Apple to appeal e-book decision, maintains company did 'nothing wrong'

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  • Reply 61 of 72
    airbubbleairbubble Posts: 105member
    Quote:
    Originally Posted by Victory2013 ?

    Take off your apple shaped and shaded glasses. The evidence was strong against Apple. The publishers knew it and settled but Apple was to arrogant and took a chance and Apple lost.


    You do know that this was all started by Google who preempted Amazons own look at this model in 2009?
    Also many forums within amazon on them hiking prices even before Apple entered the market!
    Most have been deleted but you may find via search-engine:

    http://www.amazon.com/forum/kindle/ref=cm_cd_search_res_ti?_encoding=UTF8&cdForum=Fx1D7SY3BVSESG&cdPage=1&cdSort=oldest&cdThread=TxBY0I92SPJUXL#Mx23STMA0NBRBLJ


    http://www.mobileread.com/forums/showthread.php?t=6645


    http://www.amazon.com/forum/kindle/ref=cm_cd_search_res_ti?_encoding=UTF8&cdForum=Fx1D7SY3BVSESG&cdPage=1&cdSort=oldest&cdThread=Tx28MXH5V1SE8X2#Mx2WU1UTSHE7RGQ

    http://www.amazon.com/forum/kindle/ref=cm_cd_search_res_ti?_encoding=UTF8&cdForum=Fx1D7SY3BVSESG&cdPage=1&cdSort=oldest&cdThread=TxBY0I92SPJUXL#Mx23STMA0NBRBLJ
  • Reply 62 of 72
    malaxmalax Posts: 1,598member

    Quote:

    Originally Posted by philgar View Post


    maybe the reason you found the books cheaper on amazon is because the publishers of those books admitted they were guilty of price fixing, and have since reverted to their previous pricing agreements.  Under the agreement signed with apple, Amazon was NOT ALLOWED to price their books less than a fixed price, and apple would be able to buy their books for 30% less than that fixed price.  As apple charges a 30% premium on content, that would mean the CHEAPEST amazon could sell their books was at the same price apple was selling their books.  Under the old agreement, amazon could sell their books at whatever price they wanted to (you know... competition), which meant they could accept a 20% margin and sell their books for less than apple.  


     


    The book publishers admitted they were breaking the law almost immediately when the government went after them, so the illegal price fixing scheme wasn't in effect for very long.  The funniest part about this case is watching the apple zealots defend apple here when at the end of the day this will make next to NO difference in apple's bottom line.  Apple has no change of changing to the favorable pricing agreements they wanted, and if they admitted to being guilty at first, there would have been a small slap on the wrist, and a fine (which would likely be so small that it wouldn't remotely impact apple's profits).  Now they're spending millions fighting this case, and they really have no hope of winning (where winning is defined as using the pricing they want).  I just don't see why they're bothering, and I hope that if they're found guilty (assuming it goes to appeal) the judges slap down a far harsher punishment on apple for their arrogance in this matter.


     


    Phil



     


    You asked where you "logic" is wrong after I said that you were factually wrong.  So here are the things that you assert as facts that are wrong or misleading.


     


    "Under the agreement signed with apple, Amazon was NOT ALLOWED to price their books less than a fixed price"   This is not true (capitalization or not).  Point to any "agreement signed with apple" that says what other retailers are allowed to do.


     


    "As apple charges a 30% premium on content"  Except that Apple doesn't set the price and therefore doesn't "charge a premium" of any type.  I sell a few apps through the App Store and Apple takes 30%.  They aren't charging a premium.


     


    "Under the old agreement, amazon could sell their books at whatever price they wanted to (you know... competition), which meant they could accept a 20% margin and sell their books for less than apple."  They still could.  But Apple would have the right to lower their prices too (you know... competition).  And as clearly shown in the DoJ case, Amazon wasn't accepting a 20% margin.  In every example the DoJ showed, Amazon was selling books for LESS than they were paying the publishers.  They were selling books for a loss.  Wonder why.  Must be their charitable mission.  Or perhaps they had an interest in maintaining their defacto monopoly on eBooks.  Funny that Barnes and Noble got out of the eBook reader business recently because their Nook couldn't compete.  Huh.


     


    "The book publishers admitted they were breaking the law almost immediately" Technically they didn't admit that.  They agreed to accept a long list of terms to avoid a trial.  Obviously they weren't optimistic about their chances in court, but they didn't "admit" that they were breaking the law.


     


    " this will make next to NO difference in apple's bottom line"   This is true.  Most of us just think it's bogus that Apple got called on the carpet for making reasonable agreements with the publishers.  It's pretty clear that the publishers did any conspiring that happened on their own using Apple as a tool.


     


    "Apple has no change of changing to the favorable pricing agreements they wanted"   We'll see.  Agency models are explicitly still allowed; it's the MFN part that's a no-no.


     


    "Now they're spending millions fighting this case, and they really have no hope of winning (where winning is defined as using the pricing they want)."  Three parts to that.  A. "millions" will make "next to NO difference in apple's bottom line" so who cares, right?  B. They have a non-trivial chance of winning on appeal.  C. Winning is not defined as using the pricing they want; it's defined as not losing and being forced to accept a bunch of restrictions that the DoJ would insist on.


     


    I hope that if they're found guilty (assuming it goes to appeal) the judges slap down a far harsher punishment on apple for their arrogance in this matter.   Fortunately for all of us, the justice system doesn't work that way.  "You can appeal your manslaughter conviction Mr. Falsely Accused, but if you lose your appeal, it'll be upgraded to 2nd degree murder and then 1st degree if you persist in your arrogance."


     


    If your facts were more accurate, your logic would be worth considering.

  • Reply 63 of 72
    koopkoop Posts: 337member

    Quote:

    Originally Posted by sac2dude View Post


    Yep, you must be right.   We're all simply Apple-haters.  Obviously myself, the judge, the DOJ...  (Does this mean I'll have to sell my Macbook?)  image


     


    Or perhaps you're the one in denial and everyone else is making an educated decision based on the presented evidence in the case?


     


    It's okay to like the products a company makes, yet be critical of decisions that seem short-sighted or surprisingly daft given the pay-grade of the executives that work at the company.    You don't have to be "all in" (aka. "a fanboy"),  having perspective is a healthy thing.



    Quote for the year. Should be on the front of every Apple Insider Article.

  • Reply 64 of 72
    froodfrood Posts: 771member

    Quote:

    Originally Posted by malax View Post


     


    That's a pretty good summary, but perhaps with the motivations wrong.


     


    Apple literally didn't care what the prices were.  They simply wanted to sell box using their simple 70-30 model.  They didn't want to become a full-blown old-school retailer having Apple staff figuring out prices.  Like with the App Store, it's better for Apple if they let the providers of the content decide on pricing and Apple just takes 30% off the top.  That was their motivation, period.  If they could have signed up one publisher under those terms, they would have been happy to.  Two publishers, better.  Three? Sure.  So they went to each publisher and tried to convince them into adopting that model.  Obviously you don't pitch something by telling the party "here's why this is good from MY perspective" you figure out arguments that will be persuasive to them.  So obviously if the publishers are used to making $10 a book, you explain why it's a win-win if hey sell it at your store for $13.  If after the deals are signed, competition forces the book prices down to $10 or even $5 Apple wouldn't care.  They would be just as happy selling a million books at $5 as half a million at $10.  So that's the part about "conspiring to raise prices" that pissed Apple off when they were charged with it.  In their minds they literally had no interest in conspiring to raise prices; they just wanted a way to enter the market using the business model that works for them.  They worked with each publisher separately and tried for the best.  In retrospect, you wonder how the case would have gone (or if their would have been a case) if they had just published a statement on their Web site: "If anyone wants to sell books in the iTunes store where you set the price, give us 30% and agree that if someone else charges a lower price we can match it, let us know, we're ready to sign the deal."  That is exactly what Apple did, but less publicly.  And somehow that is illegal.



     


    Someone had a link to the DOJ evidence and each piece individually may not say much, but the overall picture is clear.  They all knew exactly what they were doing.  I was a little surprised by the verdict as Apple was pretty crafty all along the way with a few major flubs from all parties -Steve, the publishers, Eddy.


     


    Apply this to another market...  Apple decides to sell cars at its new iCar store.  They insist car dealers give them 30 percent.  Dealers who sell a car for 50000 would now have to sell it for 57500 in order to make the same profit.  Pundits might laugh at Apple and ask the CEO how he expected to sell any cars for 57500 when one click away the car was selling for 50000.  His response of 'they won't be' taken in the context of him already taking steps to ensure they have to raise prices everywhere would be a pretty big mistake by itself.  A manufacturer saying 'I cant believe he just said that on public TV, how dumb, we're going to get caught'   Obviously if only Ford  raised its prices by 30 percent and no one else did, Ford would sell very few cars.  There is no way they would sign up for that unless Apple got every other major car manufacturer on board.


     


    So after the success and proven model of iBooks, Apple launches iCars with the same 30 percent margin and MFN clause.  Overnight all car prices jump up roughly 30 percent everywhere.  Apple would be a hero for doing this?  Apple would be making more.  Check.  Car manufacturers would be making more.  Check.  Consumers would be paying more, but hey, thats what we all want, right?

  • Reply 65 of 72
    There's no way this will not be upheld on appeal, it would give Apple and everyone else licence to engage in antitrust behaviour via a third party. Rightly or wrongly, Apple are going to be made an example of for this. Maybe they should just have settled along with everyone else - now they are the public face of this scandal.
  • Reply 66 of 72
    richlrichl Posts: 2,213member

    Quote:

    Originally Posted by anonymouse View Post


     


    The evidence was embarrassingly flimsy, to the point of being virtually non-existent. The judge decided the case before it was heard and used the thinnest of pretexts to justify the "decision". This was the definition of a kangaroo court, and is a disgrace to the entire U.S. justice system. Cases like this that are brought because of corruption, and decided based on allegations, rather than evidence, undermine all confidence in our legal system, and rightly so.



     


    The judge offered guidance. This is normal practice. You make wild accusations about corruption despite having a limited understanding of how the US legal system works. I guess that's par for the course on the internet though.

  • Reply 67 of 72


    Apple said they created more competition. The judge said Apple was anti-competitive.


    Apples actions restricted options for pricing, but increased other options.


     


    The judge seems to think the only competition on price counts. 


    Apple is not allowed to compete any other way.

  • Reply 68 of 72
    anonymouseanonymouse Posts: 6,660member

    Quote:

    Originally Posted by RichL View Post


     


    The judge offered guidance. This is normal practice. You make wild accusations about corruption despite having a limited understanding of how the US legal system works. I guess that's par for the course on the internet though.



     


    There's no way this case would have ever come to trial without someone at DoJ being bought by Amazon. The so-called "evidence" in this case is absurdly weak. The "facts" presented by the DoJ are an alternate reality. There is no possible doubt that Amazon twisted arms and paid for this DoJ action. The only question is whether the judge was also bought or just stupid.

  • Reply 69 of 72
    anonymouseanonymouse Posts: 6,660member

    Quote:

    Originally Posted by Scaramanga89 View Post



    There's no way this will not be upheld on appeal, it would give Apple and everyone else licence to engage in antitrust behaviour via a third party. Rightly or wrongly, Apple are going to be made an example of for this. Maybe they should just have settled along with everyone else - now they are the public face of this scandal.


     


    The example made here is that the DoJ can be bought and made to do the bidding of anyone willing to do so, like Amazon.

  • Reply 70 of 72
    malaxmalax Posts: 1,598member

    Quote:


    Originally Posted by Frood View Post


     


    So after the success and proven model of iBooks, Apple launches iCars with the same 30 percent margin and MFN clause.  Overnight all car prices jump up roughly 30 percent everywhere.  Apple would be a hero for doing this?  Apple would be making more.  Check.  Car manufacturers would be making more.  Check.  Consumers would be paying more, but hey, thats what we all want, right?



     


    Except that's not how markets work.  Prisoners' Dilemma and all that.  It's hard for collaborators/conspirators to avoid the temptation to compete and it's even harder to prevent outsiders from coming in an exploiting the opportunity created by artificially high prices.  (Except in heavily regulated markets with high barriers to entry, such as airlines.)


     


    Also, I'm not saying that everyone (or even consumers) would be better off it Apple gets its way on all things.  I just don't like that heavy handed government bureaucrats get to selectively second guess reasonable business practices.  And inviting publishers to sell their works via an agency model with a MFN clause seems reasonable.


     


    Ironically, based on the settlement agreement I read last night at least, it appears that Apple first came to the publishers proposing a wholesale model.  It was the publishers who suggested to Apple that an agency model would be a win-win.  In that version of the story Apple is a sap who would duped into a conspiracy not of their own making.  So that sucks for them.

  • Reply 71 of 72
    russellrussell Posts: 296member
    Quote:
    Originally Posted by anonymouse View Post

     

    There's no way this case would have ever come to trial without someone at DoJ being bought by Amazon. The so-called "evidence" in this case is absurdly weak. The "facts" presented by the DoJ are an alternate reality. There is no possible doubt that Amazon twisted arms and paid for this DoJ action. The only question is whether the judge was also bought or just stupid.





    You're the one that's living in an alternate reality.



    Apple admitted they could not compete with Amazon so they colluded with publishers to raise prices.
    The DOJ lawyers proved it.
  • Reply 72 of 72
    philgarphilgar Posts: 93member

    Quote:

    Originally Posted by malax View Post


     


    That's a pretty good summary, but perhaps with the motivations wrong.


     


    Apple literally didn't care what the prices were.  They simply wanted to sell box using their simple 70-30 model.  They didn't want to become a full-blown old-school retailer having Apple staff figuring out prices.  Like with the App Store, it's better for Apple if they let the providers of the content decide on pricing and Apple just takes 30% off the top.  That was their motivation, period.  If they could have signed up one publisher under those terms, they would have been happy to.  Two publishers, better.  Three? Sure.  So they went to each publisher and tried to convince them into adopting that model.  Obviously you don't pitch something by telling the party "here's why this is good from MY perspective" you figure out arguments that will be persuasive to them.  So obviously if the publishers are used to making $10 a book, you explain why it's a win-win if hey sell it at your store for $13.  If after the deals are signed, competition forces the book prices down to $10 or even $5 Apple wouldn't care.  They would be just as happy selling a million books at $5 as half a million at $10.  So that's the part about "conspiring to raise prices" that pissed Apple off when they were charged with it.  In their minds they literally had no interest in conspiring to raise prices; they just wanted a way to enter the market using the business model that works for them.  They worked with each publisher separately and tried for the best.  In retrospect, you wonder how the case would have gone (or if their would have been a case) if they had just published a statement on their Web site: "If anyone wants to sell books in the iTunes store where you set the price, give us 30% and agree that if someone else charges a lower price we can match it, let us know, we're ready to sign the deal."  That is exactly what Apple did, but less publicly.  And somehow that is illegal.



     


     


    What you say makes a lot of sense, but it has one fatal flaw.  No publisher could give Apple the most favored nation clause without first changing their agreement with Amazon.  While you can argue otherwise, there is no way to guarantee that competing stores don't undercut apple's prices while the competitors were buying books on the wholesale model.  Amazon had no interest in switching from the wholesale model to the agency model, and if any single book publisher told amazon they had to change their pricing model, amazon would likely have told the publisher to take a hike. Amazon knew that the publishers needed amazon's book store more than amazon needed any individual publisher.


     


    The only way the publishers could change their agreement with amazon was by conspiring together to do this at the same time.  Amazon couldn't afford to lose all the publishers at once, as that would be highly detrimental to their business model.  It was clear from the case that the publishers did this conspiring (and the publishers backed off the second the DOJ went after them).  Apple was in a position to encourage the publishers to work together, as Apple's book store could not get off the ground (with apple's 30% cut) unless the publishers conspired together.  The judge looked at the evidence, and it was clear that Apple helped arrange this, and facilitated the transition of the publishers to the agency model.  Whether or not Apple directly communicated between the publishers allowing them to know how the others were acting would be highly damning to apple, however without direct evidence of this, it is clear that the conspiracy between the publishers helped apple out tremendously (as their bookstore couldn't exist without it).  Apple had everything to gain by allowing the book publishers to conspire, and if nothing else, they did not work to prevent the book publishers from conspiring together, and in fact encouraged it.  Apple knew what the book publishers would have to do to use their model, and apple encouraged those actions (remember if you are with friends who rob a store, and you don't actively participate but are with them, don't stop them, and stay by them, you are also guilty).  You can try to deny it all you want, but the courts have evaluated the case and made their ruling against apple already.  


     


    While everyone here wants to shout that what amazon was doing was also unfair, that point is completely irrelevant.  If you think someone else is breaking the law, it does not give you the right to break the law in retaliation.  If Apple really thought Amazon was pursuing unfair practices, they could have taken them to court over it.  What apple did instead was to provide a means for the publishers to conspire against Amazon.  All arguments about amazon cheating etc are completely irrelevant to the case at hand.  All whining about the law being wrong/unfair are also irrelevant.  Just because a law is wrong doesn't give a company the right to blatantly ignore it.  If you really believe so strongly against the law, attempt to do something about it, and don't argue that the law should apply to amazon, or apple's competitors (such as microsoft) but not apply to apple.


     


    Phil

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