Originally Posted by TBell
But it is interesting that you have no problem with Amazon trying to artificially lower the price of e-books by forcing publishers to do away with their traditional tiered release schedules by using its monopoly position to make the publishers release both hardcover and e-books at the same time while significantly undercutting the price of hardcover books. In the short term, that might benefit consumers, but in the long term it hurts consumers, as well as the competition. Surely, you have to agree that Amazon, not Apple, is the big gorilla on the block when it comes to book sales. Apple had no power to dictate terms to publishers that they did not thmeselves want. That, however, is what anti-trust is all about.
Lowering prices is how the Free Market works. Company A offers a product at a price. If Company B wants to compete, they either find a way to lower the price or offer more value at the same price. If they offer the same value at a higher price, then that's not competitive, and Company B should not be expected to gain market share.
Selling a loss leader for below or at cost is a legitimate strategy. Grocery stores do this all the time. So do many other retailers. That's just normal good business.
There is also the illegal practice known as dumping where a large company sells most of its products below cost to drive a competitor out of business. They are similar in that both are below cost, but is a monopolistic practice, the other is not; it's primarily a matter of what percentage of sales are below cost.
Has Amazon sold e-books below cost? Absolutely. Do they sell even 1% of e-books below cost? Apparently not the books I want to buy.
But let's say that they are engaging in dumping. That's an illegal activity. In that case, Amazon should be punished by the government for their crime. That does not justify someone else committing a crime, even if Amazon is getting away with it.
Apple has rarely been the first into a market segment. There were a lot of hobby computer companies around before Apple was founded. When Apple released the Apple II, they essentially created the personal computer market because no one else had found the right combination of tech plus mainstream appeal. Even though Microsoft eventually monopolized the market, Apple successfully competed and pushed the market forward, always ready to eat Microsoft's lunch if (when) they floundered.
They did the same thing with tablets. There were a bunch of companies floundering around with tablets until Apple figured out how to do it right. As a result, they quickly dominated (monopolized) the market. They still make the most money, and still powerful in unit sales because (IMHO) they make the best tablets. They earned their market position. But the Nexus is carving out a chunk of the market because they're willing to play the game and compete.
The same goes with cell phones. Apple didn't create the cell phone market. Heck, they didn't even create the smart phone market. But they were the first ones to really do it right. And now they're dominating. But they can't rest on their laurels because there are other companies who are competing.
In all these cases, we are better off because companies are competing for our business. Prices are lower, features are more advanced yet easier to use, and choices are practically overwhelming.
The same is true of the e-book market. There were abortive attempts to create a viable e-book market for years before Amazon got involved. The mobi format was developed for the MobiPocket device, which didn't take off. Sony had several e-readers out. There was software for devices like the Palm. None of these attempts really succeeded because they were clumsy and difficult to use. I certainly didn't want to use them. But Amazon finally put all the pieces together in a fashion that worked. Just like Apple in those other markets (including iTunes Music), they took a nascent market and made it viable, and reaped the rewards as a result.
If Amazon is acting illegally to maintain their position, then they should be punished by the government. But to punish consumers like you and me in an attempt to enter the market without being competitive is just plain wrong.
Short version: If Amazon is doing something illegal, punish them. Don't excuse other illegal actions.