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DOJ claims Apple's changes to in-app purchase rules were aimed at Amazon

post #1 of 161
Thread Starter 
The Department of Justice on Friday revised their proposal to punish Apple for iBook antitrust violations, alleging that the Cupertino company lied to the government about the manner in which the App Store operates and that changes to rules governing in-app purchases were designed to cripple Amazon's competitive Kindle app.

ibooks-130305.jpg


Notably, the updated proposal slices the injunction period from ten years to five years, while granting the government the ability to extend the injunction up to five times in one year increments, terms similar to the agreement the DOJ reached with Microsoft in their famous antitrust battle.

The DOJ has argued that while it wants to avoid a situation in which "changes in industry circumstances will cause the decree to outlive its usefulness and unnecessarily harm Apple," the government believes that "five years might not be enough time to restore competition to the e-books market and to ensure that Apple changes its troublesome business practices to prevent a recurrence of the illegal conduct."

Agreeing with a suggestion by Judge Denise Cote, the federal judge in charge of the case, the government also proposed forcing Apple to renegotiate its deals with publishers on a staggered basis, rather than all at once. The DOJ said this requirement will not allow the publishers to "'negotiate collectively' with Apple in order to effectuate contracts that will result in higher e-book prices."

Additionally, the injunction would require Apple to allow other e-book retailers in the App Store to sell e-books on the device through their own online stores for a period of two years, bypassing Apple's in-app purchase program. At a hearing earlier in August, Apple's counsel argued for the validity of forcing competitors' e-book apps to use the system by saying that the company receives 30 percent of the sale for any products purchased from within an iOS app, even physical goods like shoes.

The government seized on this statement as evidence that Apple "misrepresented the factual circumstances" surround in-app purchases, saying that it "simply is not true that Apple receives a 30 percent commission from all retailers for all goods." The DOJ has pointed to Amazon's existing Amazon.com iPad app as well as Amazon subsidiary Zappos.com's iPad app as examples of apps where purchases "do not go through Apple?s payment system, and Apple does not receive a 30 percent commission on these physical goods."

SJ-Email-iBooks.jpg


Citing an email from Steve Jobs in which the former Apple CEO suggested that Apple should "force them [Amazon] to use our far-superior payment system", the government has argued that changes to the App Store's policies in this area were "specifically to retaliate against Amazon for competitive conduct that Apple disapproved of."

The DOJ has also rebuked Apple for colluding with publishers and organizing "a blatant price-fixing conspiracy to raise e-book prices and end retail e-book price competition." The department has also accused the company's leadership of "willful and blatant violations of the law." Eddy Cue, Apple's senior vice president of Internet Software and Services, is specifically taken to task as the "ringmaster" behind the conspiracy.
post #2 of 161

Citizens claim DOJ wholly lawless.

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
Reply
post #3 of 161
I disagree completely with the DOJ's take on Steve Jobs' e-mail. Apple was clearly going ahead with its in-app purchase with its new payment system. Steve was saying that forcing Amazon to adopt it in their Kindle app would be a good thing for consumers since Apple's payment system is "far superior". Steve's other e-mail was interesting as well. It was in response to an angry e-mail from the developer of the iFlow reader app over the changes to the in-app purchase rules:

Subject: Re: How Apple Killed the iFlow Reader
From: Steve Jobs
Received(Date): Tue, 15 Feb 2011 17:13:29 -0800
Cc: Eddy Cue , Ron Okamoto , Bruce Sewell
To: Philip Schiller

IS their app any good? Lots better than iBooks? Or is this guy just pissed?
Bottom line %u2013 we didn%u2019t have a policy and now we do, and there will be some roadkill because of it. I don%u2019t feel guilty. They want to use our payment system, which we have invested a TON of money into creating and maintaining, for free and that%u2019s not going to be possible going forward.

Steve
post #4 of 161
Am I the only person here who realizes that Amazon's old pricing model single handedly destroyed the market for big box bookstores in the US? If anything Apple's pricing would have saved that entire industry by setting ebook pricing more in line with their physical counterparts. Amazon's old strategy has worked to destroy something that I believe was essential to our culture. People don't go to bookstores anymore. Amazon put them all out of business. Only now the DOJ steps in. This is so very wrong. Where we're they then? Amazon's whole strategy has always been to destroy the competition by underpricing them to the point of being uncompetitive. This isn't how I want my tax money spent. I like physical books and physical book stores. What is the DOJ doing about that? I want to see the government forcing booksellers to sell ebook sat the same price as physical books and not a dime less. That is the only way we can get our book stores back. Who's with me?
post #5 of 161
Thanks to the DOJ for providing us a legal monopoly (Amazon).
post #6 of 161

It's not at all clear (and not the preponderance of the evidence) that Steve's intentions were to knock Amazon. The DOJ should get clarification from him before assuming such.

Remember, DOJ, to "assume" makes an ass out of u and me!

post #7 of 161
This lunatic Judge is clearly in bed with amazon.... She should be investigated!
Corruption in the face.. And she is getting away with it!
post #8 of 161
I guess Amazon's latest "donation" came in. Apple doesn't have the majority of mobile devices so why is the DOJ concerned with in app payments?
post #9 of 161
That's not how I read Steve's email. Phil is saying Kindle offers an identical experience on iPhone and Android, and worried that it enables platform switching.

Steve is suggesting "forcing" the iPhone version of the app to be superior, and thus discourage platform switching, by insisting they use Apple's superior payment system. It's nothing to do with price fixing, and it's not retaliating against Amazon. It's making sure they use platform specific APIs instead of make a lowest common denominator app.
post #10 of 161

There is no department of the US government focused on Justice.

post #11 of 161
Bo ho poor amazon. NOT! First they have their own store which wasn't exactly unknown before iBooks and second NEVER NEVER NEVER sign something without reading the small print. I assume that Amazon had their lawyers do so and so should have been fully aware of the conditions. They obviously concluded that what they were asked to pay Apple was worth it in order for their market share not to have been eroded. It's not as if they got nothing out of the deal. It would not supprised me if they got more money on the 70% of the sale from Apple than from their own store for some titles that they 'discounted' to keep the share of the market. As others have said Amazon slashed the prices of Ebooks, which in the short term may be good for rhe consumer, that is until the authors can't afford to write them for such small returns. Then all you get is the odd success story and its franchises. I'm not sure I would call that good for the consumer, and it will certainly limit choice. At the end of the day if you pay peanuts you get monkeys.
post #12 of 161

Since when it is not legal to try to slow down a competitor?  

post #13 of 161
Quote:
Originally Posted by politicalslug View Post

Am I the only person here who realizes that Amazon's old pricing model single handedly destroyed the market for big box bookstores in the US? If anything Apple's pricing would have saved that entire industry by setting ebook pricing more in line with their physical counterparts. Amazon's old strategy has worked to destroy something that I believe was essential to our culture. People don't go to bookstores anymore. Amazon put them all out of business. Only now the DOJ steps in. This is so very wrong. Where we're they then? Amazon's whole strategy has always been to destroy the competition by underpricing them to the point of being uncompetitive. This isn't how I want my tax money spent. I like physical books and physical book stores. What is the DOJ doing about that? I want to see the government forcing booksellers to sell ebook sat the same price as physical books and not a dime less. That is the only way we can get our book stores back. Who's with me?
Yup, part of me is with you, PS, but cheap me does not do. Compromise: first six months~one year I aspire; then however the market desire. The loss of bookstores is a shame. Penny pinching is to blame.
Edited by mhikl - 8/23/13 at 11:23am

When I find time to rewrite the laws of Physics, there'll Finally be some changes made round here!

I am not crazy! Three out of five court appointed psychiatrists said so.

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When I find time to rewrite the laws of Physics, there'll Finally be some changes made round here!

I am not crazy! Three out of five court appointed psychiatrists said so.

Reply
post #14 of 161
Originally Posted by Rob Bonner View Post
Since when it is not legal to try to slow down a competitor?  

 

When it's done illegally, which this wasn't.

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
Reply

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
Reply
post #15 of 161

If iBooks had been distributed as a core app in iOS then Apple theoretically could have rejected the Kindle app for duplicating core functionality, although they probably wouldn't do that as it would cause some people to buy a Kindle tablet rather than an iPad. I'm surprised that Apple doesn't provide the ability to read Kindle format like they do for MS Office file formats.

 

They already have the new iBooks Author format that they should try to leverage. It is just the fiction titles that are traditionally paperback and text only that would not be improved by the new iBooks Author format.

 

The whole 30% is sort of a sticky mess. It is just a bit too high in my opinion. If it was a bit more manageable like 10-15% Amazon would just eat the difference to have access to iOS and we wouldn't be looking at these lawsuits.

 

Apple needs to enhance the iBooks app and content offerings to simply beat Amazon in quality and user experience instead of having a price war.

Life is too short to drink bad coffee.

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Life is too short to drink bad coffee.

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post #16 of 161
Quote:
Originally Posted by politicalslug View Post

Am I the only person here who realizes that Amazon's old pricing model single handedly destroyed the market for big box bookstores in the US? If anything Apple's pricing would have saved that entire industry by setting ebook pricing more in line with their physical counterparts. Amazon's old strategy has worked to destroy something that I believe was essential to our culture. People don't go to bookstores anymore. Amazon put them all out of business. Only now the DOJ steps in. This is so very wrong. Where we're they then? Amazon's whole strategy has always been to destroy the competition by underpricing them to the point of being uncompetitive. This isn't how I want my tax money spent. I like physical books and physical book stores. What is the DOJ doing about that? I want to see the government forcing booksellers to sell ebook sat the same price as physical books and not a dime less. That is the only way we can get our book stores back. Who's with me?

I don't support that idea. digital books can be priced lower than physical books causing them to go obsolete, but that's what the tech allowed it to do. Old ways get toppled as time goes on. If your so keen about the physical book u could get a print out and read.

The end user benefits from this , don't u realize that ?
post #17 of 161

"five years might not be enough time to restore competition to the e-books market..."

 

Because hamstringing Apple "restores" competition. What dream world is the DOJ living in?

post #18 of 161
I don't get this part. If Amazon can drop prices of digital books, why can't Apple do the same ?
post #19 of 161
Quote:
Originally Posted by mstone View Post

The whole 30% is sort of a sticky mess. It is just a bit too high in my opinion. If it was a bit more manageable like 10-15% Amazon would just eat the difference to have access to iOS and we wouldn't be looking at these lawsuits.

And yet both Google and Amazon take 30% of app sales and in-app purchases as well. I'm not sure Amazon does but Google specifically forces you to use their in-app purchase system as well if you use Google Play to distribute your app.

post #20 of 161
Quote:
Originally Posted by nikilok View Post

I don't get this part. If Amazon can drop prices of digital books, why can't Apple do the same ?

Apple raised the prices

post #21 of 161
The DOJ needs a good laxative.
post #22 of 161

Regarding the suggestion that Apple doesn't have a consistent 30% fee...

 

The government clearly doesn't understand the difference/distinction between ordering something on the Amazon app to be delivered to you at your front door, versus the Kindle app that's delivered to the iPhone.

 

It's stuff that gets delivered to the iPhone (be it downloaded books, extra levels on a game, etc) that falls under the 30% rule, not apps that effect transactions for other stuff. They might as well argue that Apple clearly aren't asking a level playing-field price for 'in app purchases' because people who log on to their grocery store on the Safari app in order to buy something online aren't paying 30% of the price of carrots to Apple.

 

The argument is wholly bogus.

post #23 of 161

Payback for not entering into agreement and complying with NSA/FBI data requests.....

post #24 of 161
Quote:
Originally Posted by ealvarez View Post

Apple raised the prices

Yes so why don't they drop prices to compete with Amazon ?

At one point the prices of the books can't be dropped coz they get to sell it from the publishers at a given price point. Hence there the books would end up being priced the same on all platforms , which would be cheaper than what it is today.
post #25 of 161
Quote:
Originally Posted by CogitoDexter View Post

Regarding the suggestion that Apple doesn't have a consistent 30% fee...

 

The government clearly doesn't understand the difference/distinction between ordering something on the Amazon app to be delivered to you at your front door, versus the Kindle app that's delivered to the iPhone.

 

It's stuff that gets delivered to the iPhone (be it downloaded books, extra levels on a game, etc) that falls under the 30% rule, not apps that effect transactions for other stuff. They might as well argue that Apple clearly aren't asking a level playing-field price for 'in app purchases' because people who log on to their grocery store on the Safari app in order to buy something online aren't paying 30% of the price of carrots to Apple.

 

The argument is wholly bogus.

And if the 30% fee is so heinous why are they not going after Google who does the exact same thing Apple does with regards to in-app purchases?

post #26 of 161
The DOJ is so retarded I don't know where to begin. Close the ibooks app and ban the kindle app, screw them both.
post #27 of 161
Quote:
Originally Posted by alphafox View Post

The DOJ is so retarded I don't know where to begin. Close the ibooks app and ban the kindle app, screw them both.

And what makes u think they are just behind the books alone. They did mention that the practice not be done for other content aswell. Including media.
post #28 of 161
Originally Posted by nikilok View Post
And what makes u think they are just behind the books alone.

 

Because Apple isn't "behind" anything.

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
Reply

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
Reply
post #29 of 161
Quote:
Originally Posted by AppleInsider View Post

At a hearing earlier in August, Apple's counsel argued for the validity of forcing competitors' e-book apps to use the system by saying that the company receives 30 percent of the sale for any products purchased from within an iOS app, even physical goods like shoes.

The government seized on this statement as evidence that Apple "misrepresented the factual circumstances" surround in-app purchases, saying that it "simply is not true that Apple receives a 30 percent commission from all retailers for all goods." 

 

Quote:
Originally Posted by CogitoDexter View Post

Regarding the suggestion that Apple doesn't have a consistent 30% fee...

 

The government clearly doesn't understand the difference/distinction between ordering something on the Amazon app to be delivered to you at your front door, versus the Kindle app that's delivered to the iPhone.

 

It's stuff that gets delivered to the iPhone (be it downloaded books, extra levels on a game, etc) that falls under the 30% rule, not apps that effect transactions for other stuff. They might as well argue that Apple clearly aren't asking a level playing-field price for 'in app purchases' because people who log on to their grocery store on the Safari app in order to buy something online aren't paying 30% of the price of carrots to Apple.

 

The argument is wholly bogus.

Unfortunately, Apple's high-priced, ivy-league lawyers don't understand how their own products work.

post #30 of 161

I love how the DoJ's paranoid fantasies have the force of law now, once rubber stamped by a confessed biased judge.

 

Anyone who claims that the US operates under the rule of law looks sillier by the day. 

 

So, how long until americans stop putting up with this?  The NSA, the TSA molesting children, pointless endless wars, etc. 

 

How much more will it take before people wake up? 

post #31 of 161
Quote:
Originally Posted by nikilok View Post

I don't get this part. If Amazon can drop prices of digital books, why can't Apple do the same ?

Quote:
Originally Posted by ealvarez View Post

Apple raised the prices

Apple does not set the prices. They use the agency model.

Maybe next time do a little research before you make yourself look like an idiot.
post #32 of 161
Quote:
Originally Posted by iaeen View Post


Apple does not set the prices. They use the agency model.

Maybe next time do a little research before you make yourself look like an idiot.

Right so say the case goes in amazons favor what happens ? Apple can't use the agency model ?
post #33 of 161

So...

 

Apple makes a change to their payment system. One Apple's products. Running Apple software. Using Apple servers.

 

And the DOJ says Apple needs to like Amazon more. That's what it amounts to. 

 

Heck, maybe the DOJ needs to... you know... actually be just and fair and make Amazon have iTunes available on Kindles

 

No excuses.  iTunes is available on Mac and PC. Easily done on Kindle.

 

That's really the only monopolistic, anticompetitive behavior going on. 

 

Seems like some serious lobbying at work here.

 

Souldn't it be up to AMAZON to file suit? Why the heck is the DOJ being the plaintiff? Serious communism at work here.

 

One of the great things about the Apple ecosystem is that consumers don't have to get shoved around by all these different schemes from third parties.  They sign up with the Apple ID and click "buy" and its a known quantity every time.  No surprises. That's a good thing. DOJ should take note. 

 

I think it's time the DOJ is investigated for their interesting agendas.

post #34 of 161
Quote:
Originally Posted by nikilok View Post

I don't support that idea. digital books can be priced lower than physical books causing them to go obsolete, but that's what the tech allowed it to do. Old ways get toppled as time goes on. If your so keen about the physical book u could get a print out and read.

The end user benefits from this , don't u realize that ?

I read the OP's comment as pointing out that ebooks under amazon were a threat to the publishing industry, not just physical books.

With amazons predatory prices, the publishers were not able to recuperate their costs for bringing a book to print. If they can't recuperate their costs, they go out of business. If they go out of business, quality books disappear. End user suffers.
post #35 of 161
So, you still think that Obama's men are not in the Amazon's pocket? Amazon needs not to pay them, just convince them that their strategy is the best for the middle class. Nowadays German firms go for high quality, in the USA cheap is cherrished.
post #36 of 161
Quote:
Originally Posted by iaeen View Post

I read the OP's comment as pointing out that ebooks under amazon were a threat to the publishing industry, not just physical books.

With amazons predatory prices, the publishers were not able to recuperate their costs for bringing a book to print. If they can't recuperate their costs, they go out of business. If they go out of business, quality books disappear. End user suffers.

How would quality books disappear ?
They would all be available on tablets to consume. Just that the print industry goes dead. Yeah so big deal. Will save more trees and help the planet. I don't understand how end users suffer ?
post #37 of 161
Quote:
Originally Posted by nikilok View Post

Right so say the case goes in amazons favor what happens ? Apple can't use the agency model ?

I really couldn't tell you. With all the bizaare horse shit coming from the DOJ and the judge in charge of the case I would say the result could be anything up to and including nationalization of iOS.
post #38 of 161
Quote:
Originally Posted by nikilok View Post

I don't get this part. If Amazon can drop prices of digital books, why can't Apple do the same ?

Theoretically Apple could, if it had the appropriate agreements in place with publishers. But would Apple want to get into the tedious, boring business of monitoring the market and adjusting prices on hundreds, thousands or even tens of thousands of items, and risk or choose to take a loss? I don't think so.

post #39 of 161
Quote:
Originally Posted by nikilok View Post

How would quality books disappear ?
They would all be available on tablets to consume. Just that the print industry goes dead. Yeah so big deal. Will save more trees and help the planet. I don't understand how end users suffer ?

Publishing is about more than just printing books. If the publishers can't make enough money to pay the authors and editors, quality will suffer.
post #40 of 161
Quote:
Originally Posted by 9secondko View Post

So...

 

Apple makes a change to their payment system. One Apple's products. Running Apple software. Using Apple servers.

 

And the DOJ says Apple needs to like Amazon more. That's what it amounts to. 

 

Heck, maybe the DOJ needs to... you know... actually be just and fair and make Amazon have iTunes available on Kindles

 

No excuses.  iTunes is available on Mac and PC. Easily done on Kindle.

 

That's really the only monopolistic, anticompetitive behavior going on. 

 

Seems like some serious lobbying at work here.

 

Souldn't it be up to AMAZON to file suit? Why the heck is the DOJ being the plaintiff? Serious communism at work here.

 

One of the great things about the Apple ecosystem is that consumers don't have to get shoved around by all these different schemes from third parties.  They sign up with the Apple ID and click "buy" and its a known quantity every time.  No surprises. That's a good thing. DOJ should take note. 

 

I think it's time the DOJ is investigated for their interesting agendas.

 

No. You know nothing about communist. Communism has no trade/economic system, communism should be compared with religious/Feudal systems, where the party is the feudal master. Couldn't this be the working of lobbying?
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