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DoJ accuses Apple of prolonging price fixing suit for financial gain - Page 3

post #81 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.

 

Actually you are completely and utterly wrong about this in every possible regard. Publishers, much like music companies, try to pay the talent very little and have byzantine and ridiculous contracts that actually pass on as little money as possible to the authors. As an example the recording companies were still charging artists for "breakage" because when they transported physical records, a certain percentage would break. Wouldn't you agree it would be ridiculous to charge "breakage" on mp3 sales? The companies were still doing it and artists were still making a buck per album if they were lucky.

 

It isn't at all about compensating authors. The publishers came to Apple and colluded to raise prices. The expressed it was precisely because they didn't want e-book prices to undermine the prices of hardcover books.

 

 

 

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.

 

Apple wanted their 30% even though they were late to the game, didn't have an innovate or superior product to offer and didn't really care to compete on price or innovation.

 

Quote:
Originally Posted by zoetmb View Post

 

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.

 

This is ridiculous reasoning. If Amazon were to begin acting like a monopolist and harming the market, the DOJ could simply take action against them. Your reasoning states that Apple should be allowed to engage in a crime, collusion, to prevent another alleged crime that hasn't happened yet nor is it guaranteed to happen.

 

Good luck explaining to the police that you murdered your neighbor's son who is age 10 because he had to potential to be a rapist or murder in the future and you wanted to put a stop to that early.

 

Quote:
Originally Posted by jragosta View Post

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?

 

Some prices have gone down because we have self-publishing working against the interests of the big publishers as well. You have to compare apples to apples. Please see above about how declaring a private company can engage in breaking the law to prevent an alleged future breaking of the law is not permissible and in the meantime, please don't murder or harm anyone to prevent future crime from them as alleged by you.

 

Quote:
Originally Posted by Mechanic View Post

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.

 

This is not true. Apple specifically colluded with publishers and negotiated price tiers.

 

Quote:
Originally Posted by Mechanic View Post

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.

 

Again Apple does help determine prices. Apple negotiated price tiers with the publishers. I am a big Apple fan and recently bumped my post where I decried Apple not having sued Samsung because in that matter they were justified, correct and the jury found for them.

 

However the reasoning by others on this is just bizarre. A private company (Apple) must be allowed to break the law (engage in collusion) to prevent an alleged future crime (monopoly abuse) from another company (Amazon) which for some reason wouldn't be pursued as a crime by the appropriate federal law enforcement agency (DOJ) that is engaging in prosecuting a private company (Apple) today for crimes.

 

If in fact, Amazon became a monopoly in e-publishing and engaged in abuse, they would be a large target and would be sued or broken up by the DOJ.

 

Quote:
Originally Posted by hill60 View Post


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.

 

Actually there doesn't go that argument because that series isn't being sold in hard cover. The whole point of the collusion was to protect hardcover prices. Any publisher who is getting $10 for a paperback book is actually doing really well.

 

Better examples that have all three types are needed. As an example the Hunger Game book are still in the top 10. The hardcover version of those books goes for around $8.50-$9. The paperback version goes for barely above $2.50-$2.75. Amazon offers the Kindle version for $5. I'd tell you the Apple pricing but Apple doesn't offer the series.

 

 
Quote:
Originally Posted by hill60 View Post

 

The problem is, as well as selling eBooks Amazon also sells physical books, by pricing the eBooks lower it made physical book prices seem too high and turned traditional brick and mortar bookstores into browsing parlours where you could go get ideas on what to buy from Amazon.

 

Once most of them are gone then it's open slather for Amazon, their "loss leaders" contribute to the death of physical books.

 

So Apple comes along and instead of Amazon's competitors having 10% of the market they now have 30% of the market to divide up between themselves.

 

The DoJ is against fair competition and it looks like they are doing anything they can to avoid scrutiny as to the reason behind this, including abusing their powers in order to deny Apple a fair trial.

 

How is this any different than what will have happened to magazines, record stores and Blockbuster video? It's called technological progress. Apple doesn't get to break the law to stop progress but keep their 30%.

 

Quote:
Originally Posted by jragosta View Post

Blah, blah, blah.

Instead of just ranting about things you obviously don't understand, why don't you tell us specifically what law Apple has violated and provide evidence to support your position? So far, no one (not even the DOJ) has been able to do that.

 

Calling people stupid isn't a compelling argument. The DOJ has clear proof of collusion. Apple colluded with publishers to enter the market late, keep their 30% and to raise prices using a product that was not at all innovative nor cheaper. The publishers and Apple executive all met numerous times, cross checked and communicated with each other and all came to the same agreements all signed within 3 days of each other. This is an open and shut case and the DOJ is asking for a summary judgement just like Apple asks for preliminary injunctions, because it is what you do in the legal process and these early victories can save time, avoid full court hearings and make parties settle much sooner.

 

If Apple, as an example is granted a preliminary injunction against Samsung, it will be because the early evidence and arguments show that a permanent injunction would be successful if taken to a full trial. No one should reasonably claim that Apple in seeking a preliminary injunction is denying Samsung their day in court.

 

The DOJ is asking for summary judgment, NOT AGAINST APPLE which I guess people here don't understand because they can't read. They are asking for summary judgment for the settlement they have negotiated with the publishers who decided they didn't want to go to court and be tried for collusion. Apple is filing stating that these publishers cannot settle with the government.

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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post #82 of 85
Quote:
Originally Posted by trumptman View Post

Better examples that have all three types are needed. As an example the Hunger Game book are still in the top 10. The hardcover version of those books goes for around $8.50-$9. The paperback version goes for barely above $2.50-$2.75. Amazon offers the Kindle version for $5. I'd tell you the Apple pricing but Apple doesn't offer the series.

 

 

Apple doesn't have the series because the publisher has the choice not to sell in Apple's store, just like the Harry Potter series, the PUBLISHERS MAKE THAT DECISION not Apple, so much for the collusion theory.

 

"Apple engaging in unlawful acts" IS JUST AS VALID a statement as "Amazon will abuse their market power to create a monopoly", why?

 

Because they are both UNPROVEN ALLEGATIONS.

 

Some people like you, might want to live in a police state but I can guarantee that most Americans don't want to trade their constitutional rights to a fair trial for a spat over the price of books.

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post #83 of 85

"Any publisher who is getting $10 for a paperback book is actually doing really well"

 

I guess every publisher is doing really well now, since standard paperback books are going for $8.99-9.99. Check Amazon if you like, since they don't discount paperbacks.

post #84 of 85
Quote:
Originally Posted by trumptman View Post

Apple wanted their 30% even though they were late to the game, didn't have an innovate or superior product to offer and didn't really care to compete on price or innovation.

 

This is not true. Apple specifically colluded with publishers and negotiated price tiers.

 

Calling people stupid isn't a compelling argument. The DOJ has clear proof of collusion. Apple colluded with publishers to enter the market late, keep their 30% and to raise prices using a product that was not at all innovative nor cheaper. The publishers and Apple executive all met numerous times, cross checked and communicated with each other and all came to the same agreements all signed within 3 days of each other. This is an open and shut case and the DOJ is asking for a summary judgement just like Apple asks for preliminary injunctions, because it is what you do in the legal process and these early victories can save time, avoid full court hearings and make parties settle much sooner.

 

 

The DOJ is asking for summary judgment, NOT AGAINST APPLE which I guess people here don't understand because they can't read. They are asking for summary judgment for the settlement they have negotiated with the publishers who decided they didn't want to go to court and be tried for collusion. Apple is filing stating that these publishers cannot settle with the government.

 

To clarify for the people following these posts, Apple's Agency model actually more closely reflects the model publishers use now for real paper books. Pick up a book and chances are there is a retail price printed on the book itself. Publishers set that price. Retailers, when they buy this book from publishers, get a discount anywhere from 30 to 40% off this price. This is the retailer's margin, their profit from the sale of this book, if they sold it at the suggested retail price.  Sound familiar yet? Like Apple getting a 30% cut off the sale of an e-book perhaps?

 

The similarities end there though. Real world retailers assume some risk associated with physically stocking an item. Shoplifting, damage, etc. Not present as an e-book.

Real world retailers have limited shelf space and so need to make sure there is no dead stock on hand.  Electronic form - a miniscule file that is infinitely copiable.

Real world retailers actually have to spend money to stock said items. Electronically - don't have to.

Real world retailers can discount their books by however much they want.  Post-ibooks, cannot be done for ebooks. Publishers have last say.

 

 

So in answer to trumptman's first point about Apple wanting their 30%, its only fair right?

 

trumptman's 2nd point above says Apple "specifically" colluded with publishers.  Can you post links to articles or information that proves this?  I would also like to know what the "price tiers" you referred to are?

 

trumptman's other argument is that the DoJ has clear proof of collusion. I say, Show us.  That is what Apple wants too.  Show us the proof instead of saying you have proof.  A summary judgement may be had if the proof ably demonstrates that it is irrefutable but how can one refute it if you do not let us see this proof.

 

Apple is arguing against a summary judgement because the DoJ WILL use it against the other 2 publishers that have yet to settle.  As an interested and affected 3rd party Apple has the right.  If as you say the DoJ has and ironclad case then why doesn't the DoJ just go to trial instead of wasting time doing all these other motions that will get opposed anyway?  Just go to trial, prove it once and for all in a court of law, get it over with instead of showboating.

 

I now posit my reasons for the DoJ not wanting to do this:-

  1. Obviously, they do not have an ironclad case. If I had an ironclad case against anyone for anything I know I'll head to court immediately.  Apple, Penguin and Macmillan not caving in to the DoJ's pressure adds validity to this point.
  2. If you have followed the Apple vs Samsung case you would have been treated to a whole bevy of information and secrets that otherwise would never see the light of day.  DoJ is actively trying not to disclose information they are privy to now for some reason or another.  Why so secretive DoJ?
  3. Amazon's wholesale model and its predatory practices will come to light, so Amazon will definitely lose one way or another.
  4. It's an election year in the US and a loss for the DoJ before elections would be bad for the current administration. And by loss I mean finally making their info available to public scrutiny and in all rights getting pilloried for having a lousy case.  Again I ask, Who in their right mind would not want to go to court with an ironclad case?

 

Now Amazon's wholesale model is also based on a real world publisher model.  Wholesalers actually get higher discounts than retailers because the order quantities are so much higher.  Why do publishers do this? Publishing and distribution costs.  Books are published in print runs and each print run will produce a specific amount of books.  Economies of scale allow publishers to print a lot more copies at a lot less cost and wholesalers help by ordering huge quantities.  And publishers only need to ship to wholesalers' distribution centers instead of each individual retail store.  In short, wholesalers get it cheaper and can sell it cheaper.  In fact they will sell it cheaper than suggested because of the huge stockpile of books they just bought.  Inventory is a headache for any retail operation.

 

So how does this apply online? It doesn't. How it may have worked in Amazon's case is that Amazon paid the publisher for X copies of an e-book, say 100k, at y price, say $4.  So thay paid the publisher $400k.  They turn around and sell the e-book at 2.99 making a loss of $1.01 on each e-book.

Say the suggested retail price set by the publisher is $6.99, what happens to the competition then?  Who would want to set up the infrastructure to sell e-books that wont sell because Amazon has undercut you so badly.  This was the dilemma the publishers faced. Amazon had a 90% market share at its height. Since Apple has come along that has dropped to around 60%, with 25% being B&N's. I'd say competition has gone up.

The other thing that is not clear is what happens when Amazon sells beyond their 'allotted' 100k copies. Under a wholesale model you actually had price tiers, you buy H copies you get I discount, you buy J copies you get K discount and so on up to an absolute limit.  Did Amazon pay the lowest tier pricing (meaning they pay more per copy) to the publisher, or did they just say to the publishers you're still getting the same amount we paid for the initial order just by copy instead of lump sum.

 

Stupid of the publishers to agree to this. Must have been desperate and got Bezos'ed.

 

The distinction here is that for e-books, now publishers enforce the selling price so that no reseller, Apple, Amazon, etc can offer the ebook at a lower price even at their own loss. This I think is the crux of the DoJ's complaint. It is no longer a free market in the real world sense.  But then, can you apply physical goods economics to electronic commerce?  I'll let the economists answer that one.

post #85 of 85

On another note, does anyone have a link to an actual agreement with Apple regarding the 'Most Favored Nation' clause. The one where it says you cannot sell an e-book at a competitor's site cheaper than what you sell in the iBookstore.  What does it cover?  Discounts offered by the retailer? % off codes? Loyalty rewards redemption?  So many ways I've thought of to work around it but it might already be covered by Apple.

 

Anyone have an iBooks Author account, want to comment on this?

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