"On June 28, 2007, the Supreme Court overruled Dr. Miles, discussed below, holding that such vertical price restraints as Minimum Advertised Pricing are not per se unlawful but, rather, must be judged under the "rule of reason." Leegin Creative Leather Products, Inc. v. PSKS, Inc., Slip Op. No. 06?480 (Decided June 28, 2007).[2] This marked a dramatic shift on how attorneys and enforcement agencies address approach the legality of contractual minimum prices, and essentially allowed the reestablishment of resale price maintenance in the United States in most (but not all) commercial situations.
...
n 1980, the U.S. Supreme Court held that the repeal of Miller-Tydings implied that the Sherman Act's complete ban of vertical price fixing was again effective, and that even the 21st Amendment could not shield California's liquor resale price maintenance regime from the reach of the Sherman Act. California Liquor Dealers v. Midcal Aluminum, 445 U.S. 97 (1980). Thus, from the 1975 enactment of the Consumer Goods Pricing Act to the 2008 Leegin decision, resale price maintenance was again no longer legal in the United States."
So the Supreme Court agrees with me. It's NOT ILLEGAL. What they said is that if the accused did something ELSE wrong, they could still be charged. Thanks for proving that I was right.
Given that we agree on the concepts, any disagreement is related only to terminology, and so can be overlooked.
Fair enough. I realize this monopoly vs. market power thing can become pedantic. The only time it really begs for clarification is when someone uses the argument that Company X can't have a monopoly because consumers still have a choice, so the government should leave the company alone. We hear that a lot, actually.
Really? Lemme see: DOJ, anti-trust, using dominance to dictate terms... No, you're right, totally non-analogous.
Sorry, you have not quite made your point. While sarcasm is sometimes an added cherry on top of a well-made cake that is a cogent argument, it isn't so in your case. Here's a tip: Answer the question, explain your analogy. Save the sarcasm for later.
Just because two things have similar ingredients, that does not make them the same.
They are a retailing giant and hey are 3rd in the total music sales category with 12% compared to Apple's 28%. But in downloaded music sales, Apple is at ~70% and Amazon, I think, it around 8%, which I think makes them second. Being that distant a 2nd place makes them a small player, in download music sales. Isn't the Zune the #2 PMP and MS a huge company? They are still a small player in the PMP market.
Perhaps looking at only the downloaded music sales is too narrow in scope. But, as it is a large market by itself and is the only growing segment (thanks to Apple) of the music sales market as a whole, it seems appropriate.
So what you're saying is, it is great that Apple pretty much single handedly created (yet another) market but it needs to lend a helping hand to other companies because they aren't good enough to do it themselves?
How anyone can't see that this is a clear attempt by the music companies to play one distributor off another and try and wrest power back in the distribution space (and screw me and the artists in the process with bullshit ways to get my music) is completely beyond my comprehension.
So what you're saying is, it is great that Apple pretty much single handedly created (yet another) market but it needs to lend a helping hand to other companies because they aren't good enough to do it themselves?
Hardly. But creating a successful business within a market doesn't give one the right to do anything you want within that market. The absence of a helping hand doesn't equate to closed fist. Apple negotiating for the best terms for themselves is not the same as negotiating for diminished terms for their competitors.
Quote:
Originally Posted by mobility
How anyone can't see that this is a clear attempt by the music companies to play one distributor off another and try and wrest power back in the distribution space (and screw me and the artists in the process with bullshit ways to get my music) is completely beyond my comprehension.
Which is done all the time. I am sure Apple does it with their partners and suppliers too. That is not a problem (dealing with one hoping to get another to give you a similar or better deal). Subsequently using those relationships to interfere with a competitor's ability to freely negotiate is a very different matter.
A couple simple questions for you. I know you will dodge and try to obfuscate again, but let's try. When MS threatened to withhold marketing dollars from OEMs that placed that shortcut for Netscape on the desktop, was that interfering? The fact that they were a monopoly made it illegal, but without the monopoly would it have been right?
try hard seth, try hard.[/QUOTE]
You don't have to be such a d!ck to try and make your points.
Let's analyze your MS analogy. The players in the PC market are MS (OS, gets paid to provide, also provides OEMs marketing), OEMs, other software companies that write applications for MS Windows. If the OEMs decided not to promote Windows because MS was dicking them around, that would be fair. What's not fair is MS dicking them around.
The players in the music retail business are the musicians, music companies, distribution channel (retail). If the distribution channel does not advertise music that is NOT available to it at the same time as another channel, it really is fair. What's not fair is the music companies dicking them around.
If I have a supermarket and you sell me oranges at a higher price (or don't sell me your choicest oranges), but give the stores in my area the better deal, I'll still be happy to carry your oranges but I'll use my limited space out front to advertise something else. It is a wholly legitimate use of leverage. If I refused to carry your oranges at all, even that move is subject to debate over whether that is illegal.
If MS withheld marketing dollars, that is the equivalent of the music company not promoting the distributor, NOT the other way around. It would be like YOU the star orange grower not promoting my store.
Hardly. But creating a successful business within a market doesn't give one the right to do anything you want within that market. The absence of a helping hand doesn't equate to closed fist. Apple negotiating for the best terms for themselves is not the same as negotiating for diminished terms for their competitors.
Which is done all the time. I am sure Apple does it with their partners and suppliers too. That is not a problem (dealing with one hoping to get another to give you a similar or better deal). Subsequently using those relationships to interfere with a competitor's ability to freely negotiate is a very different matter.
1> Doing whatever you want in that market? Let's look at Ticketmaster for a second. It does whatever it wants and is legal. It constantly works to crush anyone that enters that market. That is the definition of competition. How did Apple negotiate diminished terms for their competitors (Amazon)? Amazon wanted diminished terms for Apple here. Apple simply chose to resist efforts by the music companies to undermine it by using some of the leverage it has against some of the leverage the music companies exerted upon it.
Closed fist is perfectly alright in a competitive market, btw, even though this has nothing to do with Apple trying to directly crush Amazon. Amazon has a similar right to appeal/use whatever leverage it has if the music companies favored Apple with new releases. The fact that Amazon exists and is able to get music is a GREAT example of how the closed fist does not discourage competition. The fact that no one gives a flying **** about Amazon's music is lamentable but you can't argue with what the market has chosen.
2> You make an egregious error in leaping from the statement that Apple uses tactics like playing one partner off another to the fact that what it is now doing interferes with a competitor. The complaint here is from the music companies, not Amazon.
Subsequently using those relationships to interfere with a competitor's ability to freely negotiate is a very different matter.
There you go again, implying that Apple has been "[interfering] with a competitor's ability to freely negotiate". Nothing that's come to light supports this assertion. Sorry, but Apple's refusal to waste marketing dollars on songs the record labels were withholding from them to benefit competitors simply doesn't qualify. If anything, this looks like a blatant and coordinated attempt by the labels to manipulate the retail market.
Let's analyze your MS analogy. The players in the PC market are MS (OS, gets paid to provide, also provides OEMs marketing), OEMs, other software companies that write applications for MS Windows. If the OEMs decided not to promote Windows because MS was dicking them around, that would be fair. What's not fair is MS dicking them around.
Depends on exactly how MS is 'dicking' with them.
Quote:
Originally Posted by mobility
The players in the music retail business are the musicians, music companies, distribution channel (retail). If the distribution channel does not advertise music that is NOT available to it at the same time as another channel, it really is fair.
Right. And so the other party in the distribution channel should demand the same treatment. That would be fair. Demanding that they instead remove themselves from a competitors promos is not the same.
Quote:
Originally Posted by mobility
What's not fair is the music companies dicking them around.
Agreed. Though that is very vague.
Quote:
Originally Posted by mobility
If I have a supermarket and you sell me oranges at a higher price (or don't sell me your choicest oranges), but give the stores in my area the better deal, I'll still be happy to carry your oranges but I'll use my limited space out front to advertise something else. It is a wholly legitimate use of leverage. If I refused to carry your oranges at all, even that move is subject to debate over whether that is illegal.
If the larger supermarket down the street negotiates all of the orange farmers and gets a good deal great. If they use that deal to prevent you from negotiating your own deal with the farmers, saying by removing all their advertising for the oranges, you have just been 'dicked'. The orange farmer wouldn't be willing to poison the good thing they have of selling to to larger supermarket.
There is nothing wrong with your or them negotiating a 'better' deal. There might be something wrong with your competitor telling your common partners how they may deal with you.
Quote:
Originally Posted by mobility
If MS withheld marketing dollars, that is the equivalent of the music company not promoting the distributor, NOT the other way around. It would be like YOU the star orange grower not promoting my store.
Buyers can also be monopolists.
Anyhoo, as I explained, your supermarket analogy can be used to show the buyer (supermarket) side of the equation, if big enough, can also leverage their clout, as it should be. As long as it is leveraged fairly.
As for my harshness with our friend seth. You will see he uses and encourages such posts. I respond to him in the manner which he seems most used to.
There you go again, implying that Apple has been "[interfering] with a competitor's ability to freely negotiate". Nothing that's come to light supports this assertion. Sorry, but Apple's refusal to waste marketing dollars on songs the record labels were withholding from them to benefit competitors simply doesn't qualify. If anything, this looks like a blatant and coordinated attempt by the labels to manipulate the retail market.
If Amazon makes an attractive offer to the labels and it is refused, not on it's own merit but because Apple has 'encouraged' them to reject it, that sounds an awful lot like interfering to me.
1> Doing whatever you want in that market? Let's look at Ticketmaster for a second. It does whatever it wants and is legal. It constantly works to crush anyone that enters that market. That is the definition of competition. How did Apple negotiate diminished terms for their competitors (Amazon)? Amazon wanted diminished terms for Apple here.
And people have been rightful concerned the the actions of Ticketmaster. But the fact that it has gotten away with a lot in no way implies it cannot do something illegal. You aren't honestly arguing that all things are legal in competition, are you?
Amazon didn't diminish Apple's terms at all. They tried to negotiate for better terms. Sort of the point of negotiating. How did Apple negotiate diminished terms for their competitors (Amazon)? Simply. Apparently very simply...by telling their partners not to accept Amazon's offers, in at aleast some cases combined with the threat of removing marketing support.
Quote:
Originally Posted by mobility
Apple simply chose to resist efforts by the music companies to undermine it by using some of the leverage it has against some of the leverage the music companies exerted upon it.
By telling them what terms they could negotiate with Amazon that would meet Apple's approval.
Quote:
Originally Posted by mobility
Closed fist is perfectly alright in a competitive market, btw, even though this has nothing to do with Apple trying to directly crush Amazon. Amazon has a similar right to appeal/use whatever leverage it has if the music companies favored Apple with new releases. The fact that Amazon exists and is able to get music is a GREAT example of how the closed fist does not discourage competition. The fact that no one gives a flying **** about Amazon's music is lamentable but you can't argue with what the market has chosen.
So, Amazon should only be able to make their own deals with the labels that Apple approves of? That is competition?
Quote:
Originally Posted by mobility
2> You make an egregious error in leaping from the statement that Apple uses tactics like playing one partner off another to the fact that what it is now doing interferes with a competitor. The complaint here is from the music companies, not Amazon.
No, I didn't even link the two. Apple and every other company that buys, will play their suppliers to get the best deal possible. The bigger they are, the better the deals they can negotiate. That is competition amongst the suppliers. But for Apple to then influence what deals those same suppliers can accept from a competitor is a completely different circumstance.
If Amazon makes an attractive offer to the labels and it is refused, not on it's own merit but because Apple has 'encouraged' them to reject it, that sounds an awful lot like interfering to me.
If Amazon and the record labels come up with a scheme to promote Amazon as their preferred retailer, but Apple throws a wrench into their plans by refusing to be stupid, that sounds an awful lot like Apple just not being stupid.
If Amazon and the record labels come up with a scheme to promote Amazon as their preferred retailer, but Apple throws a wrench into their plans by refusing to be stupid, that sounds an awful lot like Apple just not being stupid.
Not being stupid doesn't mean rules don't apply.
I've asked this before, but no one has answered. When Walmart was still the dominant retailer of all music in the US and the iTunes store was much smaller, if Walmart had threatened to pull marketing support from labels that signed deals with Apple with terms that were not in Walmart's interests, would that have been kosher?
So the Supreme Court agrees with me. It's NOT ILLEGAL. What they said is that if the accused did something ELSE wrong, they could still be charged. Thanks for proving that I was right.
You might want to reread what I responded to. The quoted passages clearly do not agree with what you had said.
I'm done with the side-topic of retail price maintenance.
I've asked this before, but no one has answered. When Walmart was still the dominant retailer of all music in the US and the iTunes store was much smaller, if Walmart had threatened to pull marketing support from labels that signed deals with Apple with terms that were not in Walmart's interests, would that have been kosher?
If Apple had made deals with record labels to give them an unfair advantage in the selling of certain songs, Walmart would have been entirely justified in not investing their marketing dollars in promoting those songs. If the Amazon deal had been done by Apple with record labels, Amazon would have been justified in not wasting marketing dollars to promote songs they wouldn't have access to.
Are you really suggesting that Apple has some sort of obligation to (spend money to) promote music that they are being denied an equal opportunity to sell?
Right. And so they could then ask for a better deal themselves...as opposed to derailing any dealings with Amazon. Huge difference between influencing your own contracts and influencing others.
Whoa, step back a minute. Your first quote was, "And Apple would have every right to say to the labels, if you are giving a better deal to Amazon, we aren't going to play ball. That would be getting themselves a better deal."
Apple refused to play ball by stating they would pull free marketing and promotion. That's the part we agree on. That's what the investigation is concerning.
Quote:
Originally Posted by Tulkas
"Sources say that iTunes representatives have been urging labels to rethink their participation in the Amazon promotion and that they have backed up those warnings by withdrawing marketing support for certain releases featured as Daily Deals."
and once exclusivity was dropped
"has [b]continued[/i] to voice its displeasure with other aspects of the promotion, such as label marketing support."
Continued to.
Do you not understand "label marketing support" refers to the labels providing free marketing to Amazon's Daily Deal? That's the part that upsets Apple. That's the part that wasn't included in the original Daily Deals in 2008. And still there is not a mention that Apple would pull their marketing / promotion under the these circumstances, even though Apple would have every right to.
Here's another quote from the Billboard article, ""Amazon is fighting a guerrilla war against iTunes, and now iTunes is getting frustrated because they work hard to set up and promote a release weeks in advance of the street date, and then lo and behold, Amazon jumps in there with this deal of the day and scrapes off some of the cream."
Quote:
Originally Posted by Tulkas
Oh, I understood your point. It just wasn't a very good one. Apple doesn't hold all the power in their relationship with the labels. The labels, acting in unison, have a lot of power and this is used in their negotiations with Apple. But Apple seems to have enough clout to influence the labels dealings with Amazon.
It was and is a damn good point.
Apparently you didn't understand. As Amazon required Record Labels to include free marketing and promotions for the 24 hour exclusive Daily Deal and the new no 24 hour exclusive Daily Deal at the expense of losing Apple's free marketing / promotion it then didn't make economic sense to some Record Labels.
There are Record Labels still utilizing the Daily Deal and the 24 hour exclusives.
Quote from the now historic Billboard article, "One of the few albums to participate in an early-street-date Daily Deal promotion so far this year is Vampire Weekend's "Contra," which Amazon made available for $3.99 Jan. 11, a day before it was available anywhere else. The promotion played an obvious role in powering the album's No. 1 debut on the Billboard 200, with first-week U.S. sales of 124,000, of which 60% were digital downloads, according to Nielsen SoundScan.".
So no Apple has not shut down Amazon's Daily Deals.
By the way your statement, "labels, acting in unison,..."is the definition of collusion and price fixing.
Quote:
Originally Posted by Tulkas
They are certainly out for themselves. So is Apple. They are in a partnership. Both will try to get the most out of their relationship. Unless one side is expected to always and only have their partners interests at heart, it's hardly nefarious. Is Apple trying to undercut and attack the labels because they try to get what is best for them?
Apple is not undercutting anybody. You use the term undercut incorrectly with Apple. Apple negotiated contracts with the Record Labels in good faith, only to have the Record Labels undercut Apple by giving Amazon lower pricing, DRM free music early and now your stating that the "labels are acting in unison. How is this not attacking Apple at every turn.
How on God's Green Earth can you not see that the Record Labels are sticking it to Apple at every turn.
Quote:
Originally Posted by Tulkas;1642951MS
was threatening to withhold marketing resources from the partners. Apple isn't doing this? Well, then there really is no case. The DoJ should pack up. But if they are doing this...you seem to think it wouldn't be right. or maybe you don't. Not sure.
Microsofts customers were computer manufacturers, HP, Dell, IBM, Compac, Acer, etc.
Apple's customers are you and me.
Microsoft threatened to withhold free advertising dollars from their customers, the computer manufacturers, whom they do not own, putting them at a disadvantage to their competitors
Apple dropped free advertising from their own store, if the Record labels gave Amazon a 24 hour exclusive and the Record Labels provided free marketing / promotions to Amazon.
Quote:
Originally Posted by Tulkas
You are confusing Amazon with the labels. Amazon has no clout. At best they are a tool used by the labels. As for the labels, yes, they should be investigated and investigated before Apple. Their practices are as bad or worse.
I'm not confusing Amazon nor the Labels. I'm just telling you that a more apt comparison to what Microsoft did is what the Record Labels could do to their customers.
Amazon has plenty of clout, look at overall sales of music including CDs. That's the card Amazon is playing.
If Apple had made deals with record labels to give them an unfair advantage in the selling of certain songs, Walmart would have been entirely justified in not investing their marketing dollars in promoting those songs. If the Amazon deal had been done by Apple with record labels, Amazon would have been justified in not wasting marketing dollars to promote songs they wouldn't have access to.
Are you really suggesting that Apple has some sort of obligation to (spend money to) promote music that they are being denied an equal opportunity to sell?
No, I am suggesting that they shouldn't use those dollars as a kludge to get the labels to agree to terms with Amazon that are to Apple's liking. The Amazon should be allowed to negotiate in good faith with the labels without concern is Apple likes what they have to offer.
No, I am suggesting that they shouldn't use those dollars as a kludge to get the labels to agree to terms with Amazon that are to Apple's liking. The Amazon should be allowed to negotiate in good faith with the labels without concern is Apple likes what they have to offer.
But, by your interpretation, if they do anything with those dollars other than spend them at the same rate they would for music where a competitor is not granted a short term monopoly, they are using them as a "kludge". Sorry, but what you describe as a kludge, looks an awful like what is often referred to as "common sense".
Whoa, step back a minute. Your first quote was, "And Apple would have every right to say to the labels, if you are giving a better deal to Amazon, we aren't going to play ball. That would be getting themselves a better deal."
Apple refused to play ball by stating they would pull free marketing and promotion. That's the part we agree on. That's what the investigation is concerning.
Big difference between them getting themselves a better deal with this threat and using this threat to undermine Amazon ability to offer a separate deal. That is what the investigation is looking at. If Apple doesn't get the deal they want for themselves, they have every right to act. But should they control what deals Amazon can offer?
Quote:
Originally Posted by rickag
Do you not understand "label marketing support" refers to the labels providing free marketing to Amazon's Daily Deal? That's the part that upsets Apple. That's the part that wasn't included in the original Daily Deals in 2008. And still there is not a mention that Apple would pull their marketing / promotion under the these circumstances, even though Apple would have every right to.
Here's another quote from the Billboard article, ""Amazon is fighting a guerrilla war against iTunes, and now iTunes is getting frustrated because they work hard to set up and promote a release weeks in advance of the street date, and then lo and behold, Amazon jumps in there with this deal of the day and scrapes off some of the cream."
And those parts of the deal that undermine Apple's negotiated deals (early access) would be a concern. Deals that involve the labels spending money with Amazon are between Amazon and the labels. Similarly, deals Apple makes with the labels to share marketing costs are between them and the labels.
Quote:
Originally Posted by rickag
It was and is a damn good point.
Apparently you didn't understand. As Amazon required Record Labels to include free marketing and promotions for the 24 hour exclusive Daily Deal and the new no 24 hour exclusive Daily Deal at the expense of losing Apple's free marketing / promotion it then didn't make economic sense to some Record Labels.
Then Apple is free to demand as good or better deals for them. They could have demanded the labels pony up marketing dollars for them too or lower prices or whatever they wanted to demand for themselves. They are not free to determine what Amazon may offer the labels.
Quote:
Originally Posted by rickag
There are Record Labels still utilizing the Daily Deal and the 24 hour exclusives.
Quote from the now historic Billboard article, "One of the few albums to participate in an early-street-date Daily Deal promotion so far this year is Vampire Weekend's "Contra," which Amazon made available for $3.99 Jan. 11, a day before it was available anywhere else. The promotion played an obvious role in powering the album's No. 1 debut on the Billboard 200, with first-week U.S. sales of 124,000, of which 60% were digital downloads, according to Nielsen SoundScan.".
So no Apple has not shut down Amazon's Daily Deals.
No they haven't. They tried. And no one said Amazon had stopped the advance access completely. Just that they offered plans without it and this did not stop the complaints, so early access was obviously not the only issue Apple had with the promotion. Which I have repeatedly stated.
Quote:
Originally Posted by rickag
By the way your statement, "labels, acting in unison,..."is the definition of collusion and price fixing.
What part of me saying they were a cabal, act shamefully and should be investigated prior to any investigation into Apple wasn't clear?
Quote:
Originally Posted by rickag
Apple is not undercutting anybody. You use the term undercut incorrectly with Apple. Apple negotiated contracts with the Record Labels in good faith, only to have the Record Labels undercut Apple by giving Amazon lower pricing, DRM free music early and now your stating that the "labels are acting in unison. How is this not attacking Apple at every turn.
When one party tries to sell for cheaper than a competitor, they are undercutting the competitor. Your use of the word to describe their partners behavior was in fact incorrect. Hence, my asking you if Apple was trying to undercut them. Sheesh..don't correct my rhetorical question about your use of the word by further mangling it's meaning.
The labels are 'attacking' Apple by trying to get the best deal for themselves. This is no more 'attacking' Apple than Apple trying to get the best deal for them is 'attacking' the labels.
Quote:
Originally Posted by rickag
How on God's Green Earth can you not see that the Record Labels are sticking it to Apple at every turn.
And if they are doing so illegally, then they should be investigated. Two wrongs usually don't make a right.
Quote:
Originally Posted by rickag
Microsofts customers were computer manufacturers, HP, Dell, IBM, Compac, Acer, etc.
Apple's customers are you and me.
And yet anti-competitive actions and be used both directions. Funny how that works.
Quote:
Originally Posted by rickag
Microsoft threatened to withhold free advertising dollars from their customers, the computer manufacturers, whom they do not own, putting them at a disadvantage to their competitors
Apple dropped free advertising from their own store, if the Record labels gave Amazon a 24 hour exclusive and the Record Labels provided free marketing / promotions to Amazon.
...and continued their encouragement not to take part when the 24 hour exclusive was dropped.
Quote:
Originally Posted by rickag
I'm not confusing Amazon nor the Labels. I'm just telling you that a more apt comparison to what Microsoft did is what the Record Labels could do to their customers.
unfortunately, anticompetitive practices can also be applied by a buyer/customer against a vendor to affect a competitor.
But, by your interpretation, if they do anything with those dollars other than spend them at the same rate they would for music where a competitor is not granted a short term monopoly, they are using them as a "kludge". Sorry, but what you describe as a kludge, looks an awful like what is often referred to as "common sense".
And when used in cases where this no short term monopoly?
Comments
Wrong again:
"On June 28, 2007, the Supreme Court overruled Dr. Miles, discussed below, holding that such vertical price restraints as Minimum Advertised Pricing are not per se unlawful but, rather, must be judged under the "rule of reason." Leegin Creative Leather Products, Inc. v. PSKS, Inc., Slip Op. No. 06?480 (Decided June 28, 2007).[2] This marked a dramatic shift on how attorneys and enforcement agencies address approach the legality of contractual minimum prices, and essentially allowed the reestablishment of resale price maintenance in the United States in most (but not all) commercial situations.
...
n 1980, the U.S. Supreme Court held that the repeal of Miller-Tydings implied that the Sherman Act's complete ban of vertical price fixing was again effective, and that even the 21st Amendment could not shield California's liquor resale price maintenance regime from the reach of the Sherman Act. California Liquor Dealers v. Midcal Aluminum, 445 U.S. 97 (1980). Thus, from the 1975 enactment of the Consumer Goods Pricing Act to the 2008 Leegin decision, resale price maintenance was again no longer legal in the United States."
http://en.wikipedia.org/wiki/Resale_price_maintenance
So the Supreme Court agrees with me. It's NOT ILLEGAL. What they said is that if the accused did something ELSE wrong, they could still be charged. Thanks for proving that I was right.
Given that we agree on the concepts, any disagreement is related only to terminology, and so can be overlooked.
Fair enough. I realize this monopoly vs. market power thing can become pedantic. The only time it really begs for clarification is when someone uses the argument that Company X can't have a monopoly because consumers still have a choice, so the government should leave the company alone. We hear that a lot, actually.
Really? Lemme see: DOJ, anti-trust, using dominance to dictate terms... No, you're right, totally non-analogous.
Sorry, you have not quite made your point. While sarcasm is sometimes an added cherry on top of a well-made cake that is a cogent argument, it isn't so in your case. Here's a tip: Answer the question, explain your analogy. Save the sarcasm for later.
Just because two things have similar ingredients, that does not make them the same.
They are a retailing giant and hey are 3rd in the total music sales category with 12% compared to Apple's 28%. But in downloaded music sales, Apple is at ~70% and Amazon, I think, it around 8%, which I think makes them second. Being that distant a 2nd place makes them a small player, in download music sales. Isn't the Zune the #2 PMP and MS a huge company? They are still a small player in the PMP market.
Perhaps looking at only the downloaded music sales is too narrow in scope. But, as it is a large market by itself and is the only growing segment (thanks to Apple) of the music sales market as a whole, it seems appropriate.
So what you're saying is, it is great that Apple pretty much single handedly created (yet another) market but it needs to lend a helping hand to other companies because they aren't good enough to do it themselves?
How anyone can't see that this is a clear attempt by the music companies to play one distributor off another and try and wrest power back in the distribution space (and screw me and the artists in the process with bullshit ways to get my music) is completely beyond my comprehension.
So what you're saying is, it is great that Apple pretty much single handedly created (yet another) market but it needs to lend a helping hand to other companies because they aren't good enough to do it themselves?
Hardly. But creating a successful business within a market doesn't give one the right to do anything you want within that market. The absence of a helping hand doesn't equate to closed fist. Apple negotiating for the best terms for themselves is not the same as negotiating for diminished terms for their competitors.
How anyone can't see that this is a clear attempt by the music companies to play one distributor off another and try and wrest power back in the distribution space (and screw me and the artists in the process with bullshit ways to get my music) is completely beyond my comprehension.
Which is done all the time. I am sure Apple does it with their partners and suppliers too. That is not a problem (dealing with one hoping to get another to give you a similar or better deal). Subsequently using those relationships to interfere with a competitor's ability to freely negotiate is a very different matter.
try hard seth, try hard.[/QUOTE]
You don't have to be such a d!ck to try and make your points.
Let's analyze your MS analogy. The players in the PC market are MS (OS, gets paid to provide, also provides OEMs marketing), OEMs, other software companies that write applications for MS Windows. If the OEMs decided not to promote Windows because MS was dicking them around, that would be fair. What's not fair is MS dicking them around.
The players in the music retail business are the musicians, music companies, distribution channel (retail). If the distribution channel does not advertise music that is NOT available to it at the same time as another channel, it really is fair. What's not fair is the music companies dicking them around.
If I have a supermarket and you sell me oranges at a higher price (or don't sell me your choicest oranges), but give the stores in my area the better deal, I'll still be happy to carry your oranges but I'll use my limited space out front to advertise something else. It is a wholly legitimate use of leverage. If I refused to carry your oranges at all, even that move is subject to debate over whether that is illegal.
If MS withheld marketing dollars, that is the equivalent of the music company not promoting the distributor, NOT the other way around. It would be like YOU the star orange grower not promoting my store.
Hardly. But creating a successful business within a market doesn't give one the right to do anything you want within that market. The absence of a helping hand doesn't equate to closed fist. Apple negotiating for the best terms for themselves is not the same as negotiating for diminished terms for their competitors.
Which is done all the time. I am sure Apple does it with their partners and suppliers too. That is not a problem (dealing with one hoping to get another to give you a similar or better deal). Subsequently using those relationships to interfere with a competitor's ability to freely negotiate is a very different matter.
1> Doing whatever you want in that market? Let's look at Ticketmaster for a second. It does whatever it wants and is legal. It constantly works to crush anyone that enters that market. That is the definition of competition. How did Apple negotiate diminished terms for their competitors (Amazon)? Amazon wanted diminished terms for Apple here. Apple simply chose to resist efforts by the music companies to undermine it by using some of the leverage it has against some of the leverage the music companies exerted upon it.
Closed fist is perfectly alright in a competitive market, btw, even though this has nothing to do with Apple trying to directly crush Amazon. Amazon has a similar right to appeal/use whatever leverage it has if the music companies favored Apple with new releases. The fact that Amazon exists and is able to get music is a GREAT example of how the closed fist does not discourage competition. The fact that no one gives a flying **** about Amazon's music is lamentable but you can't argue with what the market has chosen.
2> You make an egregious error in leaping from the statement that Apple uses tactics like playing one partner off another to the fact that what it is now doing interferes with a competitor. The complaint here is from the music companies, not Amazon.
Subsequently using those relationships to interfere with a competitor's ability to freely negotiate is a very different matter.
There you go again, implying that Apple has been "[interfering] with a competitor's ability to freely negotiate". Nothing that's come to light supports this assertion. Sorry, but Apple's refusal to waste marketing dollars on songs the record labels were withholding from them to benefit competitors simply doesn't qualify. If anything, this looks like a blatant and coordinated attempt by the labels to manipulate the retail market.
Let's analyze your MS analogy. The players in the PC market are MS (OS, gets paid to provide, also provides OEMs marketing), OEMs, other software companies that write applications for MS Windows. If the OEMs decided not to promote Windows because MS was dicking them around, that would be fair. What's not fair is MS dicking them around.
Depends on exactly how MS is 'dicking' with them.
The players in the music retail business are the musicians, music companies, distribution channel (retail). If the distribution channel does not advertise music that is NOT available to it at the same time as another channel, it really is fair.
Right. And so the other party in the distribution channel should demand the same treatment. That would be fair. Demanding that they instead remove themselves from a competitors promos is not the same.
What's not fair is the music companies dicking them around.
Agreed. Though that is very vague.
If I have a supermarket and you sell me oranges at a higher price (or don't sell me your choicest oranges), but give the stores in my area the better deal, I'll still be happy to carry your oranges but I'll use my limited space out front to advertise something else. It is a wholly legitimate use of leverage. If I refused to carry your oranges at all, even that move is subject to debate over whether that is illegal.
If the larger supermarket down the street negotiates all of the orange farmers and gets a good deal great. If they use that deal to prevent you from negotiating your own deal with the farmers, saying by removing all their advertising for the oranges, you have just been 'dicked'. The orange farmer wouldn't be willing to poison the good thing they have of selling to to larger supermarket.
There is nothing wrong with your or them negotiating a 'better' deal. There might be something wrong with your competitor telling your common partners how they may deal with you.
If MS withheld marketing dollars, that is the equivalent of the music company not promoting the distributor, NOT the other way around. It would be like YOU the star orange grower not promoting my store.
Buyers can also be monopolists.
Anyhoo, as I explained, your supermarket analogy can be used to show the buyer (supermarket) side of the equation, if big enough, can also leverage their clout, as it should be. As long as it is leveraged fairly.
As for my harshness with our friend seth. You will see he uses and encourages such posts. I respond to him in the manner which he seems most used to.
There you go again, implying that Apple has been "[interfering] with a competitor's ability to freely negotiate". Nothing that's come to light supports this assertion. Sorry, but Apple's refusal to waste marketing dollars on songs the record labels were withholding from them to benefit competitors simply doesn't qualify. If anything, this looks like a blatant and coordinated attempt by the labels to manipulate the retail market.
If Amazon makes an attractive offer to the labels and it is refused, not on it's own merit but because Apple has 'encouraged' them to reject it, that sounds an awful lot like interfering to me.
1> Doing whatever you want in that market? Let's look at Ticketmaster for a second. It does whatever it wants and is legal. It constantly works to crush anyone that enters that market. That is the definition of competition. How did Apple negotiate diminished terms for their competitors (Amazon)? Amazon wanted diminished terms for Apple here.
And people have been rightful concerned the the actions of Ticketmaster. But the fact that it has gotten away with a lot in no way implies it cannot do something illegal. You aren't honestly arguing that all things are legal in competition, are you?
Amazon didn't diminish Apple's terms at all. They tried to negotiate for better terms. Sort of the point of negotiating. How did Apple negotiate diminished terms for their competitors (Amazon)? Simply. Apparently very simply...by telling their partners not to accept Amazon's offers, in at aleast some cases combined with the threat of removing marketing support.
Apple simply chose to resist efforts by the music companies to undermine it by using some of the leverage it has against some of the leverage the music companies exerted upon it.
By telling them what terms they could negotiate with Amazon that would meet Apple's approval.
Closed fist is perfectly alright in a competitive market, btw, even though this has nothing to do with Apple trying to directly crush Amazon. Amazon has a similar right to appeal/use whatever leverage it has if the music companies favored Apple with new releases. The fact that Amazon exists and is able to get music is a GREAT example of how the closed fist does not discourage competition. The fact that no one gives a flying **** about Amazon's music is lamentable but you can't argue with what the market has chosen.
So, Amazon should only be able to make their own deals with the labels that Apple approves of? That is competition?
2> You make an egregious error in leaping from the statement that Apple uses tactics like playing one partner off another to the fact that what it is now doing interferes with a competitor. The complaint here is from the music companies, not Amazon.
No, I didn't even link the two. Apple and every other company that buys, will play their suppliers to get the best deal possible. The bigger they are, the better the deals they can negotiate. That is competition amongst the suppliers. But for Apple to then influence what deals those same suppliers can accept from a competitor is a completely different circumstance.
If Amazon makes an attractive offer to the labels and it is refused, not on it's own merit but because Apple has 'encouraged' them to reject it, that sounds an awful lot like interfering to me.
If Amazon and the record labels come up with a scheme to promote Amazon as their preferred retailer, but Apple throws a wrench into their plans by refusing to be stupid, that sounds an awful lot like Apple just not being stupid.
If Amazon and the record labels come up with a scheme to promote Amazon as their preferred retailer, but Apple throws a wrench into their plans by refusing to be stupid, that sounds an awful lot like Apple just not being stupid.
Not being stupid doesn't mean rules don't apply.
I've asked this before, but no one has answered. When Walmart was still the dominant retailer of all music in the US and the iTunes store was much smaller, if Walmart had threatened to pull marketing support from labels that signed deals with Apple with terms that were not in Walmart's interests, would that have been kosher?
So the Supreme Court agrees with me. It's NOT ILLEGAL. What they said is that if the accused did something ELSE wrong, they could still be charged. Thanks for proving that I was right.
You might want to reread what I responded to. The quoted passages clearly do not agree with what you had said.
I'm done with the side-topic of retail price maintenance.
Not being stupid doesn't mean rules don't apply.
I've asked this before, but no one has answered. When Walmart was still the dominant retailer of all music in the US and the iTunes store was much smaller, if Walmart had threatened to pull marketing support from labels that signed deals with Apple with terms that were not in Walmart's interests, would that have been kosher?
If Apple had made deals with record labels to give them an unfair advantage in the selling of certain songs, Walmart would have been entirely justified in not investing their marketing dollars in promoting those songs. If the Amazon deal had been done by Apple with record labels, Amazon would have been justified in not wasting marketing dollars to promote songs they wouldn't have access to.
Are you really suggesting that Apple has some sort of obligation to (spend money to) promote music that they are being denied an equal opportunity to sell?
Right. And so they could then ask for a better deal themselves...as opposed to derailing any dealings with Amazon. Huge difference between influencing your own contracts and influencing others.
Whoa, step back a minute. Your first quote was, "And Apple would have every right to say to the labels, if you are giving a better deal to Amazon, we aren't going to play ball. That would be getting themselves a better deal."
Apple refused to play ball by stating they would pull free marketing and promotion. That's the part we agree on. That's what the investigation is concerning.
"Sources say that iTunes representatives have been urging labels to rethink their participation in the Amazon promotion and that they have backed up those warnings by withdrawing marketing support for certain releases featured as Daily Deals."
and once exclusivity was dropped
"has [b]continued[/i] to voice its displeasure with other aspects of the promotion, such as label marketing support."
Continued to.
Do you not understand "label marketing support" refers to the labels providing free marketing to Amazon's Daily Deal? That's the part that upsets Apple. That's the part that wasn't included in the original Daily Deals in 2008. And still there is not a mention that Apple would pull their marketing / promotion under the these circumstances, even though Apple would have every right to.
Here's another quote from the Billboard article, ""Amazon is fighting a guerrilla war against iTunes, and now iTunes is getting frustrated because they work hard to set up and promote a release weeks in advance of the street date, and then lo and behold, Amazon jumps in there with this deal of the day and scrapes off some of the cream."
Oh, I understood your point. It just wasn't a very good one. Apple doesn't hold all the power in their relationship with the labels. The labels, acting in unison, have a lot of power and this is used in their negotiations with Apple. But Apple seems to have enough clout to influence the labels dealings with Amazon.
It was and is a damn good point.
Apparently you didn't understand. As Amazon required Record Labels to include free marketing and promotions for the 24 hour exclusive Daily Deal and the new no 24 hour exclusive Daily Deal at the expense of losing Apple's free marketing / promotion it then didn't make economic sense to some Record Labels.
There are Record Labels still utilizing the Daily Deal and the 24 hour exclusives.
Quote from the now historic Billboard article, "One of the few albums to participate in an early-street-date Daily Deal promotion so far this year is Vampire Weekend's "Contra," which Amazon made available for $3.99 Jan. 11, a day before it was available anywhere else. The promotion played an obvious role in powering the album's No. 1 debut on the Billboard 200, with first-week U.S. sales of 124,000, of which 60% were digital downloads, according to Nielsen SoundScan.".
So no Apple has not shut down Amazon's Daily Deals.
By the way your statement, "labels, acting in unison,..." is the definition of collusion and price fixing.
They are certainly out for themselves. So is Apple. They are in a partnership. Both will try to get the most out of their relationship. Unless one side is expected to always and only have their partners interests at heart, it's hardly nefarious. Is Apple trying to undercut and attack the labels because they try to get what is best for them?
Apple is not undercutting anybody. You use the term undercut incorrectly with Apple. Apple negotiated contracts with the Record Labels in good faith, only to have the Record Labels undercut Apple by giving Amazon lower pricing, DRM free music early and now your stating that the "labels are acting in unison. How is this not attacking Apple at every turn.
How on God's Green Earth can you not see that the Record Labels are sticking it to Apple at every turn.
was threatening to withhold marketing resources from the partners. Apple isn't doing this? Well, then there really is no case. The DoJ should pack up. But if they are doing this...you seem to think it wouldn't be right. or maybe you don't. Not sure.
Microsofts customers were computer manufacturers, HP, Dell, IBM, Compac, Acer, etc.
Apple's customers are you and me.
Microsoft threatened to withhold free advertising dollars from their customers, the computer manufacturers, whom they do not own, putting them at a disadvantage to their competitors
Apple dropped free advertising from their own store, if the Record labels gave Amazon a 24 hour exclusive and the Record Labels provided free marketing / promotions to Amazon.
You are confusing Amazon with the labels. Amazon has no clout. At best they are a tool used by the labels. As for the labels, yes, they should be investigated and investigated before Apple. Their practices are as bad or worse.
I'm not confusing Amazon nor the Labels. I'm just telling you that a more apt comparison to what Microsoft did is what the Record Labels could do to their customers.
Amazon has plenty of clout, look at overall sales of music including CDs. That's the card Amazon is playing.
If Apple had made deals with record labels to give them an unfair advantage in the selling of certain songs, Walmart would have been entirely justified in not investing their marketing dollars in promoting those songs. If the Amazon deal had been done by Apple with record labels, Amazon would have been justified in not wasting marketing dollars to promote songs they wouldn't have access to.
Are you really suggesting that Apple has some sort of obligation to (spend money to) promote music that they are being denied an equal opportunity to sell?
No, I am suggesting that they shouldn't use those dollars as a kludge to get the labels to agree to terms with Amazon that are to Apple's liking. The Amazon should be allowed to negotiate in good faith with the labels without concern is Apple likes what they have to offer.
No, I am suggesting that they shouldn't use those dollars as a kludge to get the labels to agree to terms with Amazon that are to Apple's liking. The Amazon should be allowed to negotiate in good faith with the labels without concern is Apple likes what they have to offer.
But, by your interpretation, if they do anything with those dollars other than spend them at the same rate they would for music where a competitor is not granted a short term monopoly, they are using them as a "kludge". Sorry, but what you describe as a kludge, looks an awful like what is often referred to as "common sense".
Whoa, step back a minute. Your first quote was, "And Apple would have every right to say to the labels, if you are giving a better deal to Amazon, we aren't going to play ball. That would be getting themselves a better deal."
Apple refused to play ball by stating they would pull free marketing and promotion. That's the part we agree on. That's what the investigation is concerning.
Big difference between them getting themselves a better deal with this threat and using this threat to undermine Amazon ability to offer a separate deal. That is what the investigation is looking at. If Apple doesn't get the deal they want for themselves, they have every right to act. But should they control what deals Amazon can offer?
Do you not understand "label marketing support" refers to the labels providing free marketing to Amazon's Daily Deal? That's the part that upsets Apple. That's the part that wasn't included in the original Daily Deals in 2008. And still there is not a mention that Apple would pull their marketing / promotion under the these circumstances, even though Apple would have every right to.
Here's another quote from the Billboard article, ""Amazon is fighting a guerrilla war against iTunes, and now iTunes is getting frustrated because they work hard to set up and promote a release weeks in advance of the street date, and then lo and behold, Amazon jumps in there with this deal of the day and scrapes off some of the cream."
And those parts of the deal that undermine Apple's negotiated deals (early access) would be a concern. Deals that involve the labels spending money with Amazon are between Amazon and the labels. Similarly, deals Apple makes with the labels to share marketing costs are between them and the labels.
It was and is a damn good point.
Apparently you didn't understand. As Amazon required Record Labels to include free marketing and promotions for the 24 hour exclusive Daily Deal and the new no 24 hour exclusive Daily Deal at the expense of losing Apple's free marketing / promotion it then didn't make economic sense to some Record Labels.
Then Apple is free to demand as good or better deals for them. They could have demanded the labels pony up marketing dollars for them too or lower prices or whatever they wanted to demand for themselves. They are not free to determine what Amazon may offer the labels.
There are Record Labels still utilizing the Daily Deal and the 24 hour exclusives.
Quote from the now historic Billboard article, "One of the few albums to participate in an early-street-date Daily Deal promotion so far this year is Vampire Weekend's "Contra," which Amazon made available for $3.99 Jan. 11, a day before it was available anywhere else. The promotion played an obvious role in powering the album's No. 1 debut on the Billboard 200, with first-week U.S. sales of 124,000, of which 60% were digital downloads, according to Nielsen SoundScan.".
So no Apple has not shut down Amazon's Daily Deals.
No they haven't. They tried. And no one said Amazon had stopped the advance access completely. Just that they offered plans without it and this did not stop the complaints, so early access was obviously not the only issue Apple had with the promotion. Which I have repeatedly stated.
By the way your statement, "labels, acting in unison,..." is the definition of collusion and price fixing.
What part of me saying they were a cabal, act shamefully and should be investigated prior to any investigation into Apple wasn't clear?
Apple is not undercutting anybody. You use the term undercut incorrectly with Apple. Apple negotiated contracts with the Record Labels in good faith, only to have the Record Labels undercut Apple by giving Amazon lower pricing, DRM free music early and now your stating that the "labels are acting in unison. How is this not attacking Apple at every turn.
When one party tries to sell for cheaper than a competitor, they are undercutting the competitor. Your use of the word to describe their partners behavior was in fact incorrect. Hence, my asking you if Apple was trying to undercut them. Sheesh..don't correct my rhetorical question about your use of the word by further mangling it's meaning.
The labels are 'attacking' Apple by trying to get the best deal for themselves. This is no more 'attacking' Apple than Apple trying to get the best deal for them is 'attacking' the labels.
How on God's Green Earth can you not see that the Record Labels are sticking it to Apple at every turn.
And if they are doing so illegally, then they should be investigated. Two wrongs usually don't make a right.
Microsofts customers were computer manufacturers, HP, Dell, IBM, Compac, Acer, etc.
Apple's customers are you and me.
And yet anti-competitive actions and be used both directions. Funny how that works.
Microsoft threatened to withhold free advertising dollars from their customers, the computer manufacturers, whom they do not own, putting them at a disadvantage to their competitors
Apple dropped free advertising from their own store, if the Record labels gave Amazon a 24 hour exclusive and the Record Labels provided free marketing / promotions to Amazon.
...and continued their encouragement not to take part when the 24 hour exclusive was dropped.
I'm not confusing Amazon nor the Labels. I'm just telling you that a more apt comparison to what Microsoft did is what the Record Labels could do to their customers.
unfortunately, anticompetitive practices can also be applied by a buyer/customer against a vendor to affect a competitor.
But, by your interpretation, if they do anything with those dollars other than spend them at the same rate they would for music where a competitor is not granted a short term monopoly, they are using them as a "kludge". Sorry, but what you describe as a kludge, looks an awful like what is often referred to as "common sense".
And when used in cases where this no short term monopoly?