DoJ seen as unlikely to win antitrust e-book suit against Apple

1356

Comments

  • Reply 41 of 114
    Quote:
    Originally Posted by aaarrrgggh View Post


    So, if that is correct, the manufacturer has the power to control price of their products at retail, within reason.



    Does that reasoning apply to a cartel formed to raise prices across the industry?
  • Reply 42 of 114
    mutatiomutatio Posts: 27member
    Quote:
    Originally Posted by iSheldon View Post


    I say BS. Imagine if when Microsoft announced their Zune player and with the music industry made Apple up their per song price to $5.

    SJ was a master at spinning BS- the biography shows this over and over. He wanted eBook share in line with Apples digital music share hence the iBook store.

    The fact that Amazon had to drive their prices up must have given no end to his glee.



    I'm sure he was happy to make money off of goods sold within Apple's (read: paid for and developed by Apple) infrastructure. With that said, Jobs, despite his failings, also valued doing things right and understood the value of any number of given ideas or products. As noted by the writer's guild president, I really don't want to see literature basically devalued with a sweatshop race to the bottom of who can sell these products for the lowest bargain basement prices. I'm perfectly fine with a sales model that values the work of authors rather than treats it as a commodity. Ironically, Jobs argued for lower prices than what the music folks wanted to avoid piracy concerns that would come with higher prices. I also believe this approach keeps the music industry more honest. One of Jobs' underlying philosophies was to basically focus on making a great product and the rest would sort itself out. Additionally, he had no tolerance for people or companies who would try and package mediocrity and try and sell it as something great. In the realm of music, this means that if artists, producers, and the record companies want to sell an album for $10+ then that album needs to have 10 tracks each worth the respective 99 cents (or $1.29), otherwise, people will just buy the few tracks that are great as opposed to the crap that's used as filler.

    The scenario is a bit different with books in that not every book is worth the $12.99+ that is oft discussed in this case. With that said, books are not bought and sold based upon whether a chapter is slow or not as exciting as the rest and there is really no way to segment and compartmentalize the product in the way that albums are with the respective songs. In any case, I refer back to my own concern, that the work of authors is not devalued through a typical and sad race to the bottom in prices. Yes, I know we're talking about publishers in this mix but I'm guessing J. K. Rowling et al. are doing just fine with their book contracts.
  • Reply 43 of 114
    jukesjukes Posts: 213member
    Quote:
    Originally Posted by applecider View Post


    Amazon was selling ebooks at below cost.



    I repeat amazon was selling ebooks at below cost.



    From original article at AI "Under Amazon's method, publishers would sell their books at wholesale and let the bookseller set its own prices. Amazon repeatedly upset publishers by selling titles at a loss."



    Apple broke that monopoly, thank you very much.



    DOJ is going after apple instead of amazon for one reason, they have the largest cash horde.



    There's nothing against selling items at a loss, these products are known as loss leaders and used in many retail settings. There is the potential for "dumping," but that's usually associated with imports when they are sold in the native market at a higher price.
  • Reply 44 of 114
    Quote:
    Originally Posted by iSheldon View Post


    You're missing the boat again. You don't think eBooks sales were a draw for SJ and Apple?

    How exactly does Apple make money of other eBook reader sales -at that point in time?

    Apple thought eBooks would drive trhe iPad originally hence the iBook store

    Read the article please- Jeesh!:



    http://mediadecoder.blogs.nytimes.co...-book-pricing/



    Just because I do not agree with you doesn't mean I'm missing any boats. I don't think ebooks was any huge draw for the iPad and if negotiations broke down with the publishers over ebooks, apple would have released it anyway with little to no effect on its sales (especially since, as I've mentioned several times, apple had other ereader apps available at the time.
  • Reply 45 of 114
    mdriftmeyermdriftmeyer Posts: 7,282member
    Quote:
    Originally Posted by Apple ][ View Post


    Eric Holder is a clown. I hope that he's out of a job soon.



    The clown was Gonzalez. At any rate, the thousands of cases brought forth each year do not all pass Holder's desk for approval. It's called delegation.
  • Reply 46 of 114
    mutatiomutatio Posts: 27member
    Quote:
    Originally Posted by freckledbruh View Post


    I think apple wanted the agency model for itself and other ebook sellers but didn't actually cross the line and tell the publishers what to charge. I think the illegal aspect of this case came about when the publishers all met and decided on prices across the board as opposed to coming up with their own prices individually (which I think they did in order to insure solidarity against amazon and none of the parties stabbed each other in the back by offering lower prices than the other parties). If it comes up in the case that Apple even suggested a price point to all parties, then I would definitely change my mind. If it comes out that apple knew what the publishers did but figured that that was their own issue, I'm not sure if I'd have an issue with it.



    Yes, it would be one thing if Apple were saying, you can only sell these products for X amount of dollars anywhere. As Apple basically said, "You set the prices, but we get to sell at whatever anyone else gets to sell for. If you say Amazon gets $5 a book, we get $5 a book and our 30% cut," I believe it's a different story. That's much different than the smoke-filled back room scenario that some seem to be painting. It may be interesting to see how this plays out after the companies that have bowed out decide to settle. Quite simply, is there any limitation beyond paying the fines to continuing to use the agency model? The publishers could effectively say, "We're not colluding with anyone over prices, but after all this we've found this pricing structure and the agency model to work for us." Who knows, perhaps they adjust the prices to 11.99 and 13.99 to give the appearance of change while sticking with the agency model.
  • Reply 47 of 114
    kent909kent909 Posts: 709member
    Quote:
    Originally Posted by freckledbruh View Post


    Apple didn't need to strip ebook market share to sell iPads. Didn't you notice that there were several ebook readers available for iPad (including amazon's kindle) at launch? You seem to think that ebooks is some HUGE draw for the iPad and that really is just not the case. And btw, you are the one who appears naive in your posts.



    Amazon has not paid 2.5B to developers or to publishers. Maybe iPads are something more to Apple and consumers than an e book device. This whole lawsuit is a joke. It shows that American capitalism is a joke also.
  • Reply 48 of 114
    Quote:
    Originally Posted by dav View Post


    wink wink, nod nod, know-what-i-mean?



    What the heck are you winking and nodding for? I have about 10,000 songs, probably no more than 500 of which come from iTunes.



    The rest are from my CD collection.
  • Reply 49 of 114
    alnormalnorm Posts: 37member
    Apple already 'lost' this case when three of the five publishers agreed to settle. At this point, Apple is just wasting money when it should settle and cut its losses.



    Why has it already lost? Holding high prices with the agency model only works if the majority of the market is holding similar prices. As soon as Amazon gets to go back to wholesale with 3 of the world's six largest publishers, it's going to look like one of those logic tests you took in elementary school.



    Which of these is not like the others? A) 9.99 B) 9.99 C) 8.99 D) 14.99 E) 8.99 F) 9.99.



    Apple must now choose to compete on price or not.



    But it's the non-settling publishers I really feel sorry for. They will be stuck on an agency model and competing against Amazon's discounted prices. So when those agency model publishers lower their prices to become more competitive, they must also cut their profit, which is less than what the wholesale folks are getting (wholesale prices remain static when retail prices change up or down, whereas under agency the net price goes up when the retail goes up and the net goes down when the retail goes down).
  • Reply 50 of 114
    gatorguygatorguy Posts: 20,755member
    Quote:
    Originally Posted by freckledbruh View Post


    If it comes up in the case that Apple even suggested a price point to all parties, then I would definitely change my mind.



    That's one of the assertions in the DoJ complaint. Apple told the publishers they wanted $12.99, the publishers came back to Apple and said they'd rather shoot for $14.99. In the end Apple agreed they should use $12.99 and 14.99 as the price points. Apparently the only ones involved in setting this up and setting the agreed on prices that would apply to every bookseller were those five publishers and Apple.



    I posted this for someone else

    http://www.businessinsider.com/doj-l...ks-2012-4?op=1



    About midway down the page.
  • Reply 51 of 114
    solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by ALNorm View Post


    Apple already 'lost' this case when three of the five publishers agreed to settle. At this point, Apple is just wasting money when it should settle and cut its losses.



    That makes no sense.



    Quote:

    Why has it already lost? Holding high prices with the agency model only works if the majority of the market is holding similar prices.



    Apple isn't "holding" any price. That's the point of the agency model!



    Quote:

    As soon as Amazon gets to go back to wholesale with 3 of the world's six largest publishers, it's going to look like one of those logic tests you took in elementary school.



    So the settlement of those three publishers including a commitment to never using an agency model?



    Quote:

    Which of these is not like the others? A) 9.99 B) 9.99 C) 8.99 D) 14.99 E) 8.99 F) 9.99.



    i think that's begging the question.



    Quote:

    Apple must now choose to compete on price or not.



    So you've concluded that...
    1. Apple is at fault for allowing an agency model.

    2. Apple is hurting competition by allowing an agency model.

    3. Apple needs to force publishers to have lower prices so Amazon can compete better.

  • Reply 52 of 114
    Quote:
    Originally Posted by ALNorm View Post


    Apple already 'lost' this case when three of the five publishers agreed to settle. At this point, Apple is just wasting money when it should settle and cut its losses.



    Why has it already lost? Holding high prices with the agency model only works if the majority of the market is holding similar prices. As soon as Amazon gets to go back to wholesale with 3 of the world's six largest publishers, it's going to look like one of those logic tests you took in elementary school.



    Which of these is not like the others? A) 9.99 B) 9.99 C) 8.99 D) 14.99 E) 8.99 F) 9.99.



    Apple must now choose to compete on price or not.



    But it's the non-settling publishers I really feel sorry for. They will be stuck on an agency model and competing against Amazon's discounted prices. So when those agency model publishers lower their prices to become more competitive, they must also cut their profit, which is less than what the wholesale folks are getting (wholesale prices remain static when retail prices change up or down, whereas under agency the net price goes up when the retail goes up and the net goes down when the retail goes down).



    This post is nonsense.

    1) Agency model doesn't inherently mean higher prices.

    2) You assume Apple cares about competing on ebook prices when the revenue from ebooks is peanuts to apple.

    3) You also assume publishers (who set the prices!) would get schooled by others on the wholesale model when publishers could simply match those prices (I wouldn't but it is always an option for them)
  • Reply 53 of 114
    alnormalnorm Posts: 37member
    Quote:
    Originally Posted by SolipsismX View Post


    That makes no sense.



    I guess I need to spell it out for you. The agency model plan to which Apple agreed made the publishers set the prices and made the publishers guarantee that they would not sell said titles anywhere else for a price less than they sold on Apple iBooks (most-favorite nation clause).



    The settlements of the three publishers voided that contract with Apple. It also prohibited the publishers from disallowing retailers to discount. Hence, Apple is now defending a model which is inherently broken.





    Quote:

    Apple isn't "holding" any price. That's the point of the agency model!



    True, and perhaps I should have said that above, in that the agency model allowed the publishers to hold a high price, which in turn allowed Apple to compete with Amazon.





    Quote:

    So the settlement of those three publishers including a commitment to never using an agency model?



    No, but yes. Did it specifically say 'you are banned from the agency model?' No.



    But it did say 'you are prohibited from preventing a retailer from discounting.' Well, if the retailer can discount at will, then it isn't an agency model. So while the words agency model weren't specifically used, the main practice that separated agency from wholesale (allowing the retailer to set the final price) is allowed.





    Quote:

    So you've concluded that...
    1. Apple is at fault for allowing an agency model.

    2. Apple is hurting competition by allowing an agency model.

    3. Apple needs to force publishers to have lower prices so Amazon can compete better.




    I concluded no such thing, and I wonder how you implied as much. My conclusion is that Apple, from a business perspective, is defending itself in a lost cause. It's a lost cause because what allowed them to compete with Amazon on price required a majority of the market to agree. Now that that majority has gone away from that model--thanks to the settlement--Apple can't secure a competitive position under the model it is defending.



    So why should they continue this fight? Apple is the least culpable in this case. Its ebook business is worth 50 million a year? Antitrust cases can take years. It is worth it to fight?



    Now, if they want to defend themselves based on principle, all the power to them. I'm sure some attorneys are very happy.
  • Reply 54 of 114
    Quote:
    Originally Posted by Gatorguy View Post


    That's one of the assertions in the DoJ complaint. Apple told the publishers they wanted $12.99, the publishers came back to Apple and said they'd rather shoot for $14.99. In the end Apple agreed they should use $12.99 and 14.99 as the price points. Apparently the only ones involved in setting this up and setting the agreed on prices that would apply to every bookseller were those five publishers and Apple.



    I posted this for someone else

    http://www.businessinsider.com/doj-l...ks-2012-4?op=1



    About midway down the page.



    Good link and definitely makes this case a lot more gray than black-and-white. I do find it interesting that Apple suggested a ceiling for prices and not a floor as you (and others) have asserted. With that said, it still doesn't mean Apple has clean hands since it did suggest a price (which was rejected according to your link).
  • Reply 55 of 114
    alnormalnorm Posts: 37member
    Quote:
    Originally Posted by freckledbruh View Post


    This post is nonsense.

    1) Agency model doesn't inherently mean higher prices.



    In this case it did.



    Quote:

    2) You assume Apple cares about competing on ebook prices when the revenue from ebooks is peanuts to apple.



    Which is why I think Apple should settle. Why defend something that is peanuts to your business?



    Quote:

    3) You also assume publishers (who set the prices!) would get schooled by others on the wholesale model when publishers could simply match those prices (I wouldn't but it is always an option for them)



    I guess I need to spell this one out, so you can see why the publisher on agency and competing in the Amazon world of wholesale will eventually get screwed.



    Publisher A supplies Amazon with ebooks on a wholesale model. Each book has a wholesale price of 9.00 and Amazon sells it for 9.99.



    Publisher B is on Agency model. It currently has its comparable titles at $14.99, which means it makes 10.50 and Amazon makes 4.50.



    Now that Amazon is aggressively cutting prices on wholesale model titles, this evidenced by the 9.99 price point on the majority of those ebooks, the agency model looks drastically overpriced when compared to the 9.99 titles. So Publisher B drops his price, which he can because he is still on a agency contract. At 9.99, he is now making 7 dollars a copy, while his wholesale buddies at 9.99 are making 9.



    And remember, this is based on a $9 dollar wholesale price. In reality, Amazon was losing money on many of those titles, even paying a much as $14 dollars a copy and selling them for 9.99. In that case, publisher B's wholesale buddies are making twice as much on the same price point.



    So schooled? Nope. Screwed? Yep.
  • Reply 56 of 114
    solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by ALNorm View Post


    My conclusion is that Apple, from a business perspective, is defending itself in a lost cause. It's a lost cause because what allowed them to compete with Amazon on price required a majority of the market to agree. Now that that majority has gone away from that model--thanks to the settlement--Apple can't secure a competitive position under the model it is defending



    Ignoring all the other crap, you've just stated that the agency model allowed them to compete (despite being able to sell eBooks for a loss just like Amazon if they had chosen to) and that they can't compete with the agency model. Does not compute.
  • Reply 57 of 114
    Quote:
    Originally Posted by ALNorm View Post


    I guess I need to spell it out for you. The agency model plan to which Apple agreed made the publishers set the prices and made the publishers guarantee that they would not sell said titles anywhere else for a price less than they sold on Apple iBooks (most-favorite nation clause).



    Nope. Apple didn't force the publishers to not allow other retailers to discount. It made a deal where IF a retailer does discount, then Apple can match the price. Guess what? Stores do this all of the time.



    Quote:
    Originally Posted by ALNorm View Post


    The settlements of the three publishers voided that contract with Apple. It also prohibited the publishers from disallowing retailers to discount. Hence, Apple is now defending a model which is inherently broken.



    Again, nope. It would void agency contracts with other retailers which would need to be renegotiated which doesn't mean an automatic wholesale model (and even if it did, Apple would still have the right to match the price).







    Quote:
    Originally Posted by ALNorm View Post


    True, and perhaps I should have said that above, in that the agency model allowed the publishers to hold a high price, which in turn allowed Apple to compete with Amazon.



    You assume that Apple NEEDED to compete with Amazon. I disagree. If you can point me to a link where a huge percentage of iPad buyers purchased it mostly for ereading, I may change my mind.





    Quote:
    Originally Posted by ALNorm View Post


    No, but yes. Did it specifically say 'you are banned from the agency model?' No.



    But it did say 'you are prohibited from preventing a retailer from discounting.' Well, if the retailer can discount at will, then it isn't an agency model. So while the words agency model weren't specifically used, the main practice that separated agency from wholesale (allowing the retailer to set the final price) is allowed.



    Again, this is an issue for the publishers and not Apple.









    Quote:
    Originally Posted by ALNorm View Post


    I concluded no such thing, and I wonder how you implied as much. My conclusion is that Apple, from a business perspective, is defending itself in a lost cause. It's a lost cause because what allowed them to compete with Amazon on price required a majority of the market to agree. Now that that majority has gone away from that model--thanks to the settlement--Apple can't secure a competitive position under the model it is defending.



    So why should they continue this fight? Apple is the least culpable in this case. Its ebook business is worth 50 million a year? Antitrust cases can take years. It is worth it to fight?



    Now, if they want to defend themselves based on principle, all the power to them. I'm sure some attorneys are very happy.



    You still assume that the publishers MUST go back to the wholesale model which is not true. Each publisher can still insist on the agency model. The difference is that the publishers must establish their prices on their own as opposed to working together.
  • Reply 58 of 114
    Who cares about all this court crap? I would just like to be able to buy books from the iBookStore here in New Zealand but I can't because it's not available to me.



    Until then I have to settle with crappy books from Amazon. I want to buy from iBookStore because it's easier as iTunes is my main source of content purchasing.



    The same thing goes for TV shows. That's why I download from nefarious places because I can't get the damn shows I want to watch any other way. DVDs are hit and miss as to whether or not they get imported.
  • Reply 59 of 114
    solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by freckledbruh View Post


    You assume that Apple NEEDED to compete with Amazon. I disagree. If you can point me to a link where a huge percentage of iPad buyers purchased it mostly for ereading, I may change my mind.



    The conclusion some are making on this point is ridiculous. They are saying that people read books on the iPad so without iBooks and iBookstore the iPad wouldn't sell.



    But let's say, for argument sake, that number one use of the iPad is to read eBooks. Not having an iBooks app and iBookstore doesn't change that because there are already plenty of methods for reading books on the iPad so the need to compete with Amazon in order to keep selling iPads is erroneous.
  • Reply 60 of 114
    Quote:
    Originally Posted by SolipsismX View Post


    The conclusion some are making on this point is ridiculous. They are saying that people read books on the iPad so without iBooks and iBookstore the iPad wouldn't sell.



    But let's say, for argument sake, that number one use of the iPad is to read eBooks. Not having an iBooks app and iBookstore doesn't change that because there are already plenty of methods for reading books on the iPad so the need to compete with Amazon in order to keep selling iPads is erroneous.



    Wholeheartedly agree and have stated this consistently. As I said in another thread, the logic regarding this case is off the rails.
Sign In or Register to comment.