoJ are investigating. Competition is supposed to lead to lower prices. Any other scenario is highly suspicious. 

Prices went up because the publishers put the prices where they wanted them.  Not where amazon did to sell them below wholesale.  Apple had and has nothing to do with the price of ebooks on the ibook store the publishers do.  Apple just takes there normal 30% cut for hosting and distribution.  Just like they do with music and with movies and with the app store.

post #33 of 85
Quote:
Originally Posted by mstone View Post

I seriously doubt that Apple cares about authors, publishers or small book sellers either. They might benefit the obscure unknown author as a coincidental side effect but they certainly are not concerned about the small book seller. Apple is only interested in extending their ecosystem to drive sales of their devices. That is their single purpose in entering the e-book market.

But the fact remains that apple does not set those prices the publishers do, apple takes there usual 30% nothing more.  I doubt apple cares about the small resellers either but if amazon is the only place left because the DOJ puts there stupid lawsuit through, It is the small resellers and the independent publishers, and independent authors that will suffer from an amazon monopoly again.  Even Senators have come out against this lawsuit.  It is stupid.  I agree with you that apple does this to push the sales of there iDevices and there ecosystem but the money that they make from these sales doesn't amount to anything more than a drop in the bucket to them.

post #34 of 85

Under the circumstances, where the DoJ is DEMANDING that Apple's GUILT is assumed, without giving them the opportunity to defend themselves from these ALLEGATIONS which is their RIGHT given under the constitution of the United States of America, this seems oddly appropriate:-

 

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post #35 of 85
Quote:
Originally Posted by RichL View Post

 

... and then Apple entered the market and prices went UP rather than DOWN. It's really no surprise that the DoJ are investigating. Competition is supposed to lead to lower prices. Any other scenario is highly suspicious. 

 

Do you have ANY proof whatsoever of this?

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post #36 of 85
Quote:
Originally Posted by Cash907 View Post

 

So why were prices substantially lower when Amazon was leading the market, and didn't go up until after Apple joined the game?

 

I can agree that prices were perhaps too low initially, but things have gotten out of hand with eBooks retailing 2 dollars less than hardback copies in many cases. I'm sorry, but that's absolutely ridiculous.

 

Where is your supporting evidence?

 

Show what the impact of Apple's entry to the market was on the average price of eBooks, not just a few select titles.

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post #37 of 85
Quote:
Originally Posted by dasanman69 View Post


You're correct the eBooks were being sold at a loss by Amazon, but people don't really care about that fact. They got used to buying bestsellers for $9.99 and when that got taken away screamed bloody murder and I'd say it was a few with some political clout. Although I believe Apple did nothing wrong I don't believe the publishers are innocent.

 

The top 3 best sellers, "The Shades of grey" series, ARE STILL $9.99 in iBooks and have been for months now.

 

There goes that argument.

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post #38 of 85
Quote:
Originally Posted by jrapps View Post

This is one I actually think Apple is guilty of....Before you all rush to defend Apple here, look at the facts of the case. This isn't so much DOJ vs Apple as it is a price-fixing suit. All of the publishers (and Apple) all got together to raise their prices and profits at the expense of the consumer. It would be similar if all the gas companies got together and agreed to raise fuel prices. Bad for consumers and illegal.

 
Before Apple and the publishers got together, ebooks were priced and sold wholesale similar to paper books and other goods...a product manufacturer (publishers) made a product, set a price, and sold it to a store (bookstores). The vendor (such as Amazon) could choose to sell it at whatever price they wanted, making as much or little profit as they desired. Your local grocery store or Walmart has a sale, brings you into the store, hopefully you buy more items. Amazon priced bestsellers at $9.99....same as the grocery store lowering price of eggs this week only. Publishers still made the same amount of money regardless of what Amazon sold it at.
 
The suit claims that the publishers wanted more money and rather than try to compete with Amazon on price (fairly and legally) and possible lower their precious cut of each sale, Apple wanted a larger piece of the sale, so with Apple the publishers forced the industry to an agency model where the manufacturer sets and can change the price at any time, and the vendor MUST sell it at that price and gets a percentage cut (in Apple's case, they get 30%). Publishers make more, Apple makes more, consumer pay more. That by itself is not necessarily illegal However  (and this is the real ugly part of the suit) by getting all the publishers to conspire together on price (which is illegal) they forced Amazon's hand with the ultimatum (accept the new prices or we don't sell you books anymore)
 
So up to this point, the majority of the "illegal" activity was on the part of the Publishers (and Simon & Schuster, Hachette, and HarperCollins have already settled with DOJ). So where Apples hand are the most dirty is that they acted as the "critical conspiracy participant" by promising all the publishers the exact same deal and keeping everyone informed about the status of negotiations. (aka price-fixing) They used the publishers to force Amazon into a model that only benefited Apple. But you may ask, won't Amazon make more money too? Maybe, maybe not. But Apple orchestrated the whole thing to guarantee they make the most. Apple used the publishers against Amazon, and demanded "most favored nation" clauses that required each publisher to have the iBooks version of each book set at the "lowest" price from all other competitors — even where the publisher didn't set prices. According to the DOJ, this "was designed to protect Apple from having to compete on price at all," while still netting the company a commission. So Apple always has the lowest price of any bookstore, no matter what, it always makes the highest percentage profit from each book no matter what, and overall prices of ebooks rise.
 
That is illegal. And that is why DOJ sued Apple. If Apple wants to make bazillions by making better products than other companies, and build better stores and distribution models, and compete fairly, great. I love it! If they want to guarantee profits while consumers pay more, that is illegal.

 

All allegations.

 

In the USA under the constitution, you are guaranteed certain rights, one of the most fundamental of which is the presumption of innocence.

 

The DoJ is asking for those rights to be forfeited in this case.

 

That is unconstitutional.


Edited by hill60 - 8/23/12 at 5:38pm
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post #39 of 85
Quote:
Originally Posted by mstone View Post

The philosophy that a company gives something away for less than cost or at break even prices in order to bring in more customers who might also purchase something considerably more expensive while retrieving their discounted item, has always been a valid business practice. Amazon is legally allowed to do this as long as the purpose is to sell other products and not to create a monopoly.

You just managed to negate your own argument. Amazon was well on their way to having a monopoly sufficient to control the market before Apple stepped in. Amazon was pretty clearly using predatory pricing - which is illegal.
Quote:
Originally Posted by jrapps View Post

This is one I actually think Apple is guilty of....Before you all rush to defend Apple here, look at the facts of the case. This isn't so much DOJ vs Apple as it is a price-fixing suit. All of the publishers (and Apple) all got together to raise their prices and profits at the expense of the consumer. It would be similar if all the gas companies got together and agreed to raise fuel prices. Bad for consumers and illegal..

AND IMAGINARY

Where's your evidence that Apple conspired to fix prices?

The only evidence that the DOJ has provided is a statement from Steve Jobs to one or more publishers suggesting that they'd like for prices to be higher. So what? Virtually every business in the country would like to get more money for their products. There's nothing illegal about pointing out the obvious.

But feel free to provide evidence showing Apple's guilt. The DOJ hasn't managed to do so - which is why they're trying so hard to get Apple to settle.
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post #40 of 85
At this pont I think a trial would be a good thing.
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