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States want Apple to pay at least $280M in e-books antitrust case, push for $840M - Page 3

post #81 of 132
Quote:
Originally Posted by SpamSandwich View Post
 

 

How about just having it stop saving previous posts and quotations, so when the next time one posts both the old and new text doesn't appear?



Or how about a reference starting the prior statement followed by 3 ellipses being active that has the content collapsed, by default, so if anyone wants to view it they can, within the thread?

post #82 of 132
Quote:
Originally Posted by THT View Post

The question of why Amazon isn't sued for predatory pricing and practices is interesting.

In the Apple v DOJ eBooks trial, the DOJ said they evaluated Amazon's eBooks business and said that Amazon operated it at a profit. When asked to reveal this this information, Judge Denise Cote refused to let these findings out and said to go to the DOJ, the DOJ refused to let these findings out, and both said Amazon is not on trial. On the other hand, Judge Cote believed that Apple VP Eddie Cue and various publisher CEOs and representatives were not credible in their sworn-in, under oath testimony. Huh.

There's no proof whatsoever that Amazon makes any net income on eBooks. Considering the size of Amazon's online retail, ebooks is probably sitting in the 3rd significant digit (hundreds of millions) or maybe 4 significant digit (tens of millions) and easily covered by a rounding of an online retail number. Maybe they really do make a profit, who knows, but the chance to know is basically gone. 

As long as Amazon keeps its financials inside a blackbox, it's probably impossible to figure out how well its businesses are doing and whether this or that part of Amazon makes money? Nobody knows how many Kindles have been sold. Do we even know how many ebooks Amazon have been sold? Not an estimate, but an actual reported number? Then, do we even know what those books cost Amazon?


The law (DOJ) and the courts will be fumbling around for awhile figuring out what all what the digital economy is about. As it stands now, they are applying laws based on physical goods to digital goods which is crazy imo. A lot things technology companies do that they think is perfectly normal may not be right in the physical goods world, but that's what the law is entirely based on.

No one sued them because it was only a small sampling of ebooks that were being sold at a loss, and if the average ebook price came down after Apple entered the market then that means Amazon was selling all other ebooks at a more than healthy profit. You could've reached the same conclusion with a little more thought.
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post #83 of 132
Quote:
Originally Posted by anantksundaram View Post
 

Yeah, the regular, recurrent crashes -- on the iPad, iPhone, and OSX -- must all be just a perception issue.....

 

In short, you're complaining about the interface of the mobile app. That's different than the parsing of the non-mobile UI, though I don't find the present Web UI on a desktop/laptop very functional. The only difference is that it doesn't crash.

 

File some bugs with Huddler.

post #84 of 132
Quote:
Originally Posted by tzeshan View Post


First, then Apple can be sued for the App Store too. 
Second, does Amazon negotiate with the publishers one at a time?  Why is this needed?  For most goods the manufacturers sell to the retailers at a discount to MSRP.  The retailers then set a price to sell.  Apple's model is fundamentally the same as this.  Only that Apple decided to mark up at 30%.  So Apple is not legal.  The DOJ and the judge is all screwed up in their brain.

No Apple can't be sued for the app store, as long as guidelines are followed anyone can make a app and sell for whatever price they choose, plus Apple doesn't stop any dev from developing apps for a competing platform nor does it dictate what price they have to charge.

Negotiating with the publishers one by one would prevent collusion. Apple doesn't add 30%, it takes 30% from whatever price the content provider decided to charge, now if the content provider wants to earn a certain amount they'll increase the price to adjust for Apple's cut.
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post #85 of 132
Is it just me or are there more and more stories about state Attorney General's using Gestapo tactics to squeeze every cent they can all in the name of "Consumer Protection".

The trend is any company/organization making an above average profit are strategic targets. One such snake in the grass is Jack Conway of Kentucky. He goes after for-profit schools without looking at the facts (namely job placement rates). It's sickening the power these AG's are given. Someone must put them in their place.
post #86 of 132
Amazon is the culprit; repeated flooding of the market with products below cost to destroy competitors. THE PROOF- look at independent book and record sellers.

Apple's iBooks was just fine. The customer still had choice.
post #87 of 132
Quote:
Originally Posted by mdriftmeyer View Post
 

File some bugs with Huddler.

Life's too short to be 'filing bugs.' Perhaps you have the time to do stuff like that. Either something works, or it doesn't. 

 

Let's cut this (pointless) conversation.

post #88 of 132

So many legal experts here ...

post #89 of 132
Quote:
Originally Posted by dasanman69 View Post

No one sued them because it was only a small sampling of ebooks that were being sold at a loss, and if the average ebook price came down after Apple entered the market then that means Amazon was selling all other ebooks at a more than healthy profit. You could've reached the same conclusion with a little more thought.

Amazon can remove all doubt by reporting ebook and kindle revenue and profit numbers. As it stands, all we are doing are guessing.

DOJ saying that they are profitable is no better than you saying they are profitable. Show us the numbers.
post #90 of 132
Quote:
Originally Posted by ItsTheInternet View Post

The court addresses both of these in the case. They state that Amazon has consistently run its ebook department at a profit and cheap ebooks were loss leaders. It also clearly states that the appropriate remedy for Apple was not to break the law, and so that excuse can hold no weight whatsoever.

If Apple "broke the law", then where is the criminal case?

Oh yeah, there isn't one because Apple didn't break the law.

The DoJ and that dumb bitch judge are free to press criminal charges where the burden of proof is higher and will reveal the incompetence of their schemes, but they won't.
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post #91 of 132
Quote:
Originally Posted by hill60 View Post


If Apple "broke the law", then where is the criminal case?

Oh yeah, there isn't one because Apple didn't break the law.

The DoJ and that dumb bitch judge are free to press criminal charges where the burden of proof is higher and will reveal the incompetence of their schemes, but they won't.

 

Uh, do you think that civil offences aren't breaking the law? I have no idea what you're talking about here. Also it's like 4am and I am checking my mail before bed so I might be slow to reply.

post #92 of 132
Quote:
Originally Posted by mdriftmeyer View Post

File some bugs with Huddler.

I've been doing that after they dropped vBulletin here. Never get a reply, never see any bugs being ironed out. Things change, but not the stuff that needs addressing. AI knows this.
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post #93 of 132
Quote:
Originally Posted by Ronbo View Post
 

States, looking for money, think they have found some. They hope it can be tripled too. With a side of fries.

 

Yes, but they'd better be careful not to let Tim Cook near the fries...

 

On topic though, I think Thomson just won the thread. Perfectly balanced and calm posts. A joy to read!

post #94 of 132
Quote:
Originally Posted by thompr View Post
 

Most merchants do not attempt to resell items below cost, with the exception of temporary promotions or sales to drive foot traffic (or in the case of online "eye traffic").  Keyword there is temporary, like Cyber-Monday-temporary.  At Amazon, eBooks were on a perpetual Cyber Monday sale. Most companies would go out of business doing that as standard practice.  Although Apple is certainly big enough to, since it makes so much profit elsewhere, it does not play that game, nor should it.  If you have a monopoly in a market, such as eBooks, and your standard pricing is so low that you are losing money just to keep competition away, that is illegal.  Go look it up if you must.

 

Why didn't the publishers sue Amazon?  Well they did complain about Amazon's pricing policies.  But as much as they feared Amazon's power in the eBooks market, they were also dependent on it.  Amazon sells a hell of a lot of books - including physical ones.  So the publishers could grumble, but they were somewhat helpless.

 

Thompson

 

It wasn't up to the publishers to sue Amazon, that's the DoJ's job, and the DoJ went after Apple instead. That's because  they have a hardon against MFN clauses (which aren't illegal). Everyone here assumes Cote's verdict is a done deal, when Apple is appealing. The Supreme Court has pretty much said that price-fixing (in particular vertical price restraints) can be legal to remedy a market failure. Amazon's predatory pricing was a market failure.

post #95 of 132

For Apple, this isn't going to end until they are offered a reasonable resolution by the courts and DOJ. If they don't, it's going to the SCOTUS, and if they lose there, I doubt it's going to end there. Apple's current management will likely have to be replace before they consent. Ie, the gov't will have to destroy Apple as it currently stands today.

 

Just read this article from by Roger Parloff: http://features.blogs.fortune.cnn.com/2014/02/03/apple-asking-appeals-court-to-freeze-monitor/

 

"We now know that neither Bromwich nor Judge Cote saw his mission as narrowly as Apple did. His role, as Judge Cote has since made clear, was not merely to ensure that Apple's compliance programs were adequate "in the abstract," but that they were adequate "for Apple." This distinction was important in Judge Cote's mind because of her underlying belief, based on her trial findings, that Apple's culture was peculiarly indifferent to, if not contemptuous of, the antitrust laws. Thus, the goal, in her mind, was to reform Apple's culture, not merely to draw up new guidelines.

 

Bromwich knew from his private interviews with Judge Cote for the job what she envisioned. To perform his obligations as he understood them, he needed to "crawl into [the] company" and explore its "tone" and "culture," as he later informed stunned Apple representatives.

Accordingly, when Bromwich met with Apple for the first time on Oct. 22, he explained that he wanted eventually to meet with every member of Apple's executive team and board, some of them multiple times. He wanted to start in mid-November with 15 top officials, including CEO Tim Cook, senior vice president for worldwide marketing Phillip Schiller, legendary product designer Jony Ive, and board member and former U.S. vice president Al Gore, Jr."

post #96 of 132
Quote:
Originally Posted by THT View Post
 

For Apple, this isn't going to end until they are offered a reasonable resolution by the courts and DOJ. If they don't, it's going to the SCOTUS, and if they lose there, I doubt it's going to end there. Apple's current management will likely have to be replace before they consent. Ie, the gov't will have to destroy Apple as it currently stands today.

 

Just read this article from by Roger Parloff: http://features.blogs.fortune.cnn.com/2014/02/03/apple-asking-appeals-court-to-freeze-monitor/

 

"We now know that neither Bromwich nor Judge Cote saw his mission as narrowly as Apple did. His role, as Judge Cote has since made clear, was not merely to ensure that Apple's compliance programs were adequate "in the abstract," but that they were adequate "for Apple." This distinction was important in Judge Cote's mind because of her underlying belief, based on her trial findings, that Apple's culture was peculiarly indifferent to, if not contemptuous of, the antitrust laws. Thus, the goal, in her mind, was to reform Apple's culture, not merely to draw up new guidelines.

 

Bromwich knew from his private interviews with Judge Cote for the job what she envisioned. To perform his obligations as he understood them, he needed to "crawl into [the] company" and explore its "tone" and "culture," as he later informed stunned Apple representatives.

Accordingly, when Bromwich met with Apple for the first time on Oct. 22, he explained that he wanted eventually to meet with every member of Apple's executive team and board, some of them multiple times. He wanted to start in mid-November with 15 top officials, including CEO Tim Cook, senior vice president for worldwide marketing Phillip Schiller, legendary product designer Jony Ive, and board member and former U.S. vice president Al Gore, Jr."


Wow!  This reads very much like an order form the North Korean leader. 

post #97 of 132
Quote:
Originally Posted by THT View Post

For Apple, this isn't going to end until they are offered a reasonable resolution by the courts and DOJ. If they don't, it's going to the SCOTUS, and if they lose there, I doubt it's going to end there. Apple's current management will likely have to be replace before they consent. Ie, the gov't will have to destroy Apple as it currently stands today.

 

Just read this article from by Roger Parloff: http://features.blogs.fortune.cnn.com/2014/02/03/apple-asking-appeals-court-to-freeze-monitor/

 

"We now know that neither Bromwich nor Judge Cote saw his mission as narrowly as Apple did. His role, as Judge Cote has since made clear, was not merely to ensure that Apple's compliance programs were adequate "in the abstract," but that they were adequate "for Apple." This distinction was important in Judge Cote's mind because of her underlying belief, based on her trial findings, that Apple's culture was peculiarly indifferent to, if not contemptuous of, the antitrust laws. Thus, the goal, in her mind, was to reform Apple's culture, not merely to draw up new guidelines.

 

Bromwich knew from his private interviews with Judge Cote for the job what she envisioned. To perform his obligations as he understood them, he needed to "crawl into [the] company" and explore its "tone" and "culture," as he later informed stunned Apple representatives.

Accordingly, when Bromwich met with Apple for the first time on Oct. 22, he explained that he wanted eventually to meet with every member of Apple's executive team and board, some of them multiple times. He wanted to start in mid-November with 15 top officials, including CEO Tim Cook, senior vice president for worldwide marketing Phillip Schiller, legendary product designer Jony Ive, and board member and former U.S. vice president Al Gore, Jr."

if it goes all the way to the supreme court and they give a verdict upholding the original verdict, excuse my ignorance of the US judical system, how can they continue? Unless there is a supreme supreme court? Lol. Or is it a presidential pardon the next objective.

Either way some solicitors will be getting very rich by the time this ends.
post #98 of 132
Quote:
Originally Posted by singularity View Post

if it goes all the way to the supreme court and they give a verdict upholding the original verdict, excuse my ignorance of the US judical system, how can they continue? Unless there is a supreme supreme court? Lol. Or is it a presidential pardon the next objective.

Either way some solicitors will be getting very rich by the time this ends.

 

How can Apple continue? They will have to bend over and take it, or find directors and managers that will. The fines will go up rather rapidly if they continue to stonewall.

 

But yes, American politics at this scale is cyclical and changes with who's in the gov't. Maybe the next DOJ after Obama's will have different priorities. After all, this is the DOJ who reasoned that the companies and banks involved in the subprime mortgage crisis of 2008 - you know the crisis that cost trillions of dollars, left millions of people unemployed or homeless - were too big to prosecute and may harm the world. Just thinking about makes the bile rise. Instead, they are very proud of this e-books prosecution, which is what, 4 orders of magnitude smaller than the subprime mortgage crisis in terms of how it affects USA citizens.

post #99 of 132

Cote is ideologically aligned with the DoJ, and the DoJ is in opposition to the Supreme Court's controversial but landmark decision in 2008 in Leegin v PSKS, which overturned 100 years of antitrust precedent which had said that price-fixing is ALWAYS illegal. Leegin changed that, making a distinction between horizontal price fixing and vertical. Horizontal is when a group of competitors collude to fix prices (like ebook publishers), but it's much more complicated when the price fixing is vertical with 2 ends of the market involved and not just 1. In some cases (eg: Leegin telling its retailers they can't discount prices) there are both pro and anti-competitive effects to price fixing, consumers may have to pay more for one brand but fixing high prices for one brand actually increases competition between brands and in the long run that's better than saying Leegin can't fix prices for their own products. This case here isn't just about the competition between suppliers (ebook publishers) being anticompetitive, it's about retailers too, and about fair competition among the ebook retailers (eg: Apple, Amazon, Sony, B&N, etc.). Antitrust law simply is not supposed to prop up monopolies.

 

Cote has cleverly dismissed the pro-competitive effects of the agency model on the ebook market (which broke Amazon's monopoly and made it easier for others to enter the market) by calling Apple a horizontal co-conspirator—dismissing and ignoring that the more important competition here is taking place vertically between the retailers. In doing so she glosses over that her and the DoJ's crusade against the new interpretation of antitrust laws have effectively been about restoring Amazon's monopoly position in the ebook market, and made it harder for new retail competition to enter the ebook market. It ignores that correcting a market failure (Amazon's unregulated monopoly) is good for competition. 

 

This is all not lost among antitrust regulators, politicians, jurists, economists and other antitrust watchers. Many of whom think Cote's decision a travesty. It certainly won't be lost on the Supreme Court whose recent rulings are being dismissed by a trial court judge and a zealous DoJ. Leegin was a 5-4 decision. It's hard to know where the appellate judges go. This will be a case that either reaffirms Leegin (by reversing Judge Cote's decision), or makes an exception to it.


Edited by ruddy - 2/4/14 at 10:22am
post #100 of 132
Quote:
Originally Posted by ruddy View Post
Cote has cleverly dismissed the pro-competitive effects of the agency model on the ebook market (which broke Amazon's monopoly and made it easier for others to enter the market)

 

Could you explain how restricting price competition can make it easier for others to enter the market. If they are restrained from offering lower prices, then how do they gain market share without (for example) a huge selling tablet product that comes with their book store?

 

 

Surely what the ebook agreements did was make it easier for Apple to enter the market, and they did so in an anticompetitive fashion.

post #101 of 132

For anyone to enter the ebook market and go up against a dominant monopoly that artificially priced bestsellers at break-even or below-cost, they would have to be brain dead. Why enter a market where you can't make any money? This exclusion of new competitors from entering a market is exactly where the term anticompetitive comes from. The only players in the ebook market were those who had already been there since before Amazon cornered it. Barnes and Noble, Sony, and a few others were collectively down to 10 or 15%. That changed when the publishers forced Amazon to source ebooks using the agency model. It fixed prices yes, but it leveled the playing field among _all_ ebook retailers. Since nobody could compete on price, nobody could compete on price unfairly as Amazon had been doing.

 

The result was _more_ competitors entered the ebook market once making a profit became possible. There was also a radical increase in ebook production and sales and the number of titles being offered. Many would argue that would have happened anyway under Amazon's unchallenged monopoly, it was a young and exploding market, but even so, the effect remains that after the vertical price restraints of the agency model, both the number of competitors in the market increased, and the number and availability of ebooks radically exploded. 

 

Increased competition and increased production are both pro-competitive effects that historically carry more weight than fixed prices. The Supreme Court, in its interpretation of the Sherman Antitrust Act, says both anticompetitive and procompetitive effects of any vertical price fixing scheme must be rigorously measured and weighed against the anti-competitive effect of higher prices. That's what Cote avoided doing.

post #102 of 132
Quote:
Originally Posted by ruddy View Post

For anyone to enter the ebook market and go up against a dominant monopoly.....

Now they'll go up against a dominant duopoly that they can't compete with on price.
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post #103 of 132
Quote:
Originally Posted by ruddy View Post
 

For anyone to enter the ebook market and go up against a dominant monopoly that artificially priced bestsellers at break-even or below-cost, they would have to be brain dead. Why enter a market where you can't make any money?

 

By this argument you paint all loss-leader tactics as illegal, but in reality they are not illegal. Lower prices for the consumer is exactly the point of competition so while sellers might be getting a rougher deal because Amazon is willing to make almost no money, consumers got a great deal.

 

Apple could easily have entered the market, used their insane profit margin from elsewhere to offer identical deals to Amazon. That would result in them losing money on books though but would have no major effect on their business.

 

Quote:
That changed when the publishers forced Amazon to source ebooks using the agency model. It fixed prices yes, but it leveled the playing field among _all_ ebook retailers. Since nobody could compete on price, nobody could compete on price unfairly as Amazon had been doing.

 

Sorry, since when do you get to decide what price is fair? "Nobody could compete on price" is what you said, and that is the absolute benchmark for an illegal collaboration. How is it remotely fair to raise the prices of ebooks and prohibit them being sold for cheaper? It costs the consumer more and eliminates competition in the market.


 

Quote:

The result was _more_ competitors entered the ebook market once making a profit became possible. There was also a radical increase in ebook production and sales and the number of titles being offered. Many would argue that would have happened anyway under Amazon's unchallenged monopoly, it was a young and exploding market, but even so, the effect remains that after the vertical price restraints of the agency model, both the number of competitors in the market increased, and the number and availability of ebooks radically exploded. 

 

 

How can more competitors be in the market when you have already said price competition was no longer possible. You are being incredibly dishonest here and have presented 0 facts to back your argument. You are just typing out a paragraph of fantasy.

 

Quote:
Increased competition and increased production are both pro-competitive effects that historically carry more weight than fixed prices. The Supreme Court, in its interpretation of the Sherman Antitrust Act, says both anticompetitive and procompetitive effects of any vertical price fixing scheme must be rigorously measured and weighed against the anti-competitive effect of higher prices. That's what Cote avoided doing.

 

Because Cote ruled against the horizontal conspiracy, not vertical price fixing. Amazon's weight as a seller prevented publishers enforcing vertical price fixing agreements, and so they didn't need to be assessed.

 

Provide some evidence. Even Apple submitted documents showing the price of the collaborating publishers jumped ridiculously. Tell me how 'competitors' can exist when price competition has been outlawed. It seems to me that you're absolutely fine with Apple using their iPad popularity to try and crush Amazon's Kindle Fire even if it costs consumers millions in increased ebook prices and destroys any real competition in the market. I am not.

post #104 of 132
Quote:
Originally Posted by mdriftmeyer View Post



Or how about a reference starting the prior statement followed by 3 ellipses being active that has the content collapsed, by default, so if anyone wants to view it they can, within the thread?

Nice suggestion.

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post #105 of 132
Quote:
 By this argument you paint all loss-leader tactics as illegal, but in reality they are not illegal.

In most cases loss leading is not illegal. However, loss leading by a monopoly player most certainly is illegal.

 

Quote:
 

Apple could easily have entered the market, used their insane profit margin from elsewhere to offer identical deals to Amazon. That would result in them losing money on books though but would have no major effect on their business.

Yup, brain dead. Just as easily Amazon could simply give away their entire inventory. Doesn't make it a sensible business strategy. 

 

Quote:
How can more competitors be in the market when you have already said price competition was no longer possible. You are being incredibly dishonest here and have presented 0 facts to back your argument. You are just typing out a paragraph of fantasy. 

The plain fact is more competitors entered the market after the shift to agency and the number of ebook titles being published exploded. You could look it up in the trial evidence. 

 

It might help you to understand that price is not the only factor by which competitors compete.

post #106 of 132
Quote:
Originally Posted by ruddy View Post
 

In most cases loss leading is not illegal. However, loss leading by a monopoly player most certainly is illegal.

Is it? Can you cite that please?

 

Quote:
Just as easily Amazon could simply give away their entire inventory. Doesn't mean it's a smart business strategy.

Neither is breaking antitrust law. The fact of the matter though is that Apple had the capability of entering this market, but they did not like the terms.

 

Quote:
The plain fact is more competitors entered the market after the shift to agency and the number of ebook titles being published exploded. You could look it up in the trial evidence. 

I could, if you cited what exactly you're talking about.

 

Quote:
It might help you to understand that price is not the only factor by which competitors compete.

That doesn't mean that eliminating price competition is not illegal. It is, for good reason. In fact trial evidence showed that the volume of sales went down after the change:

Quote:
 Amazon concluded that “[c]ompared to the 3 agency
publishers -- Harper, Hachette and Penguin, who had overall
kindle book units decline in Q2 compared to Q1, Random House had
an increase of 41%.”

(Page 98 of the trial order)

post #107 of 132

I think the primary problem with the ebooks lawsuit is that the DOJ and Judge Cote was thinking of them like they were physical books. Apple and the publishers were also prosecuted for quite narrow price fixing (new best selling books) to boot as the average selling price across all books declined. I'd be more apt to back the DOJ if it was over physical books sold in retail shops.

 

Obviously they are not physical books. They are a digital good, not only that, they are currently a digital good with DRM that seems very dependent on a certain kind of hardware (tablet) to be successful.

 

 

The ebook market today doesn't really exist without the players that can display the ebook. ebooks basically failed to become viable until tablets (Kindles) became a reality. So, the addressable market appears to be sized to the number of tablets in the market, not to the number of desktop or laptop computers out there. With Apple's iPad, it increased the addressable market for ebooks, what, 10 times? How many Kindles were sold in 2009? 1m, 5m?

 

Apple sold 15m iPads in 2010, 40m in 2011 and 66m 2012. Not only that, Apple made the prototypical tablet for all other OEMs to design from, and those tablets sold in as significant numbers and for much cheaper than the iPad. Amazon responded to Apple's design by taking Blackberry's Playbook and rebadging it as a Kindle Fire 18 months after iPad 1 went for sale. The Kindle Fire [HD/HDX], an iPad form factor device not a Kindle eInk device, is the flagship Kindle today. Is that not the very definition of pro-competitive?

 

With lots of tablets in the market, there was a large market to sell digital goods to, a large market for ebooks. This means more competition. New retailers can arise. Publishers can become retailers. The retailer can be the publisher. Self-publishing becomes viable. Mass market ebook and niche ebook retailers can co-exist. That's a gigantic boon. A huge economic benefit for consumers and sellers a like. The very definition of pro-competitive. If Judge Cote and the DOJ wanted the ebook market to return to what it was like in late 2009, well, wasn't the proper solution for that to have Apple remove ebook functionality from the iPad. It was after all basically an afterthought for the device they developed in about 3 months just prior to launch. How about ebooks should only be sold on eInk tablets like the Kindle or the Nook or the Kobo readers? That was the state of the ebook market in 2009.

 

Secondly, yes, Apple enabled publishers to raise popular books (generally of the novel and hardcover style book, not text books, not books with color, etc), but these ebooks were still subject to price-demand curves. An ebook has "infinite" supply. Demand was low and will be continue to be low for ebooks relative to apps, music, videos, web browsing and games. People don't have to buy an ebook at the publisher's price, and they have a lot of other options, especially in the LCD tablet market. The price was going to go down.

post #108 of 132
Quote:
Originally Posted by THT View Post
 

Apple sold 15m iPads in 2010, 40m in 2011 and 66m 2012. Not only that, Apple made the prototypical tablet for all other OEMs to design from, and those tablets sold in as significant numbers and for much cheaper than the iPad. Amazon responded to Apple's design by taking Blackberry's Playbook and rebadging it as a Kindle Fire 18 months after iPad 1 went for sale. The Kindle Fire [HD/HDX], an iPad form factor device not a Kindle eInk device, is the flagship Kindle today. Is that not the very definition of pro-competitive?

Apple were not punished for selling the iPad. The iPad did not require a price fixing conspiracy in order to sell well. It was an additional feature that was prized but non essential.

 

 

Quote:
With lots of tablets in the market, there was a large market to sell digital goods to, a large market for ebooks. This means more competition. New retailers can arise. Publishers can become retailers. The retailer can be the publisher. Self-publishing becomes viable. Mass market ebook and niche ebook retailers can co-exist. That's a gigantic boon. A huge economic benefit for consumers and sellers a like. The very definition of pro-competitive. If Judge Cote and the DOJ wanted the ebook market to return to what it was like in late 2009, well, wasn't the proper solution for that to have Apple remove ebook functionality from the iPad.

 

Right, they don't want to do that, that's why they have not banned the iPad or similar. They took action over a completely different factor.


 

Quote:

Secondly, yes, Apple enabled publishers to raise popular books (generally of the novel and hardcover style book, not text books, not books with color, etc), but these ebooks were still subject to price-demand curves. An ebook has "infinite" supply. Demand was low and will be continue to be low for ebooks relative to apps, music, videos, web browsing and games. People don't have to buy an ebook at the publisher's price, and they have a lot of other options, especially in the LCD tablet market. The price was going to go down.

 

The point of this agreement was to eliminate those options. That is what Apple is being punished with. The publishers collaborated with Apple exactly to stop the price going down. They were willing to accept lower sales if they could restrict trade under $12.99 or so.

post #109 of 132
Quote:
Quote:
Originally Posted by ruddy View Post
 

In most cases loss leading is not illegal. However, loss leading by a monopoly player most certainly is illegal.

Is it? Can you cite that please?

 

Here you go

Quote:

Neither is breaking antitrust law. The fact of the matter though is that Apple had the capability of entering this market, but they did not like the terms. 

They had the same capability of everyone else who chose not to act in a brain dead fashion.

 

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 I could, if you cited what exactly you're talking about

I was talking about the evidence and testimony Apple presented during the trial and summed up in this slide which Judge Cote summarily dismissed or ignored in her decision.

 

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 That doesn't mean that eliminating price competition is not illegal. It is, for good reason.

You really need to get with the program.  Price fixing is no longer always illegal, for good reason. Read the Leegin decision and if Justice Kennedy's language is too difficult, there are plenty of discussions elsewhere why Leegin means price-fixing in many cases is now perfectly legal. 

post #110 of 132
Quote:
Originally Posted by ruddy View Post

Here you go
They had the same capability of everyone else who chose not to act in a brain dead fashion.

I was talking about the evidence and testimony Apple presented during the trial and summed up in this slide which Judge Cote summarily dismissed or ignored in her decision.

You really need to get with the program.  Price fixing is no longer always illegal, for good reason. Read the Leegin decision and if Justice Kennedy's language is too difficult, there are plenty of discussions elsewhere why Leegin means price-fixing in many cases is now perfectly legal. 

Your proof is contradictory. On one hand you claim 'predatory pricing' kept competitors out, but then you show that prices went down after competition increased. I don't know about your math but in mine both can't exist.
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post #111 of 132
Quote:
Originally Posted by ruddy View Post

In most cases loss leading is not illegal. However, loss leading by a monopoly player most certainly is illegal.

Quote:
Originally Posted by ItsTheInternet View Post

Is it? Can you cite that please?

Ruddy, the wiki link you cited doesn't say predatory pricing is always illegal, even if that company holds a monopoly position. There's a number of qualifications.

A word of advice. AI members are a tough audience. It's rare for someone to sneak a questionable statement by without challenge. If you're going to link something as objective proof for what you've said make sure it really support you. I believe members here are smarter than the average blogger. And nope, no cite for it. 1wink.gif
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post #112 of 132
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Originally Posted by ruddy View Post
 

Here you go.

This is not a citation of any law, you're quoting Wikipedia rather than any particular decision. Please provide a real citation if you want to discuss this.

 

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I was talking about the evidence and testimony Apple presented during the trial and summed up in this slide which Judge Cote summarily dismissed or ignored in her decision.

 

This is a slide from Apple's opening argument. They abandoned this line of argument because horizontal conspiracies are not judged by the "rule of reason" as I understand it, but are per-se illegal. Do you have any actual link to their arguments? Or just a screenshot from a blog?

 

Quote:
You really need to get with the program.  Price fixing is no longer always illegal, for good reason. Read the Leegin decision and if Justice Kennedy's language is too difficult, there are plenty of discussions elsewhere why Leegin means price-fixing in many cases is now perfectly legal. 

None of these are relevant to a horizontal conspiracy between a majority of a market. That's exactly what happened here.

post #113 of 132
Quote:
Originally Posted by dasanman69 View Post


Your proof is contradictory. On one hand you claim 'predatory pricing' kept competitors out, but then you show that prices went down after competition increased. I don't know about your math but in mine both can't exist.

It may help you to understand one thing happened before the Agency model, the other happened after. So of course both can exist. 

post #114 of 132
Quote:
Originally Posted by ruddy View Post

It may help you to understand one thing happened before the Agency model, the other happened after. So of course both can exist. 

It certainly looks like something bad happened, not good.
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"I got the answer by talking in my brain and I agreed of the answer my brain got" a 7 yr old explaining his math HW
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post #115 of 132
Quote:
Originally Posted by ItsTheInternet View Post
 

Apple were not punished for selling the iPad. The iPad did not require a price fixing conspiracy in order to sell well. It was an additional feature that was prized but non essential.

...

The point of this agreement was to eliminate those options. That is what Apple is being punished with. The publishers collaborated with Apple exactly to stop the price going down. They were willing to accept lower sales if they could restrict trade under $12.99 or so.

 

Who the heck was talking about being punished for selling the iPad? My comment was regarding the pro-competitive effects of the iPad on the ebook market. The pro-competitive arguments that Judge Cote ignored or didn't believe. The iPad and its form factor clones increased the size of the ebook market ~10x over what Amazon, Kobo, or BN did with their readers. With a larger market, more competitors, more boutiques & niches can arise.

 

The agreement between Apple and the publishers shifted price control from retailers to publishers. It didn't do anything to fix prices as the publishers are subject to the same demand v price curve as anyone else. If they wanted to sell more ebooks, the publishers would have to reduce the prices. And they were. And they would have been more accepting to do it since they would be doing it themselves.

 

Self-publishing or indie-publishing would eventually eat their lunch as the barriers involved with selling a book virtually disappears in the digital world. An self-published book from some unheard of author can go from zero sales to 100k sales in couple of months, and all the friction of going through a publisher, printing the book, distributing the book, dealing with inventories of the book disappear. A physical book basically has zero chance of that. And prices went down they did. Prices are definitely, and emotionally, still elastic at $10 levels.

 

For a retailer who has books sitting in warehouse, yes, they do indeed need to have price control. It enables them to better manage their inventory, and can use loss leading techniques to get people into stores. They are taking a lot of risks taking a physical good into their inventory. Why the heck do they need price control for a digital good? There's no inventory to clear. Then, since these are platform specific DRMed files, what the hell are these ebook retailers competing over? If I had a Nook, how does the price of a Kindle book affect me? What about vice versa? How would I read Nook books on a Kindle? If I wanted to take advantage of cheap ebooks that retailers have price competition over, I would need to buy 3 or 4 ereaders? 

 

Hmm, think about the digital music or MP3 stores. A little perusal of Amazon's MP3 store has singles at 0.69, 0.99 and 1.29. The same for Apples iTunes stores. Holy cow! I don't see any songs for 0.49 or 0.29 or 0.19? And all the new and best sellers are at 1.29! The two major emusic retailers aren't competing. They aren't competing on price! This is Amazon right, they should be able to sell these singles for whatever they want, right? Looks like someone is price fixing there!

post #116 of 132
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 Ruddy, the wiki link you cited doesn't say predatory pricing is always illegal, even if that company holds a monopoly position. There's a number of qualifications

First of all I never said predatory pricing is _always_ illegal. I said it is illegal for those with monopoly power. I concede that predatory pricing is difficult to prove, and I agree Wikipedia isn't perfect, so here's an example of Wal-Mart being found liable of it, as well as direct you to the language from the US Code that makes it unlawful, see 15 USC § 13 (a), especially where it says:

Quote:
where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them

Of course each state in the US also has similar antitrust statutes and case law which makes predatory pricing illegal for competitors with monopoly power in the relevant market.

post #117 of 132
Quote:
Originally Posted by THT View Post
 

 

Who the heck was talking about being punished for selling the iPad? My comment was regarding the pro-competitive effects of the iPad on the ebook market. The pro-competitive arguments that Judge Cote ignored or didn't believe. The iPad and its form factor clones increased the size of the ebook market ~10x over what Amazon, Kobo, or BN did with their readers. With a larger market, more competitors, more boutiques & niches can arise.

You are confused. You are extolling the virtues of the iPad for the ebook market, but the iPad does not require Apple to be involved in price fixing. If they had released it with support for epub/mobi it would have had the exact same effect even without an iBookStore. You cannot tie the introduction of the iPad intrinsically to a price fixing conspiracy.

 

 

Quote:
The agreement between Apple and the publishers shifted price control from retailers to publishers. It didn't do anything to fix prices as the publishers are subject to the same demand v price curve as anyone else. If they wanted to sell more ebooks, the publishers would have to reduce the prices. And they were. And they would have been more accepting to do it since they would be doing it themselves.

The agreement between Apple and the publishers facilitated the publishers strongarming Amazon and Google etc into this new agreement. This did indeed fix prices at specific brackets: http://www.justice.gov/atr/cases/apple/exhibits/px-0034.pdf

 

Quote:
Self-publishing or indie-publishing would eventually eat their lunch as the barriers involved with selling a book virtually disappears in the digital world. An self-published book from some unheard of author can go from zero sales to 100k sales in couple of months, and all the friction of going through a publisher, printing the book, distributing the book, dealing with inventories of the book disappear.

This has absolutely nothing to do with a price fixing conspiracy case.

 

Quote:
Hmm, think about the digital music or MP3 stores. A little perusal of Amazon's MP3 store has singles at 0.69, 0.99 and 1.29. The same for Apples iTunes stores. Holy cow! I don't see any songs for 0.49 or 0.29 or 0.19? And all the new and best sellers are at 1.29! The two major emusic retailers aren't competing. They aren't competing on price! This is Amazon right, they should be able to sell these singles for whatever they want, right? Looks like someone is price fixing there!

What does this have to do with anything? It seems to me you're simply typing as much as you can in an attempt to muddy the waters. The facts are really very clear though.

post #118 of 132
Quote:
Originally Posted by ruddy View Post
 

First of all I never said predatory pricing is _always_ illegal. I said it is illegal for those with monopoly power. I concede that predatory pricing is difficult to prove, and I agree Wikipedia isn't perfect, so here's an example of Wal-Mart being found liable of it, as well as direct you to the language from the US Code that makes it unlawful, see 15 USC § 13 (a), especially where it says:

Of course each state in the US also has similar antitrust statutes and case law which makes predatory pricing illegal for competitors with monopoly power in the relevant market.

 

Lets assume for the moment that Amazon's pricing is illegal. Can you show me how participating / falicitating an illegal price fixing conspiracy is a lawful remedy? Of course you can't, because even if Amazon's conduct is illegal, Apple's response should have been to file a complaint, not to break the law themselves. Do you deny that?

post #119 of 132
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Originally Posted by ItsTheInternet View Post
 

What does this have to do with anything? It seems to me you're simply typing as much as you can in an attempt to muddy the waters. The facts are really very clear though.

 

My argument would be that the DOJ has no business bringing up this case. The interpretation of the laws by which they prosecuted this case doesn't apply and shouldn't apply. Ie, a retailer selling a physical good is not the same thing as a retailer selling a digital good, a paper book is not the same thing as an ebook.

 

 

In other words, yes, prices did rise. But it's all part of the markets going through transition and the gov't should not mess around with it. The iPad was instrumental for this transition. It's had pro-competitive effect. It would have turned out fine. Now, it's just fubar-ed.

 

If the gov't wanted to do something, it would be to mandate a common DRM system so that it levels the field for the players. But the gov't has already answered this and are fine with closed formats, so they are not going to do it.

post #120 of 132
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They abandoned this line of argument because horizontal conspiracies are not judged by the "rule of reason" as I understand it, but are per-se illegal. Do you have any actual link to their arguments? Or just a screenshot from a blog? 

You understand wrong. In fact it appears that now you are simply making up your own information to suit your preconceived conclusion, something that doesn't win you any credibility points. Apple never abandoned its defense, but presented the pro-competitive effects of the shift to agency to the court with exhibits, witnesses, expert testimony, and they closed their arguments with no change or backpedaling. Judge Cote did not rule on the per se vs rule of reason standard until after the trial was over. The first anyone knew of it was when her decision was published.

 

Per se illegality is by far the weakest link in her ruling, and since she used the wrong standard, an Appellate or the Supreme Court can easily toss _all_ her findings of fact and _all_ her findings of law right out the window, to review the trial de novo. She's ignored all the Supreme Court's many cautions not to use the per se standard in situations like this (for one thing they prohibit it outright in cases involving new markets the courts have no experience with) and she deliberately ignores the language in Leegin that explictly directs her to use the rule of reason standard in any case with any verticality. 

 

Apple's agreements with the publisher are _not_ as if Apple were another publisher. That would be a horizontal agreement. They are vertical agreements between publisher and retailer, between two levels of competition in the ebook market. Even if the effect of those agreements is that Apple facilitated a horizontal conspiracy, the agreements themselves are still vertical price restraints, and Leegin explicitly requires the rule of reason be used for those. This excuse to make an exception to use per se, instead of the default rule of reason, allows Cote to pretend that competition among the retailers, B&N, Amazon, Sony, etc. need not be considered and was not affected, which is baloney considering how much change there was in competition on that level. It isn't a sustainable argument. 

 

I'm confident per se illegality will be tossed on appeal, and someone is going to have to review the trial de novo. That sounds like a big deal, and it is, but it's not at all unusual for antitrust law. Either the Appeals Court will reverse the trial court's decision and review it themselves under the rule of reason, or they will remand it back to Cote for her to review under the rule of reason. 

 

Getting judged by the right standard doesn't guarantee Apple can win, but it gives them a chance.

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