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Publishers propose payout of $3 per NYT bestseller in e-book settlement

post #1 of 21
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Two of the publishers named as colluders with Apple in the Justice Department's iBookStore price fixing antitrust case against Apple have already begun contacting former customers, alerting them that a "plan of distribution" has been proposed to the court for a final settlement payout.

Book publishers
Late Apple cofounder Steve Jobs introduces iBooks iPad app and partner publishers in 2010. | Source: Apple


Penguin and Mamillan, two of the five publishers named in the case surrounding Apple's iBookStore, have already created a site explaining to potential claimants how they can claim their portion of the a settlement the two publishing houses reached with the U.S. Department of Justice. Part of the plan includes a combining of the $93.21 million from the Macmillan and Penguin settlements with $69.04 million from prior settlements into a central fund, to be distributed at a later date.

If accepted by the court, the proposal would grant customers who purchased a New York Times bestseller from the iBookStore to $3.06 per title, while those purchasing other titles would be entitled to $0.73 per book. Minnesota residents may receive a higher price per e-book as the state's representation did not participate in the earlier settlements between state attorneys general and Hachette, HarperCollins and Simon & Schuster. Counsel representing Minnesota consumers successfully negotiated a higher yielding settlement with the three publishers.

The most recent notification applies only to customers that bought books from Penguin or Macmillain through iTunes. Payments will be distributed to claimants following a hearing on December 6, 2013, assuming all appeals are resolved.

In July, U.S. District Court Judge Denise Cote found Apple guilty of e-book price fixing. By the time Cote handed down her decision, though, the publishers that had been accused alongside Apple had long since settled with the DOJ.

The DOJ has requested that an external antitrust monitor be installed at Apple, so as to ensure that the iPad maker no longer engages in anticompetitive action. The Department is also calling for changes to the way purchases work when filed through the Kindle app on an iOS device.

While its publishing partners have capitulated, Apple has continued to resist the Justice Department's actions. This week, Apple's counsel entered into court records a memo saying that the ebook trial was "plainly improper" and that the Department's recommendations would lead to an unfair advantage for Amazon, the dominant player in the ebook segment.
post #2 of 21
Old news. I got my settlement email 5 hours ago. 1wink.gif

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post #3 of 21

Minnesota resident here.  My email said that final figures haven't been determined, but the estimate was "$0.93 - $3.82" per title.  Of course it also depends on the title, publisher, and date of purchase.

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post #4 of 21
Yep: "The amount of your payment will be determined based on qualifying E-book purchases identified by Apple in your iTunes account."
post #5 of 21

What about those who had to pay more from other sources because of those agreements?

post #6 of 21
Quote:
Originally Posted by EWTHeckman View Post

What about those who had to pay more from other sources because of those agreements?

 

I've only bought eBooks from the Kindle app on my Android devices and I got an email.  It's not limited to purhcases on Apple devices, if that's what you're asking.

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post #7 of 21
Quote:
Originally Posted by DroidFTW View Post

 

I've only bought eBooks from the Kindle app on my Android devices and I got an email.  It's not limited to purhcases on Apple devices, if that's what you're asking.

 



That is what I'm asking. The article seems to indicate that it's only iBook buyers that would get the proposed settlement.

post #8 of 21
It may not be limited to those who purchased from the iBookstore, but everyone will be gettings iTunes credit.

From the email (emphasis mine):
What the Settlements Provide
The Macmillan and Penguin Settlements, together with settlements previously approved by the Court, create a $162.25 million fund for payments to consumers who purchased qualifying E-books from April 1, 2010 through May 21, 2012. If the Court approves the Macmillan and Penguin Settlements, eligible consumers will receive a credit to their iTunes account that will need to be activated. The credit can be used on any purchases of E-books. The amount of your payment will be determined based on qualifying E-book purchases identified by Apple in your iTunes account.
post #9 of 21
Quote:
Originally Posted by starbird73 View Post

It may not be limited to those who purchased from the iBookstore, but everyone will be gettings iTunes credit.

From the email (emphasis mine):
What the Settlements Provide
The Macmillan and Penguin Settlements, together with settlements previously approved by the Court, create a $162.25 million fund for payments to consumers who purchased qualifying E-books from April 1, 2010 through May 21, 2012. If the Court approves the Macmillan and Penguin Settlements, eligible consumers will receive a credit to their iTunes account that will need to be activated. The credit can be used on any purchases of E-books. The amount of your payment will be determined based on qualifying E-book purchases identified by Apple in your iTunes account.

 

Hmmm… Can any E-books be purchased through iTunes for any platform other than iBooks? If that's the case, this settlement idea strikes me as … well … odd.

post #10 of 21
Quote:
Originally Posted by starbird73 View Post

It may not be limited to those who purchased from the iBookstore, but everyone will be gettings iTunes credit.

 

Not everyone is getting iTunes credit.  My email said I'll automatically get Amazon.com credit and that I have an option to get a check if I want to jump through some hoops to do it that way.

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post #11 of 21
Quote:
Originally Posted by EWTHeckman View Post

Hmmm… Can any E-books be purchased through iTunes for any platform other than iBooks? If that's the case, this settlement idea strikes me as … well … odd.

Well, only iBooks on iPad, iPod touch, iPhone, and soon Mac. That's it.
Quote:
Originally Posted by DroidFTW View Post

Not everyone is getting iTunes credit.  My email said I'll automatically get Amazon.com credit and that I have an option to get a check if I want to jump through some hoops to do it that way.

Oh, cool. I didn't buy any (that I know of) through kindle/amazon (or any qualifying books or just haven't gotten the email yet) so didn't realize/stop to think that it would be through the store you bought from.
post #12 of 21
$3 overcharge to consumers? How did the market not collaps with such extreme charges?

No, that's just what's left to consumer remedy after the lawyers take their cut.

Because its really about protecting the consumers, right?
post #13 of 21
Quote:
Originally Posted by dysamoria View Post

$3 overcharge to consumers? How did the market not collaps with such extreme charges?

No, that's just what's left to consumer remedy after the lawyers take their cut.

Because its really about protecting the consumers, right?

 

The average eBook price raised by about $3 after Apple and the publishing companies fixed the prices so it would make sense that around $3 per book goes back to the consumers.

 

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post #14 of 21
Originally Posted by DroidFTW View Post

Apple and the publishing companies fixed the prices

 

lol, enjoy your FUD.

post #15 of 21

What is so hard to understand about what happened in this case: Amazon is pushing prices to unprofitable levels in order to corner the market and gain a monopoly. Apple said no, and is now a criminal company  because of that?

 

Apple made a massive heroic move here. Do you really want Amazon controlling the world literature market? That's what's going to happen if looneys like some people around here get their way. Apple broke the law for everyone's benefit. Stop hating on those trying to protect you, it's pretty scummy.

post #16 of 21
Quote:
Originally Posted by Samnuva View Post

What is so hard to understand about what happened in this case: Amazon is pushing prices to unprofitable levels in order to corner the market and gain a monopoly. Apple said no, and is now a criminal company  because of that?

 

Apple made a massive heroic move here. Do you really want Amazon controlling the world literature market? That's what's going to happen if looneys like some people around here get their way. Apple broke the law for everyone's benefit. Stop hating on those trying to protect you, it's pretty scummy.

 

Price fixing is illegal.

 

Look, I don't think that Apple was trying to do anything nefarious here - but I do think that in this case they were on the wrong side of the law, and probably some members of their legal team are looking for jobs after this.

 

The problem is that ending competition based on price is bad for consumers.

 

Consider - imagine that all of the major manufacturers of displays got together and decided that displays will now be sold for $1000 each, making the claim that Apple pushed their profit margin too thin and wanted more breathing room. They wanted to pay their employees more, and pay their suppliers more so that their suppliers get a healthier amount of profit. By your argument, you seem to think this would be okay.

 

Short term, this would hurt both Apple and consumers. Apple's profit margins would fall, and the price of iPads would more than double, if they were sold at all. Apple's high end products might not be hurt at all - Apple might reduce profit margins on their MacBook Pros but could probably sell them for a similar price.

 

Long term, competition would fix this problem - at the very least, Apple would start manufacturing their own displays, or other manufacturers not part of the cartel would gain manufacturing capabilities needed by Apple, but this would take several years.

 

Again, I don't think that Apple was trying to do any harm, and they realized that they couldn't compete on price alone with Amazon and so tried to find another way, and their legal team did a poor job advising the business. At the same time, I think it's a good thing for everyone that they got smacked down here.

post #17 of 21
Quote:
Originally Posted by Drealoth View Post

Consider - imagine that all of the major manufacturers of displays got together and decided that displays will now be sold for $1000 each, making the claim that Apple pushed their profit margin too thin and wanted more breathing room. They wanted to pay their employees more, and pay their suppliers more so that their suppliers get a healthier amount of profit. By your argument, you seem to think this would be okay.

 

 

So Walmart and other retailers are responsible for the price fixing that occurred in the display industry and should also have to pay out the difference?

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post #18 of 21
So, iBooks generally raised the price of eBooks? I was looking for a particular popular novel and found it in iBooks for $8.50. Then I thought I should check for it on Amazon because it was sure to be cheaper after all the fuss of this case. Though, I preferred to get it on iBooks so that it goes right onto my iPad instead of downloading to Mac and getting it in through iTunes. It was $12.50 on Amazon for the Kindle version.

I promptly bought the boxed set of all four novels in the series for $26 on iBooks. The Kindle set is $55.95 on Amazon!

On Amazon, one of the four novels in the set is $19.84 for the Kindle version, while the actual hardback book is on sale for $18.69 (down from $27.00)!
post #19 of 21
Quote:
Originally Posted by krabbelen View Post

So, iBooks generally raised the price of eBooks? I was looking for a particular popular novel and found it in iBooks for $8.50. Then I thought I should check for it on Amazon because it was sure to be cheaper after all the fuss of this case. Though, I preferred to get it on iBooks so that it goes right onto my iPad instead of downloading to Mac and getting it in through iTunes. It was $12.50 on Amazon for the Kindle version.

I promptly bought the boxed set of all four novels in the series for $26 on iBooks. The Kindle set is $55.95 on Amazon!

On Amazon, one of the four novels in the set is $19.84 for the Kindle version, while the actual hardback book is on sale for $18.69 (down from $27.00)!

So it shows Apple competing on price too and not just convenience. Dey don need no stinkin MFN clause.
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post #20 of 21
Quote:
Originally Posted by Gatorguy View Post


So it shows Apple competing on price too and not just convenience. Dey don need no stinkin MFN clause.

Right.

 

Apple must have paid 6.00 - 6.30 (70% of 8.50 or so) in order to sell it at the current 8.50 - 9.00. At first glance it would appear that the publisher sold the book through Apple at MFN terms (though that is now dissolved) in order for Apple to be "competitive" and meet the 9.00 that was apparently the going rate for ebooks set by Amazon. Apparently 9.00 was a common wholesale rate paid by Amazon, and they often sold it at break even or slightly less in order to gain customers and put the competition out of business. But that novel on Amazon isn't 9.00 right now, it's twice the price!

 

So, it might be that the price on iBooks is consistent and predictable, starting at the current price and remaining at the current price, with Apple taking a known cut. While the retail price on Amazon seems to have moved from the 8.50 region to what it is now. 

 

So, both by court verdict now, and according to original MFN clause, the publisher doesn't have to let Apple (continue to) pay $6.00 or $6.30 to retail it at 8.50 when the competition retails it for lots more; but there it is on iBooks at just under 9.00, and we understand Apple gets its 70%. Instead, the book could have retailed on iBooks at 12 (an 8.40/3.60 split) and still beat Amazon's current price (Apparently the publishers would have been happy with Apple's proposed price points and caps at 9, 12, and 15 depending on the novel and its popularity). Since Amazon probably continues to pay no more than the 9.00 wholesale rate (if not less), then Amazon is selling them at a loss or making a 50% - 100% profit on them when it suits them!

 

Therefore, in the absence of much competition and with the verdict against Apple in which Apple and the publishers were slapped down (less competition than ever), Amazon appears to have raised ebook prices significantly (well above Apple's suggestions, in fact). Just as everyone always said -- Amazon as the monopolist is the one to watch out for, not Apple.

post #21 of 21
...or Apple is now using the same wholesale model as Amazon.

...or you chose to use a book example that was never price controlled to begin with.

The prices you're using have never been mentioned with regard to the "best-seller ebooks" agency pricing
Edited by Gatorguy - 9/1/13 at 4:50pm
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