I'm still confused how this is illegal? If you wanna sell with a different model, why is that illegal? If it works, it'll sell. if it doesn't work, it won't sell.
A main issue seems to be the most favored clause. But this was something Amazon had and got away with for years. Heck Amazon still has it. But no one seems to care about that or the predatory pricing claims etc
What's illegal is that allegedly the publishers got together and forced Amazon to go with the agency model as well.
Which has nothing to do with Apple and no one has proof otherwise.
If the publishers were pissed about Amazons price games and decided in pack to say they wanted the terms changed or they weren't renewing contracts that is on them. Especially if there is proof they had a meet etc. if it happened that they each on their own took this stance that's a different game.
And really the EU thing isn't that big of a victory since after two years price control goes back to the publishers.
It is quite possible the publishers are guilty, but Apple is not. Afterall, the publishers are all competitors with one another. Apple does not compete with the publishers, but with retailers like Amazon. So, if the publishers all got together and agreed to strike a deal with Apple, that would be illegal. Apple, however, in entering into the agreements would not have done anything illegal.
Moreover, Apple is trying to strike one deal with all the publishers to keep the App Store simple. Nothing wrong with that either.
I won't label anyone guilty that hasn't been proven guilty but I will say that there's a high probability that the publishers are. Most if not all of these publishers are in New York and in close proximity of each other. The CEOs all know each other quite well and they probably attend each other's parties and other functions. It's quite possible that they banded together and used a viable threat (Apple) to get more favorable terms.
I just don't buy that. These are very well connected deep pocket having publishers that have white shoe law firms on retainer capable of handling a federal case. I don't believe they settled because it was more costly to fight but because it was more costly to lose.
I think you overestimate the financial strength of the publishers. Amazon has them by the short ones.
Which has nothing to do with Apple and no one has proof otherwise.
If the publishers were pissed about Amazons price games and decided in pack to say they wanted the terms changed or they weren't renewing contracts that is on them. Especially if there is proof they had a meet etc. if it happened that they each on their own took this stance that's a different game.
And really the EU thing isn't that big of a victory since after two years price control goes back to the publishers.
I never said Apple was actively in on it, but in cases like this is that they're determined on a "balance of probabilities”
Ok, then why isn't Amazon being investigated since it appears they did the same thing the DOJ is saying Apple did? Did those two publishers work independently with Amazon? Did they work together?
Ok, then why isn't Amazon being investigated since it appears they did the same thing the DOJ is saying Apple did? Did those two publishers work independently with Amazon? Did they work together?
Nothing wrong with agreeing with the agency model, but the publishers getting together to force that agreement is.
I'm still confused how this is illegal? If you wanna sell with a different model, why is that illegal? If it works, it'll sell. if it doesn't work, it won't sell.
Tesla sells directly to consumers. Apple sells directly to consumers. But Dell sells via a middle man (i.e. best buy) and Chevys sell via local dealerships as middle men. One isn't more illegal than the other. They should be free to sell it how they want.
Okay, so usually when a corporation messes up, I'm in favor of punishing them. But the whole ebook price fixing thing, I really don't see anything wrong here, especially b/c there's competition and not a monopoly. I don't even think customers even care. The only people who seem to be upset at this is greedy divisions of the government.
Because most pro-Apple web sites that report on this leave out the part where the agreements between Apple and the publishers also dictated the prices Amazon was allowed to sell the books for (ie, not for less than the prices on iTunes). To use one of your examples, that would be like Best Buy dictating the price any other reseller of Dell computers was allowed to charge. So the comment above that "especially b/c there's competition" is no longer true because Amazon was no longer allowed to sell books at a lower price (at a loss if they wanted to). This reduces competition. I believe the whole "agency vs wholesale" thing has nothing to do with one being better or one being illegal and the other one not. Both are perfectly valid business models. The question is one of collusion. Did Apple orchestrate an industry-wide effort to increase prices to consumers (regardless of how they might have gone about doing it or what business models they followed)? Oil companies colluding to set higher gas prices, airlines getting together to coordinate higher airfares, etc, etc...these things should rightly piss off consumers. If (**IF**) Apple did the same thing, then shouldn't they be held accountable? I'm not saying Apple is guilty, but shouldn't we find out? Or are we giving Apple a free pass because they make all our favorite toys?
A main issue seems to be the most favored clause. But this was something Amazon had and got away with for years. Heck Amazon still has it. But no one seems to care about that or the predatory pricing claims etc
As I undertand it (could be wrong) the "most favored" clauses people refer to are about the prices the producer charges the reseller. Nothing to do with the prices to the consumers. So Amazon may have told the publishers that they want their best wholesale price offered to any other reseller. But to my knowledge, they've never gone farther and tried to dictate the lowest price another reseller could sell to the consumer. Each reseller is allowed to set their own profit margin. Apple is accused of going that one step further and dictating other resellers (ie, Amazon's) price to the consumer.
Because most pro-Apple web sites that report on this leave out the part where the agreements between Apple and the publishers also dictated the prices Amazon was allowed to sell the books for (ie, not for less than the prices on iTunes).
They did no such thing.
The agreement simply said that if they couldn't offer a lower price to Amazon, they had to give Apple the same price.
Most Favored Nation clauses have been upheld by the US court system as being completely legal.
Because most pro-Apple web sites that report on this leave out the part where the agreements between Apple and the publishers also dictated the prices Amazon was allowed to sell the books for (ie, not for less than the prices on iTunes). To use one of your examples, that would be like Best Buy dictating the price any other reseller of Dell computers was allowed to charge. So the comment above that "especially b/c there's competition" is no longer true because Amazon was no longer allowed to sell books at a lower price (at a loss if they wanted to). This reduces competition. I believe the whole "agency vs wholesale" thing has nothing to do with one being better or one being illegal and the other one not. Both are perfectly valid business models. The question is one of collusion. Did Apple orchestrate an industry-wide effort to increase prices to consumers (regardless of how they might have gone about doing it or what business models they followed)? Oil companies colluding to set higher gas prices, airlines getting together to coordinate higher airfares, etc, etc...these things should rightly piss off consumers. If (**IF**) Apple did the same thing, then shouldn't they be held accountable? I'm not saying Apple is guilty, but shouldn't we find out? Or are we giving Apple a free pass because they make all our favorite toys?
You are referring to the most favored nations clause. However, Apple's agreement with the publishers did not require other retailors to charge the same price. It required publishers to make the price for a particular new release book offered to Apple uniform with all retailers. Apple essentially said it does not want any books that other retailers can charge less or more for. Moreover, that clause benefits the publishers more than anybody else, so perhaps the publishers inserted that term.
Further, the clause might seem anti-competitive in terms of Apple, but 1) Apple had no real market power over the publishers to force them to agree to those terms (Jobs email suggests as much), 2) the terms only applied to new books, and 3) other retailers could get around the terms by buying exclusive rights to a book. Amazon currently carries lots of books Apple doesn't. That is because it has exclusives.
You are referring to the most favored nations clause. However, Apple's agreement with the publishers did not require other retailors to charge the same price. It required publishers to make the price for a particular new release book offered to Apple uniform with all retailers. Apple essentially said it does not want any books that other retailers can charge less or more for. Moreover, that clause benefits the publishers more than anybody else, so perhaps the publishers inserted that term.
Further, the clause might seem anti-competitive in terms of Apple, but 1) Apple had no real market power over the publishers to force them to agree to those terms (Jobs email suggests as much), 2) the terms only applied to new books, and 3) other retailers could get around the terms by buying exclusive rights to a book. Amazon currently carries lots of books Apple doesn't. That is because it has exclusives.
You said, "Apple essentially said it does not want any books that other retailers can charge less or more for."
That's an interesting take on it that I've never seen anyone else claim...that Apple simple said don't sell your book on iTunes if you can't guarantee Amazon won't sell it for less. That would be a convenient interpretation. BTW, as I understood it, it wasn't charge "less or more". It was strictly that they couldn't sell it for less than Apple.
Also, "It required publishers to make the price for a particular new release book offered to Apple uniform with all retailers."
Are you referring to the cost to the retailer or the cost to the consumer. If Apple is requiring uniform consumer prices for all retailers, that to me sounds a lot like price fixing. Granted, the price fixing would be by the publisher (perhaps why they've all settled), but is Apple potentially liable for orchestrating it?
Again, I'm not saying Apple is guilty, but if we were talking about an oil companies getting together and telling all the independent gas stations they had to have the same prices/gallon and it couldn't be less than the oil company's other retail outlets, we'd all be screaming for the goverment to at least take a look at what was going on.
If Apple is requiring uniform consumer prices for all retailers, that to me sounds a lot like price fixing.
That's what the agency model is. By itself, there's nothing illegal about it because there is room to negotiate the wholesale prices. But when combined with the "most favored nation" clause, they wound up fixing both the retail price and the wholesale price. That's why there was an issue.
Whether the publishers coordinated this, and whether Apple was involved are the questions.
Comments
All settlements are,regardless of the case. Many folks forget this
A main issue seems to be the most favored clause. But this was something Amazon had and got away with for years. Heck Amazon still has it. But no one seems to care about that or the predatory pricing claims etc
Which has nothing to do with Apple and no one has proof otherwise.
If the publishers were pissed about Amazons price games and decided in pack to say they wanted the terms changed or they weren't renewing contracts that is on them. Especially if there is proof they had a meet etc. if it happened that they each on their own took this stance that's a different game.
And really the EU thing isn't that big of a victory since after two years price control goes back to the publishers.
I won't label anyone guilty that hasn't been proven guilty but I will say that there's a high probability that the publishers are. Most if not all of these publishers are in New York and in close proximity of each other. The CEOs all know each other quite well and they probably attend each other's parties and other functions. It's quite possible that they banded together and used a viable threat (Apple) to get more favorable terms.
I think you overestimate the financial strength of the publishers. Amazon has them by the short ones.
I never said Apple was actively in on it, but in cases like this is that they're determined on a "balance of probabilities”
Quote:
Originally Posted by dasanman69
I thought the same thing but then I was given this link.
http://www.engadget.com/2010/04/01/amazon-agrees-to-agency-pricing-model-with-two-more-publishers/
Ok, then why isn't Amazon being investigated since it appears they did the same thing the DOJ is saying Apple did? Did those two publishers work independently with Amazon? Did they work together?
Nothing wrong with agreeing with the agency model, but the publishers getting together to force that agreement is.
I'm still confused how this is illegal? If you wanna sell with a different model, why is that illegal? If it works, it'll sell. if it doesn't work, it won't sell.
Tesla sells directly to consumers. Apple sells directly to consumers. But Dell sells via a middle man (i.e. best buy) and Chevys sell via local dealerships as middle men. One isn't more illegal than the other. They should be free to sell it how they want.
Okay, so usually when a corporation messes up, I'm in favor of punishing them. But the whole ebook price fixing thing, I really don't see anything wrong here, especially b/c there's competition and not a monopoly. I don't even think customers even care. The only people who seem to be upset at this is greedy divisions of the government.
Because most pro-Apple web sites that report on this leave out the part where the agreements between Apple and the publishers also dictated the prices Amazon was allowed to sell the books for (ie, not for less than the prices on iTunes). To use one of your examples, that would be like Best Buy dictating the price any other reseller of Dell computers was allowed to charge. So the comment above that "especially b/c there's competition" is no longer true because Amazon was no longer allowed to sell books at a lower price (at a loss if they wanted to). This reduces competition. I believe the whole "agency vs wholesale" thing has nothing to do with one being better or one being illegal and the other one not. Both are perfectly valid business models. The question is one of collusion. Did Apple orchestrate an industry-wide effort to increase prices to consumers (regardless of how they might have gone about doing it or what business models they followed)? Oil companies colluding to set higher gas prices, airlines getting together to coordinate higher airfares, etc, etc...these things should rightly piss off consumers. If (**IF**) Apple did the same thing, then shouldn't they be held accountable? I'm not saying Apple is guilty, but shouldn't we find out? Or are we giving Apple a free pass because they make all our favorite toys?A main issue seems to be the most favored clause. But this was something Amazon had and got away with for years. Heck Amazon still has it. But no one seems to care about that or the predatory pricing claims etc
As I undertand it (could be wrong) the "most favored" clauses people refer to are about the prices the producer charges the reseller. Nothing to do with the prices to the consumers. So Amazon may have told the publishers that they want their best wholesale price offered to any other reseller. But to my knowledge, they've never gone farther and tried to dictate the lowest price another reseller could sell to the consumer. Each reseller is allowed to set their own profit margin. Apple is accused of going that one step further and dictating other resellers (ie, Amazon's) price to the consumer.They did no such thing.
The agreement simply said that if they couldn't offer a lower price to Amazon, they had to give Apple the same price.
Most Favored Nation clauses have been upheld by the US court system as being completely legal.
Quote:
Originally Posted by Wiggin
Because most pro-Apple web sites that report on this leave out the part where the agreements between Apple and the publishers also dictated the prices Amazon was allowed to sell the books for (ie, not for less than the prices on iTunes). To use one of your examples, that would be like Best Buy dictating the price any other reseller of Dell computers was allowed to charge. So the comment above that "especially b/c there's competition" is no longer true because Amazon was no longer allowed to sell books at a lower price (at a loss if they wanted to). This reduces competition. I believe the whole "agency vs wholesale" thing has nothing to do with one being better or one being illegal and the other one not. Both are perfectly valid business models. The question is one of collusion. Did Apple orchestrate an industry-wide effort to increase prices to consumers (regardless of how they might have gone about doing it or what business models they followed)? Oil companies colluding to set higher gas prices, airlines getting together to coordinate higher airfares, etc, etc...these things should rightly piss off consumers. If (**IF**) Apple did the same thing, then shouldn't they be held accountable? I'm not saying Apple is guilty, but shouldn't we find out? Or are we giving Apple a free pass because they make all our favorite toys?You are referring to the most favored nations clause. However, Apple's agreement with the publishers did not require other retailors to charge the same price. It required publishers to make the price for a particular new release book offered to Apple uniform with all retailers. Apple essentially said it does not want any books that other retailers can charge less or more for. Moreover, that clause benefits the publishers more than anybody else, so perhaps the publishers inserted that term.
Further, the clause might seem anti-competitive in terms of Apple, but 1) Apple had no real market power over the publishers to force them to agree to those terms (Jobs email suggests as much), 2) the terms only applied to new books, and 3) other retailers could get around the terms by buying exclusive rights to a book. Amazon currently carries lots of books Apple doesn't. That is because it has exclusives.
You are referring to the most favored nations clause. However, Apple's agreement with the publishers did not require other retailors to charge the same price. It required publishers to make the price for a particular new release book offered to Apple uniform with all retailers. Apple essentially said it does not want any books that other retailers can charge less or more for. Moreover, that clause benefits the publishers more than anybody else, so perhaps the publishers inserted that term.
Further, the clause might seem anti-competitive in terms of Apple, but 1) Apple had no real market power over the publishers to force them to agree to those terms (Jobs email suggests as much), 2) the terms only applied to new books, and 3) other retailers could get around the terms by buying exclusive rights to a book. Amazon currently carries lots of books Apple doesn't. That is because it has exclusives.
You said, "Apple essentially said it does not want any books that other retailers can charge less or more for."That's an interesting take on it that I've never seen anyone else claim...that Apple simple said don't sell your book on iTunes if you can't guarantee Amazon won't sell it for less. That would be a convenient interpretation. BTW, as I understood it, it wasn't charge "less or more". It was strictly that they couldn't sell it for less than Apple.
Also, "It required publishers to make the price for a particular new release book offered to Apple uniform with all retailers."
Are you referring to the cost to the retailer or the cost to the consumer. If Apple is requiring uniform consumer prices for all retailers, that to me sounds a lot like price fixing. Granted, the price fixing would be by the publisher (perhaps why they've all settled), but is Apple potentially liable for orchestrating it?
Again, I'm not saying Apple is guilty, but if we were talking about an oil companies getting together and telling all the independent gas stations they had to have the same prices/gallon and it couldn't be less than the oil company's other retail outlets, we'd all be screaming for the goverment to at least take a look at what was going on.
Quote:
Originally Posted by Wiggin
If Apple is requiring uniform consumer prices for all retailers, that to me sounds a lot like price fixing.That's what the agency model is. By itself, there's nothing illegal about it because there is room to negotiate the wholesale prices. But when combined with the "most favored nation" clause, they wound up fixing both the retail price and the wholesale price. That's why there was an issue.
Whether the publishers coordinated this, and whether Apple was involved are the questions.