tht wrote: »
The question of why Amazon isn't sued for predatory pricing and practices is interesting.
In the Apple v DOJ eBooks trial, the DOJ said they evaluated Amazon's eBooks business and said that Amazon operated it at a profit. When asked to reveal this this information, Judge Denise Cote refused to let these findings out and said to go to the DOJ, the DOJ refused to let these findings out, and both said Amazon is not on trial. On the other hand, Judge Cote believed that Apple VP Eddie Cue and various publisher CEOs and representatives were not credible in their sworn-in, under oath testimony. Huh.
There's no proof whatsoever that Amazon makes any net income on eBooks. Considering the size of Amazon's online retail, ebooks is probably sitting in the 3rd significant digit (hundreds of millions) or maybe 4 significant digit (tens of millions) and easily covered by a rounding of an online retail number. Maybe they really do make a profit, who knows, but the chance to know is basically gone.
As long as Amazon keeps its financials inside a blackbox, it's probably impossible to figure out how well its businesses are doing and whether this or that part of Amazon makes money? Nobody knows how many Kindles have been sold. Do we even know how many ebooks Amazon have been sold? Not an estimate, but an actual reported number<span style="line-height:22px;">? Then, do we even know what those books cost Amazon?</span>
<span style="line-height:22px;">The law (DOJ) and the courts will be fumbling around for awhile figuring out what all what the digital economy is about. As it stands now, they are applying laws based on physical goods to digital goods which is crazy imo. A lot things technology companies do that they think is perfectly normal may not be right in the physical goods world, but that's what the law is entirely based on.</span>
Yeah, the regular, recurrent crashes -- on the iPad, iPhone, and OSX -- must all be just a perception issue.....
In short, you're complaining about the interface of the mobile app. That's different than the parsing of the non-mobile UI, though I don't find the present Web UI on a desktop/laptop very functional. The only difference is that it doesn't crash.
File some bugs with Huddler.
tzeshan wrote: »
First, then Apple can be sued for the App Store too.
Second, does Amazon negotiate with the publishers one at a time? Why is this needed? For most goods the manufacturers sell to the retailers at a discount to MSRP. The retailers then set a price to sell. Apple's model is fundamentally the same as this. Only that Apple decided to mark up at 30%. So Apple is not legal. The DOJ and the judge is all screwed up in their brain.
Life's too short to be 'filing bugs.' Perhaps you have the time to do stuff like that. Either something works, or it doesn't.
Let's cut this (pointless) conversation.
So many legal experts here ...
dasanman69 wrote: »
No one sued them because it was only a small sampling of ebooks that were being sold at a loss, and if the average ebook price came down after Apple entered the market then that means Amazon was selling all other ebooks at a more than healthy profit. You could've reached the same conclusion with a little more thought.
itstheinternet wrote: »
The court addresses both of these in the case. They state that Amazon has consistently run its ebook department at a profit and cheap ebooks were loss leaders. It also clearly states that the appropriate remedy for Apple was not to break the law, and so that excuse can hold no weight whatsoever.
Uh, do you think that civil offences aren't breaking the law? I have no idea what you're talking about here. Also it's like 4am and I am checking my mail before bed so I might be slow to reply.
mdriftmeyer wrote: »
File some bugs with Huddler.
States, looking for money, think they have found some. They hope it can be tripled too. With a side of fries.
Yes, but they'd better be careful not to let Tim Cook near the fries...
On topic though, I think Thomson just won the thread. Perfectly balanced and calm posts. A joy to read!
Most merchants do not attempt to resell items below cost, with the exception of temporary promotions or sales to drive foot traffic (or in the case of online "eye traffic"). Keyword there is temporary, like Cyber-Monday-temporary. At Amazon, eBooks were on a perpetual Cyber Monday sale. Most companies would go out of business doing that as standard practice. Although Apple is certainly big enough to, since it makes so much profit elsewhere, it does not play that game, nor should it. If you have a monopoly in a market, such as eBooks, and your standard pricing is so low that you are losing money just to keep competition away, that is illegal. Go look it up if you must.
Why didn't the publishers sue Amazon? Well they did complain about Amazon's pricing policies. But as much as they feared Amazon's power in the eBooks market, they were also dependent on it. Amazon sells a hell of a lot of books - including physical ones. So the publishers could grumble, but they were somewhat helpless.
It wasn't up to the publishers to sue Amazon, that's the DoJ's job, and the DoJ went after Apple instead. That's because they have a hardon against MFN clauses (which aren't illegal). Everyone here assumes Cote's verdict is a done deal, when Apple is appealing. The Supreme Court has pretty much said that price-fixing (in particular vertical price restraints) can be legal to remedy a market failure. Amazon's predatory pricing was a market failure.
For Apple, this isn't going to end until they are offered a reasonable resolution by the courts and DOJ. If they don't, it's going to the SCOTUS, and if they lose there, I doubt it's going to end there. Apple's current management will likely have to be replace before they consent. Ie, the gov't will have to destroy Apple as it currently stands today.
Just read this article from by Roger Parloff: http://features.blogs.fortune.cnn.com/2014/02/03/apple-asking-appeals-court-to-freeze-monitor/
"We now know that neither Bromwich nor Judge Cote saw his mission as narrowly as Apple did. His role, as Judge Cote has since made clear, was not merely to ensure that Apple's compliance programs were adequate "in the abstract," but that they were adequate "for Apple." This distinction was important in Judge Cote's mind because of her underlying belief, based on her trial findings, that Apple's culture was peculiarly indifferent to, if not contemptuous of, the antitrust laws. Thus, the goal, in her mind, was to reform Apple's culture, not merely to draw up new guidelines.
Bromwich knew from his private interviews with Judge Cote for the job what she envisioned. To perform his obligations as he understood them, he needed to "crawl into [the] company" and explore its "tone" and "culture," as he later informed stunned Apple representatives.
Accordingly, when Bromwich met with Apple for the first time on Oct. 22, he explained that he wanted eventually to meet with every member of Apple's executive team and board, some of them multiple times. He wanted to start in mid-November with 15 top officials, including CEO Tim Cook, senior vice president for worldwide marketing Phillip Schiller, legendary product designer Jony Ive, and board member and former U.S. vice president Al Gore, Jr."
Wow! This reads very much like an order form the North Korean leader.
tht wrote: »
<p>For Apple, this isn't going to end until they are offered a reasonable resolution by the courts and DOJ. If they don't, it's going to the SCOTUS, and if they lose there, I doubt it's going to end there. Apple's current management will likely have to be replace before they consent. Ie, the gov't will have to destroy Apple as it currently stands today.</p><p> </p><p>Just read this article from by Roger Parloff: <a href="http://features.blogs.fortune.cnn.com/2014/02/03/apple-asking-appeals-court-to-freeze-monitor/">http://features.blogs.fortune.cnn.com/2014/02/03/apple-asking-appeals-court-to-freeze-monitor/</a></p><p> </p><p>"<em><span style="color:rgb(51, 51, 51)">We now know that neither Bromwich nor Judge Cote saw his mission as narrowly as Apple did. His role, as Judge Cote has since made clear, was not merely to ensure that Apple's compliance programs were adequate "in the abstract," but that they were adequate "for Apple." This distinction was important in Judge Cote's mind because of her underlying belief, based on her trial findings, that Apple's culture was peculiarly indifferent to, if not contemptuous of, the antitrust laws. Thus, the goal, in her mind, was to reform Apple's culture, not merely to draw up new guidelines.</span></em></p><p> </p><p style="border:0px; color:rgb(51, 51, 51); padding-bottom:20px; vertical-align:baseline"><em>Bromwich knew from his private interviews with Judge Cote for the job what she envisioned. To perform his obligations as he understood them, he needed to "crawl into [the] company" and explore its "tone" and "culture," as he later informed stunned Apple representatives.</em></p><p style="border:0px; color:rgb(51, 51, 51); padding-bottom:20px; vertical-align:baseline"><em>Accordingly, when Bromwich met with Apple for the first time on Oct. 22, he explained that he wanted eventually to meet with every member of Apple's executive team and board, some of them multiple times. He wanted to start in mid-November with 15 top officials, including CEO Tim Cook, senior vice president for worldwide marketing Phillip Schiller, legendary product designer Jony Ive, and board member and former U.S. vice president Al Gore, Jr.</em>"</p>
How can Apple continue? They will have to bend over and take it, or find directors and managers that will. The fines will go up rather rapidly if they continue to stonewall.
But yes, American politics at this scale is cyclical and changes with who's in the gov't. Maybe the next DOJ after Obama's will have different priorities. After all, this is the DOJ who reasoned that the companies and banks involved in the subprime mortgage crisis of 2008 - you know the crisis that cost trillions of dollars, left millions of people unemployed or homeless - were too big to prosecute and may harm the world. Just thinking about makes the bile rise. Instead, they are very proud of this e-books prosecution, which is what, 4 orders of magnitude smaller than the subprime mortgage crisis in terms of how it affects USA citizens.
Cote is ideologically aligned with the DoJ, and the DoJ is in opposition to the Supreme Court's controversial but landmark decision in 2008 in Leegin v PSKS, which overturned 100 years of antitrust precedent which had said that price-fixing is ALWAYS illegal. Leegin changed that, making a distinction between horizontal price fixing and vertical. Horizontal is when a group of competitors collude to fix prices (like ebook publishers), but it's much more complicated when the price fixing is vertical with 2 ends of the market involved and not just 1. In some cases (eg: Leegin telling its retailers they can't discount prices) there are both pro and anti-competitive effects to price fixing, consumers may have to pay more for one brand but fixing high prices for one brand actually increases competition between brands and in the long run that's better than saying Leegin can't fix prices for their own products. This case here isn't just about the competition between suppliers (ebook publishers) being anticompetitive, it's about retailers too, and about fair competition among the ebook retailers (eg: Apple, Amazon, Sony, B&N, etc.). Antitrust law simply is not supposed to prop up monopolies.
Cote has cleverly dismissed the pro-competitive effects of the agency model on the ebook market (which broke Amazon's monopoly and made it easier for others to enter the market) by calling Apple a horizontal co-conspirator—dismissing and ignoring that the more important competition here is taking place vertically between the retailers. In doing so she glosses over that her and the DoJ's crusade against the new interpretation of antitrust laws have effectively been about restoring Amazon's monopoly position in the ebook market, and made it harder for new retail competition to enter the ebook market. It ignores that correcting a market failure (Amazon's unregulated monopoly) is good for competition.
This is all not lost among antitrust regulators, politicians, jurists, economists and other antitrust watchers. Many of whom think Cote's decision a travesty. It certainly won't be lost on the Supreme Court whose recent rulings are being dismissed by a trial court judge and a zealous DoJ. Leegin was a 5-4 decision. It's hard to know where the appellate judges go. This will be a case that either reaffirms Leegin (by reversing Judge Cote's decision), or makes an exception to it.
Could you explain how restricting price competition can make it easier for others to enter the market. If they are restrained from offering lower prices, then how do they gain market share without (for example) a huge selling tablet product that comes with their book store?
Surely what the ebook agreements did was make it easier for Apple to enter the market, and they did so in an anticompetitive fashion.
For anyone to enter the ebook market and go up against a dominant monopoly that artificially priced bestsellers at break-even or below-cost, they would have to be brain dead. Why enter a market where you can't make any money? This exclusion of new competitors from entering a market is exactly where the term anticompetitive comes from. The only players in the ebook market were those who had already been there since before Amazon cornered it. Barnes and Noble, Sony, and a few others were collectively down to 10 or 15%. That changed when the publishers forced Amazon to source ebooks using the agency model. It fixed prices yes, but it leveled the playing field among _all_ ebook retailers. Since nobody could compete on price, nobody could compete on price unfairly as Amazon had been doing.
The result was _more_ competitors entered the ebook market once making a profit became possible. There was also a radical increase in ebook production and sales and the number of titles being offered. Many would argue that would have happened anyway under Amazon's unchallenged monopoly, it was a young and exploding market, but even so, the effect remains that after the vertical price restraints of the agency model, both the number of competitors in the market increased, and the number and availability of ebooks radically exploded.
Increased competition and increased production are both pro-competitive effects that historically carry more weight than fixed prices. The Supreme Court, in its interpretation of the Sherman Antitrust Act, says both anticompetitive and procompetitive effects of any vertical price fixing scheme must be rigorously measured and weighed against the anti-competitive effect of higher prices. That's what Cote avoided doing.