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US court finds Apple guilty of conspiring to raise e-book prices - Page 4

post #121 of 153
Quote:
Originally Posted by tribalogical View Post

This is the entire case in a nutshell:

"Apple led the charge in convincing publishers to switch to a so-called "agency" pricing model. That prevented content owners from being able to sell the same titles at a lower price elsewhere, without offering the same price on Apple's iBooks platform.

In contrast, the e-book industry prior to the launch of the first iPad was under the "wholesale model" preferred by market leader Amazon. In that model, resellers such as Amazon had the power to set prices, selling titles at or below cost if they chose to do so."


For me, the question that matters here (and that was apparently overlooked by the court) is the one that comes from that last part regarding Amazon's 'powers': Did Apple's actions PREVENT Amazon from setting their own RETAIL prices at or below cost if they chose to do so? Apple didn't remove the "wholesale model" from Amazon, did they? They simply said to publishers, "if you sell to Amazon (or others) for a lower price, you have to give us that price too. And to the publishers they said, on OUR store YOU set the prices, not us.

Where is there "price fixing" or "conspiring" to raise prices? I just don't see it%u2026

 

 

That is NOT the entire case in a nut shell.

 

With the help of Apple, publishers collectively(conspired) forced Amazon to adopt the Agency model and simultaneously raising prices(price fixing) for consumers.

 

Antitrust laws were created to protect consumers, not businesses.

No matter what type of media...movies, music, books, photos and web pages

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No matter what type of media...movies, music, books, photos and web pages

look better and sound better on the Kindle Fire HD and HDX than any iPad

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post #122 of 153
Quote:
Originally Posted by Russell View Post


That is NOT the entire case in a nut shell.

With the help of Apple, publishers collectively(conspired) forced Amazon to adopt the Agency model and simultaneously raising prices(price fixing) for consumers.

Antitrust laws were created to protect consumers, not businesses.

It is hard to believe Amazon didn't have more influence than Apple.

In addition then why did the government go after Microsoft for IE? IE was free. Free is good for consumers. Fact is competition is required. Amazon had a near monopoly and was undercutting others so they could not make a buck.
post #123 of 153
Quote:
Originally Posted by jungmark View Post


It is hard to believe Amazon didn't have more influence than Apple.

In addition then why did the government go after Microsoft for IE? IE was free. Free is good for consumers. Fact is competition is required. Amazon had a near monopoly and was undercutting others so they could not make a buck.

 

As I stated in a previous post, the issue with MS and IE was that MS used their monopoly position in one industry (operating systems) to force their way into another (web browsers). This prevented others from being able to compete with IE, not because IE was good, and not even because it was free. They couldn't compete because MS used their OS position to force PC vendors to include IE (and later IE was integrated into the OS) and to forbid them from including other web browsers on the PCs they sold.
post #124 of 153
Something good of all this mess may at least be that more people are aware of the vast artibtrary power of the government to interfere in all manner of private life. Reasonable people seem to understand that going after Apple in this way (not to mention the publishers and, by extension, authors) is unjust. Perhaps this will help erode the perversion of antitrust laws and lead the so called Department of Justice to review its practices.

Here's a nice parallel video from 1979 or 1980:

Who Protects the Consumer?
http://www.youtube.com/watch?v=EU_4vanP04I
From the Milton Friedman series Free to Choose
Running time is approximately 58 minutes
Includes a moderated discussion between Friedman and statist representatives at the end.

Quite interesting. It reminds me of the the government strong-arming used to force Chrysler's recall of safe vehicles:
http://www.startribune.com/business/212017211.html

What a wonderful world.
When will the governments realize it's got to be funky, sexy ladies?
-Flight of the Conchords
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When will the governments realize it's got to be funky, sexy ladies?
-Flight of the Conchords
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post #125 of 153
Quote:
Originally Posted by winchester View Post

I'm not siding with Apple for the sake of siding with Apple. But if what they did was in violation of an antitrust law, I just think it's a stupid law! It's only logical for a retailer to bargain with suppliers for the lowest possible price.

To my knowledge, the only stipulations made by apple were that publishers offer them the lowest available price for their ebooks and that apple collect a 30% retailers fee. How is this illegal? Regardless of emails Steve Jobs may or may not have sent- these terms were not dictated in the deals that were signed by the publishing companies. They were just thoughts being communicated. How long does the arm of the government extend? Has it become illegal for corporate leaders to casually share ideas with each other leading up to a business partnership? This, to me sounds ridiculous! If this is the law, it needs to be changed.

 

The issue wasn't that Apple would buy the product for the lowest possible price, but that Apple would guarantee through collusion that their selling price would be the lowest.  It wasn't Apple's adoption of an agency model that was illegal, but rather that they convinced the publishers to strong-arm Amazon into an agency model that ensured Apple's prices would be lower than Amazons, preventing Amazon from selling books in a retail model (ie. Amazon buys at the price the publisher sets, then re-sells book at whatever price they want).  

 

This is pretty much the prototypical anti-trust scenario...  

post #126 of 153
Quote:
Originally Posted by Mikeb85 View Post

The issue wasn't that Apple would buy the product for the lowest possible price, but that Apple would guarantee through collusion that their selling price would be the lowest.  It wasn't Apple's adoption of an agency model that was illegal, but rather that they convinced the publishers to strong-arm Amazon into an agency model that ensured Apple's prices would be lower than Amazons, preventing Amazon from selling books in a retail model (ie. Amazon buys at the price the publisher sets, then re-sells book at whatever price they want).  

This is pretty much the prototypical anti-trust scenario...  

Here's a good article.

http://tidbits.com/article/13912
post #127 of 153
Quote:
Originally Posted by pauldfullerton View Post

But you are missing the point here. The price you pay for an eBook has at least 2 components: the cost that is paid to the author/publisher, and the cost that is 'siphoned off' by the distributor. The price matching you are talking about is all about price competition among distributors who are competing for your business, not price competition driven by authors or even the publishers. The distributors add no value to the product itself other than providing authors with access to buyers. And in the case of electronic products, like eBooks and software, Apple's stores offer by far the most efficient way of distributing electronic products to a global market. B&N and Amazon just can't compete with the distribution model created by Apple. Their outdated business model, involving price competition on distribution only, should not be protected by the DoJ.

Why would publishers need to compete on price? One publisher doesn't offer the same exact books as another only distributors do that so they're the ones that need to compete on price. Amazon's way did indeed present roadblocks for competitors but Apple's way does too. All we're going to eventually have is a duopoly with high prices instead of a near monopoly with low prices.
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
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"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
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post #128 of 153
Quote:
Originally Posted by WIJG View Post

It reminds me of the the government strong-arming used to force Chrysler's recall of safe vehicles:
http://www.startribune.com/business/212017211.html

What a wonderful world.

Because we should just take a big corporation's word for it that their products are safe.

We should also let the financial sector regulate itself.

While we're at it, I have some shoreline property to sell you in Florida.
post #129 of 153
I love Apple products but the iBookstore really, really boggles my mind.

I'm not saying Apple did/did not do wrong here; I am saying that Apple's hands clearly got dirty by shaking the wrong hands.

Apple's iBookstore pricing is something to behold--on average, nearly all the books I look for are either the same price or higher than Kindle. However, Kindle has more books, and more access to them (i.e. Macs, iOS, PC, Web, Android, etc.)--I am not saying Amazon is some grandiose savior of the book-buying public but charges less money for the same item, and with better access for its customers to view their content.
post #130 of 153
Quote:
Originally Posted by JuanGuapo View Post

I love Apple products but...

Quote:
I'm not saying Apple did/did not do wrong here; I am saying that Apple's hands clearly got dirty by shaking the wrong hands.

I'm not saying you've read absolutely nothing about what's going on here, but...

Originally posted by Relic

...those little naked weirdos are going to get me investigated.
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Originally posted by Relic

...those little naked weirdos are going to get me investigated.
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post #131 of 153
Quote:
Originally Posted by Tallest Skil View Post


I'm not saying you've read absolutely nothing about what's going on here, but...

it sure seems that way.
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
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"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
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post #132 of 153
Quote:
Originally Posted by jkichline View Post

This is bullshit. A business trying to ADD competition gets slapped with anti-competition? Give me a break America. What a farce.

How does the Agency model ADD competition among current retailers? From how it is structured it completely eliminates current retail competition and creates monopolies of the publishers involved since no one else but the publisher may sell any particular title unless there is some kind of breach of contract involved.  What I mean by 'sell' is not just acting as a consignee but actively managing the price of products sold via their store to compete with other stores.

post #133 of 153
Quote:
Originally Posted by mjtomlin View Post
 

The funny thing about all of this... Apple has the ability (money) to undercut pricing that Amazon couldn't match and take a large chunk of their market share from them... but I bet Apple would've been sued by the DOJ for anti-trust there too. LOL

 

 

There are supposed to be laws that protect competition in the market place... A company is not allowed to undercut pricing to the point that other competitors cannot sustain a business... And yet this is exactly what Amazon has been doing.

 

I understand there are also laws to protect consumers from being forced to overpay for a certain type of product, this is why we have collusion laws, but book prices DID NOT GO UP after Apple entered the market, they went back to their NORMAL prices before Amazon ransacked the market.

 

The fact that this judge is too short-sighted to see that is just ignorant.

The problem with this is that Amazon only had "loss-leader" prices for a select few titles and then only for a couple weeks before returning those titles to competitive prices.  That those titles were newly announced best sellers does not make a difference since the ebook segment of Amazon has been shown to make a profit from the back-list ebooks that are usually associated with those bestsellers as well as independent ebooks sold via Amazon.  Now if Apple had gone and made ALL ebooks sold at cut-throat prices to compete with Amazon that would be against the law since you are taking a TOTAL loss on that segment of your business in order to push competitors out of business.  What a lot of people fail to see is that Amazon sells KINDLE formatted books with its own set of distinguishing features compared to TXT, EPUB, etc.  There is some value in the format and Apple chooses not to use the features in their own iBook format to compete. Also Amazon has Apps across multiple platforms to allow you to consume ebooks formatted in Kindle format, something Apple continues to refuse to do.  

post #134 of 153
Quote:
Originally Posted by Xennex View Post
 

The problem with this is that Amazon only had "loss-leader" prices for a select few titles and then only for a couple weeks before returning those titles to competitive prices.  That those titles were newly announced best sellers does not make a difference since the ebook segment of Amazon has been shown to make a profit from the back-list ebooks that are usually associated with those bestsellers as well as independent ebooks sold via Amazon.  Now if Apple had gone and made ALL ebooks sold at cut-throat prices to compete with Amazon that would be against the law since you are taking a TOTAL loss on that segment of your business in order to push competitors out of business.  What a lot of people fail to see is that Amazon sells KINDLE formatted books with its own set of distinguishing features compared to TXT, EPUB, etc.  There is some value in the format and Apple chooses not to use the features in their own iBook format to compete. Also Amazon has Apps across multiple platforms to allow you to consume ebooks formatted in Kindle format, something Apple continues to refuse to do.  

 

The iPad and iBooks brought colour and illustrations to iBooks when Amazon still had black and white bastardised PDFs.

 

Torrents are cheapest therefore "best" for consumers, why doesn't the DoJ support them?

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post #135 of 153
Quote:
Originally Posted by Techboy View Post
 

 

This is one of the many damn misconceptions with this case. Apple coming into the picture to compete and offer alternative pricing to Amazon...prices for ebooks went up because publishers now sets the prices via agency model. So what is the problem? Are you insisting publishers can't set their own price but it's okay for Amazon to sell at a lose or little gain? I sense this judge don't have a clue of where the technology is heading regarding e-commerce.

 

Let's pretend ebooks are groceries for a second, anyone have a problem with one store selling same goods at higher price than another? What about another store 2 miles out matching the same price? or a higher in the middle of nowhere selling at prices much higher than within a crowded town? Ever go on a vacation or tourist trap towns and paid a few dollars more for same bottle of water that you would otherwise get for much less??? Should we start suing everyone and say there is collusion?

 

IMHO, this judge failed in an epic way to put everything into context. All she did is blame Apple for providing an e-commerce environment for publishers to "collude". So why don't we find gun manufacturers guilty for gun and war crimes? or alcohol manufacturer for DUI? or soft drinks and snack manufacturers for obesity and health issues?

The problem with comparing eBooks to groceries is that groceries are commodities, easily replaced by another product of the same type. Books are not (yet) commodities for the average reader.

post #136 of 153
Quote:
Originally Posted by Xennex View Post
 

The problem with comparing eBooks to groceries is that groceries are commodities, easily replaced by another product of the same type. Books are not (yet) commodities for the average reader.

 

Just pray Samsung does not enter the books market.

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GOA

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GOA

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post #137 of 153
Quote:
Originally Posted by Xennex View Post
 

How does the Agency model ADD competition among current retailers? From how it is structured it completely eliminates current retail competition and creates monopolies of the publishers involved since no one else but the publisher may sell any particular title unless there is some kind of breach of contract involved.  What I mean by 'sell' is not just acting as a consignee but actively managing the price of products sold via their store to compete with other stores.


I'm not sure whether a spambot initially bumped the thread, but it seems a little odd that you responded with this a year later. I clicked thinking there was some new development that had yet to make it into an article. Their case didn't seem to pivot on whether it added competition. It did involve whether Apple's policies enabled collusion between competitors. I am more skeptical over how it was handled than whether Apple ran afoul of antitrust laws here.

post #138 of 153
Quote:
Originally Posted by pauldfullerton View Post
 

But you are missing the point here. The price you pay for an eBook has at least 2 components: the cost that is paid to the author/publisher, and the cost that is 'siphoned off' by the distributor. The price matching you are talking about is all about price competition among distributors who are competing for your business, not price competition driven by authors or even the publishers. The distributors add no value to the product itself other than providing authors with access to buyers. And in the case of electronic products, like eBooks and software, Apple's stores offer by far the most efficient way of distributing electronic products to a global market. B&N and Amazon just can't compete with the distribution model created by Apple. Their outdated business model, involving price competition on distribution only, should not be protected by the DoJ.

I'm sorry, I fail to see how Apple's distribution model is more efficient than Amazon's distribution model concerning ebooks. If anything Amazon's model is more efficient since it reaches not only iDevices via an App but the Amazon model is accessible through their proprietary Kindle but also a much larger set of devices via browser and Apps which include iDevices as a subset.

post #139 of 153

Not a spambot.. Just getting through old email..

post #140 of 153

I'm sure they could try, but I would hope they would create a nice ebook format that has great features competitive to what already exists.. Price for ebooks should not just be for the base content but also how useful the features added via the specific format is to the consumer.

post #141 of 153
Quote:
Originally Posted by hill60 View Post
 

 

The iPad and iBooks brought colour and illustrations to iBooks when Amazon still had black and white bastardised PDFs.

 

Torrents are cheapest therefore "best" for consumers, why doesn't the DoJ support them?

Yes, and it's unfortunate Apple chose not to pursue promoting and enhancing the ebooks sold in iBook format to compete.

post #142 of 153
Quote:
Originally Posted by Xennex View Post
 

Yes, and it's unfortunate Apple chose not to pursue promoting and enhancing the ebooks sold in iBook format to compete.

 

They did, Cote the puppet refused to listen.

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post #143 of 153
Quote:
Originally Posted by hill60 View Post
 

 

They did, Cote the puppet refused to listen.

Perhaps, but the case was not about pricing based on features but of alleged price fixing collusion.  Regardless of the final outcome of this entire situation it should not prevent anyone from promoting the benefits of their particular ebook format.  iBooks, if found to be beneficial by the consumer even at a higher price, should be well able to compete.

post #144 of 153
Quote:
Originally Posted by Xennex View Post
 

...What a lot of people fail to see is that Amazon sells KINDLE formatted books with its own set of distinguishing features...

 

 

Quote:
Originally Posted by Xennex View Post
 

Perhaps, but the case was not about pricing based on features but of alleged price fixing collusion.  Regardless of the final outcome of this entire situation it should not prevent anyone from promoting the benefits of their particular ebook format.  iBooks, if found to be beneficial by the consumer even at a higher price, should be well able to compete.

 

You brought it up.

 

Apple's product was differentiated, Cote treated it the same as Amazon's and refused to factor that into the pricing in her salivating, over-eager witch hunt.

 

The appeal is where Apple will get justice.

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post #145 of 153
Quote:
Originally Posted by hill60 View Post
 

 

 

 

You brought it up.

 

Apple's product was differentiated, Cote treated it the same as Amazon's and refused to factor that into the pricing in her salivating, over-eager witch hunt.

 

The appeal is where Apple will get justice.

I think my point is that Apple did not try to compete in the ebook market primarily using the benefits of their iBook format, relying rather on a contract for Agency pricing and a MFN clause.  If what was stated in this article (http://tidbits.com/article/13912) is true, Apple as a large competitor could have just refused Agency pricing and avoided this whole mess.

post #146 of 153
Quote:
Originally Posted by Xennex View Post
 

I think my point is that Apple did not try to compete in the ebook market primarily using the benefits of their iBook format, relying rather on a contract for Agency pricing and a MFN clause.  If what was stated in this article (http://tidbits.com/article/13912) is true, Apple as a large competitor could have just refused Agency pricing and avoided this whole mess.

 

When Apple launched the iPad and iBooks "Winnie the Pooh" was included for free because of it's full colour illustrations and curling of the top corner when flipping a page using a touch based interface.

 

Thus iBooks was launched showing the difference.

 

Eddie Cue testified as such, testimony which was ignored.

 

At the time the kindle was a black and white screen controlled by buttons.

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post #147 of 153
Quote:
Originally Posted by hill60 View Post
 

 

When Apple launched the iPad and iBooks "Winnie the Pooh" was included for free because of it's full colour illustrations and curling of the top corner when flipping a page using a touch based interface.

 

Thus iBooks was launched showing the difference.

 

Eddie Cue testified as such, testimony which was ignored.

 

At the time the kindle was a black and white screen controlled by buttons.

I see.. Then you're saying Apple was not confident that showing the benefits of the iBook format would not be enough to take any significant marketshare from Amazon so decided to go with the Agent model and add a MFN clause forcing a leveling of any single title to simply features of each respective format and completely ELIMINATE retail price competition across ALL ebook formats.

post #148 of 153
Quote:
Originally Posted by Xennex View Post
 

I see.. Then you're saying Apple was not confident that showing the benefits of the iBook format would not be enough to take any significant marketshare from Amazon so decided to go with the Agent model and add a MFN clause forcing a leveling of any single title to simply features of each respective format and completely ELIMINATE retail price competition across ALL ebook formats.

 

No.

 

You can't open a store without any stock.

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post #149 of 153
Quote:
Originally Posted by Xennex View Post
 

Not a spambot.. Just getting through old email..

Oh I thought it might have been bumped by something now deleted. Now I'm curious what has happened with that case.

post #150 of 153
Quote:
Originally Posted by hill60 View Post
 

 

No.

 

You can't open a store without any stock.

True, but what does having stock to sell have to do with choosing Agency over Wholesale?

post #151 of 153
Quote:
Originally Posted by hmm View Post
 

Oh I thought it might have been bumped by something now deleted. Now I'm curious what has happened with that case.

This seems to be a pretty concise and rather balanced article of the case.. (http://tidbits.com/article/13912)

post #152 of 153
Quote:
Originally Posted by hmm View Post
 

Oh I thought it might have been bumped by something now deleted. Now I'm curious what has happened with that case.

 

It's slowly ticking over.

 

On Tuesday the DoJ filed it's brief in response to Apple's appeal.

 

Today the US court of appeals in New York rejected Apple’s request to challenge the ruling before the class action trial set for 14 July.

 

​Here's the DoJ's 117 page brief.

 

http://www.scribd.com/doc/226771195/US-v-Apple-Appellees-Brief


Edited by hill60 - 5/30/14 at 7:12am
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post #153 of 153
Quote:

What happened with the publishers?

Initially the U.S. Department of Justice filed this lawsuit against Apple and five of the Big Six publishers (Random House didn’t agree to the initial iBookstore contracts). Over time, though, all five publishers settled with the Department of Justice, basically agreeing to terminate existing contracts with Apple and other ebook retailers, and renegotiate contracts that don’t prevent retailers from discounting ebook prices. However, retailers are not allowed to discount below the point of breaking even on a publisher’s works overall. In other words, Amazon can still discount titles below cost, but not to the extent of losing money on a particular publisher’s titles in their entirety.

From a practical standpoint, ebook retailers have gained price control again, and ebook prices have vacillated, dropping initially, then rising slowly. Plus, Amazon has started raising prices for scholarly and small-press books.

 

Why does no one seem to mention this? Why do they contend that Amazon is going to make boatloads of money but loosing boatloads of money against competitors with much deeper pockets?

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

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