Penguin Books CEO gives mixed testimony in Apple e-books suit

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Comments

  • Reply 21 of 67
    solipsismxsolipsismx Posts: 19,566member
  • Reply 22 of 67
    ericthehalfbeeericthehalfbee Posts: 4,078member
    Of course the Penguin CEO would give "mixed testimony". ALL testimony is mixed when you look at both sides (examination and cross examination).

    Interesting Apple took the high ground, refusing to comment until the trial while the DOJ has been releasing "one side" of the evidence in bits and pieces. I can't wait to hear what happens with the Jobs e-mails since he isn't here to clarify them. Pretty weak evidence, IMO.
  • Reply 23 of 67
    solipsismxsolipsismx Posts: 19,566member
    I just found a picture of the procession's legal defense…

    [IMG ALT=""]http://forums.appleinsider.com/content/type/61/id/26137/width/350/height/700[/IMG]
  • Reply 24 of 67
    herbapouherbapou Posts: 2,221member

    Quote:

    Originally Posted by timgriff84 View Post


    It has essentially fixed prices because it's started a rule where no other retailers can sell a product cheaper than Apple. In turn no other company would want to be more expensive than Apple so the price is fixed the same everywhere. The fact that the price is chosen by Penguin isn't relevant as it isn't there price that there's an issue with.


     


    These rules effectively remove any price competition between the retailers on books as none of them would be able to lower the price for special offers etc.



     


    This is what I think too, regardless of if that MFN clause is legal or not. The end result is this. If the MFN clause is legal than the law needs to be changed. What Apple is doing is trying to transfert its cut rate to the publisher. The Publisher are left with the hot patato of dealing with consumer pricing and resellers rates. To me its simple, if Apple takes a higher cut than Amazon, then why cant the price be higher in the ibookstore? Its Apple problem, not the pusblisher problem. 


     


    On the other hand, the Amazon model was not clean either. Dumping a book at $9.99 when you trying to sell a new release hardcopy at $25 hurts the publishers.


     


    another interesting question would be to know if this MFN claused is used in the Music and Apps stores.

  • Reply 25 of 67
    gatorguygatorguy Posts: 20,755member
    ^ "especially when used by a dominant buyer"

    So Amazon then?

    Edited: Meant for GG.

    It's not just the eBook market getting a close-up exam over the Most-Favored-Nation clause. There's even more FTC and DoJ attention being given to similar clauses invoked by health insurance providers. BlueCross/BlueShield hardly holds a monopoly position in health insurance. In fact they barely crack the top 10 in market share. Yet they've attracted antitrust concerns and a DoJ lawsuit that's being closely watched, challenging their use of MFN as an anti-competitive practice.
  • Reply 26 of 67
    struckpaperstruckpaper Posts: 702member


    I fail to see understand why DoJ is being lambasted here. It seems to me that their case has some merit to it. Possibly over zealous, but it's so apparent that there is indeed some logic in their objectives.


     


    Perhaps folks here, in addition to be Apple-biased, are only seeing this as an Amazon v. the world situation. DoJ, I believe, is thinking of other distributors and retailers of books.

  • Reply 27 of 67
    wigginwiggin Posts: 2,265member
    Quote:
    Originally Posted by MattBookAir View Post

    The DOJ views Amazon's model as benefitting the consumer, which it probably does in the short term. But in the medium term it destroys quality publishing, by devaluing quality content. Of course it has also led to a de facto monopoly by Amazon, but the DOJ would claim that's a separate issue, and maybe they'll pursue them next. If Amazon were broken up into separate entities, I wonder if selling books as loss leaders would still be a viable practice.



    In Germany, the agency model was actually required by law, and has meant bookshops were able to survive much longer (not being undercut by Amazon), and publishers can afford to publish and develop a much broader range of content (which they do).

     

    An honest question...exactly what laws does everyone think Amazon has violated? Monopolies are not automatically illegal. And I would go so far as to suggest that "ebooks" are not a market onto themselves. Doesn't everyone remember when iTunes Store had the vast majority of of the downloadable music market? When people started complaining about Apple's "monopoly" many of the same people posting here were saying that can't be because you can still buy CDs. Well, I can still buy paper books. And I often do because they are CHEAPER than the ebooks!



    And remember when the music publishers were complaining that Apple was ruining the value of their product by selling single songs all for the same price? Sound similiar to book publisher's complaints about Amazon? Apple is often credited here for saving the music industry from themselves. And Steve Jobs several years ago said book publishing was dead. But then Amazon and the Kindle and ebooks came along. It's not a perfect comparison, but there are a lot of similarities. Enough that a little objectivity is in order, I think.



    You may not like Amazon. That's fine, don't shop there. But that doens't make their business model illegal.
  • Reply 28 of 67
    jungmarkjungmark Posts: 6,705member
    gatorguy wrote: »
    FWIW:
    http://www.ftc.gov/opa/2012/08/mfn.shtm
    "The most commonly used MFN provisions guarantee a customer that it will receive prices that are at least as favorable as those provided to other buyers of the same seller, for the same products or services. Although at times employed for benign purposes, MFNs can under certain circumstances present competitive concerns. This is because they may, especially when used by a dominant buyer of intermediate goods, raise other buyers’ costs or foreclose would-be competitors from accessing the market. Additionally, MFNs can facilitate collusion and stabilize coordinated pricing among sellers."

    Even someone as experienced at contract law as yourself might still be able to learn a few new things from researching the subject. Stuff changes.

    Since when was Apple a dominant player in the ebook market? Even more impressive, It were dominant prior to entering the market.
  • Reply 29 of 67
    gatorguygatorguy Posts: 20,755member
    jungmark wrote: »
    Since when was Apple a dominant player in the ebook market? Even more impressive, It were dominant prior to entering the market.

    The group of eBook publishers was the "dominant player", altho the statement you're using in your argument doesn't make industry dominance a requirement anyway does it? Apple got swept in accused of colluding with that "dominant" group. It shouldn't be that hard to understand. It doesn't of course mean they'll be found guilty of anything.
  • Reply 30 of 67
    hill60hill60 Posts: 6,992member

    Quote:

    Originally Posted by StruckPaper View Post


    I fail to see understand why DoJ is being lambasted here. It seems to me that their case has some merit to it. Possibly over zealous, but it's so apparent that there is indeed some logic in their objectives.


     


    Perhaps folks here, in addition to be Apple-biased, are only seeing this as an Amazon v. the world situation. DoJ, I believe, is thinking of other distributors and retailers of books.



     


    Such as the publisher of the best selling 50 Shades series, who sold their books on iBooks for $9.99?


     


    Since Apple opened their iBooks store the price of eBooks fell from $7.97 on average to $7.34.


     


    Which coincided with the "other distributors and retailers" of eBooks increasing their market share from 10 to 40%.


     


    Apple actually fostered competition along with more choice for consumers.

  • Reply 31 of 67
    gatorguygatorguy Posts: 20,755member
    hill60 wrote: »
    Such as the publisher of the best selling 50 Shades series, who sold their books on iBooks for $9.99?

    I don't remember which of the five publishers who made the MFN clause a requirement and subsequently accused of anti-trust violations supplied that particular series of books. Maybe you can remind me?
  • Reply 32 of 67
    hill60hill60 Posts: 6,992member

    Quote:

    Originally Posted by Gatorguy View Post





    I don't remember which of the five publishers who made the MFN clause a requirement and subsequently accused of anti-trust violations supplied that particular series of books. Maybe you can remind me?


     


    Perhaps it was one of the other publishers who were also free to sell their wares in the iBooks store, for whatever price they wanted.


     


    Seeing as how Apple set it up as a free market.

  • Reply 33 of 67
    richard getzrichard getz Posts: 1,142member

    Quote:

    Originally Posted by Jessi View Post



    So, let me get this straight. Apple has a deal where publishers can set prices, and they have to offer the lowest price on iBookstore. And the DoJ claims this "hurt consumers" because it "fixed prices"? Flexibile pricing with a proviso that the consumer be given the lowest price offered anywhere is neither fixed nor hurting consumers.



    This persecution is so illogical it proves that it is politically motivated.



    Which is why we need to repeal the entirety of anti-trust regulations--which have always been used anti-competitively to favor one business over another-- in this case, near monopolist Amazon is being defended from having to compete with Apple when Apple dared to offer publishers better terms.



    Really, people should belong in jail for this-- and I mean, people in the government. It's criminal.


     


     


     


    Quote:


    that holds a publisher can set content pricing as long as it doesn't sell said content to another retailer for less.



     


    I agree as I did not understand this either and how this was price fixing. Furthermore, price fixing usually applies to fixing prices upward, not down. I don't see either how Apple making sure it has the lowest available pricing on the market, hurts customers. 

  • Reply 34 of 67
    timmydaxtimmydax Posts: 284member
    gatorguy wrote: »
    The group of eBook publishers was the "dominant player", altho the statement you're using in your argument doesn't make industry dominance a requirement anyway does it? Apple got swept in accused of colluding with that "dominant" group. It shouldn't be that hard to understand.

    This knotted contrived defensiveness is hard to understand. Which dominant group did apple collude with?

    It doesn't of course mean they'll be found guilty of anything.

    Oh thank god you hedged your bets. It would be awful if you were found to be completely and utterly wrong in thought or opinion. :lol:
  • Reply 35 of 67
    richard getzrichard getz Posts: 1,142member

    Quote:

    Originally Posted by Jessi View Post


    FWIW, in the 1990s when Japanese companies were selling RAM below "market cost", which greatly benefited consumers of RAM and american businesses selling computers with RAM, the DoJ and others claimed that this was "hurting consumers" and was "dumping."


     


    It's so political... they just claim whatever they want. 


     


    But no doubt, someone subsidizing something benefits the buyers.  We really need to shut down the DoJ.  All the money they waste on market manipulation like this hurts consumers, and that's on top of the money they blow in taxes.



     


    That is slightly different. The reason why dumping is illegal is because the purpose of dumping is to undercut the competition to extinction. By dumping products on the market below cost in some instances, competition cannot compete and therefore go out of business, which leaves the dumper with (almost) all the market share and then they can set prices wherever they want. 

  • Reply 36 of 67
    gatorguygatorguy Posts: 20,755member
    timmydax wrote: »
    This knotted contrived defensiveness is hard to understand. Which dominant group did apple collude with?

    Is dominance of an industry a requirement before the DoJ can investigate anti-trust concerns? If not then the question is irrelevant isn't it?

    Oh thank god you hedged your bets. It would be awful if you were found to be completely and utterly wrong in thought or opinion. :lol:

    It would be more "awful" if a factually incorrect claim were allowed to pass for the truth. Fortunately I've no doubt every time a post of mine is wrong someone here will be nice enough to let me know so that others aren't mislead with incorrect information. :\
  • Reply 37 of 67
    richard getzrichard getz Posts: 1,142member

    Quote:

    Originally Posted by herbapou View Post



    Imo the problem is not the agency model, its the "books cant by cheaper elsewhere" rule made by Apple. The end results is the same prices everywhere. I am affraid Apple will lose this. It should be, you cant sell for a lower price BEFORE the reseller cut elsewhere. That would allow different priçes depending on the reseller cut percentage.


     


    Apple never said they could not sell for higher elsewhere, but that Apple would have the best pricing to offer their customers. And who sues someone for price fixing downward? 

  • Reply 38 of 67
    timmydaxtimmydax Posts: 284member
    gatorguy wrote: »
    Is dominance of an industry a requirement before the DoJ can investigate anti-trust concerns? If not then the question is irrelevant isn't it?

    In the case of a lack of a dominant position, it should indeed be presumed that any price fixing damages the consumer, unless proven otherwise. The problem is that this is backwards when retailers are substantially decreasing the value of the products they sell through excessively aggressive pricing. This damages the market as a whole.

    It would be more "awful" if a factually incorrect claim were allowed to pass for the truth. Fortunately I've no doubt every time a post of mine is wrong someone here will be nice enough to let me know so that others aren't mislead with incorrect information. :\

    I, for one, very much appreciate your contributions; they stop this forum from being a group of old men nodding in unison, or picking at pedantic unprovable beliefs.
  • Reply 39 of 67
    timgriff84timgriff84 Posts: 909member

    Quote:

    Originally Posted by Richard Getz View Post


     


    I agree as I did not understand this either and how this was price fixing. Furthermore, price fixing usually applies to fixing prices upward, not down. I don't see either how Apple making sure it has the lowest available pricing on the market, hurts customers. 



     


    Because by having an agreement with the publisher that all other retailers can't see the books for less than them, they are affectively forcing the publisher to have an agreement will all there other distributors that they can't sell the book for less than what Apple sells it for.


     


    So if you assume the publisher gets $5 for the book irrespective of who sells it and Apple are selling it at $7. A bookstore who wants to sell a range of books at cost price at $5 for a promotion would be prohibited as they would not be allowed to undercut Apple. The publisher wouldn't be lowering the price on Apple site as it isn't them paying for the promotion. That is fixing a price up, not down.


     


    Secondly the law is you can't agree with your competitors what the price of something is. That's what price fixing basically is. Having a contract that says a publisher must ensure all other retailers can't undercut them is basically the same as agreeing it with the other retailers.

  • Reply 40 of 67
    anonymouseanonymouse Posts: 6,580member

    Quote:

    Originally Posted by JollyPaul View Post


    I get the feeling the DOJ is more interested in a show piece win than finding the truth. Start with a conclusion and work backwards. The publishers who did wrong settled, and I bet part of that settlement was a promise to help drag Apple into their mess.



     


    If you objectively look at all the facts in this case, which includes Amazon's monopoly position in the eBook market, and near monopoly position in physical books, at the time all of this happened, you are left with only 2 possible explanations:


     


    1. The lawyers at DoJ are utterly stupid and unable to see the effects this would have on the publishing industry if they prevail.


     


    2. Someone at DoJ controlling this process is completely corrupt and either paid off by Amazon (or promised future "compensation") or they or someone close to them owns a lot of Amazon stock.


     


    Nothing but long-term, severe consumer harm and damage to the publishing industry can come from the DoJ winning this case and handing Amazon monopoly control of the entire publishing industry. And I for one don't believe the lawyers who work there are that stupid. (Although, there were those hires by the previous administration that were based on political views and not professional qualifications.) So it's very hard not to conclude that this entire proceeding stems from some utterly corrupt person or persons at the DoJ.

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