Many people seem to not comprehend the issue. The issue is not the agency model (setting their "own price").
The issue is Apple's condition that no one else ever sell it for less than Apple. This eliminates competition by definition. All other stores must use the price from the iBookStore and never offer it for less. This is quite literally price fixing. Price fixing is most definitely illegal.
That's not exactly true. According to Steve Jobs the terms were that if the publishers sold their content for less to others, then Apple retained the right to also sell the book for the same price.
Your wording makes it seem like Apple was controlling the price, when in fact they weren't at all. They were making sure that their fairly large affluent user base wouldn't be unfairly gouged by the publishers. (And by affluent, I mean, willing to spend money.)
Apple's commerce model has ALWAYS been 30% (unless the content is free, then it's 0%), they don't care about price. What they do care about more than any other company, are their users and making sure they aren't being abused and taken advantage of.
A partial update on the governments assertions so far, courtesy of the WSJ:
"The suit alleges that the publishers' chief executives met starting in September 2008 or earlier "in private dining rooms of upscale Manhattan restaurants" and "no legal counsel was present at any of these meetings."
It also describes how Apple executives worked with the publishers in late 2009 and early 2010, as the iPad launch approached, to fine-tune the new pricing model. In January 2010, each of the five publishers "entered into a functionally identical agency contract with Apple that would go into effect simultaneously in April 2010," the Justice Department said.
The government said publishers "regularly communicated" to "exchange sensitive information and assurances of solidarity." They "took steps to conceal their communications with one another, including instructions to 'double delete' e-mail and taking other measures to avoid leaving a paper trail," the government said."
Apple has no right to control what prices a supplier provides to other customers. If they want a supplier to be exclusive, fine. However, Apple should not be able to interfere with other supplier contracts.
Apple isn't interfering with other supplier contracts.
This is how it works:
- Publisher sells book to Apple for sale on iBooks.
- Publisher sets retail price at $16.99
- Apple sells the book for $16.99
- Publisher also sells book to Amazon for sale as an eBook.
- Publisher sets retail price at $16.99
- Amazon sells the book for $9.99
- Apple's contract with the publisher allows Apple to also sell the book at $9.99 if they choose to.
The question is, is it illegal for Apple to match the price Amazon is selling the same book for.
I don't see anything at all wrong with this set up.
Another scenario:
- Publisher sells book to Apple for sale on iBooks.
- Publisher sets retail price at $16.99
- Apple sells the book for $16.99
- Publisher also sells book to Amazon for sale as an eBook.
- Publisher sets retail price at $9.99
- Amazon sells the book for $9.99
- Apple's contract with the publisher allows Apple to also sell the book at $9.99 if they choose to
The question here is, is it legal for Apple to go ignore the agreed price of $16.99 and match Amazon's price.
Again, I don't see anything wrong with this set up.
In both scenarios no one is forcing anyone to do anything. Publisher decides price and seller has option to sell at a loss if they so choose. What's the problem?
I honestly don't get this at all. Book prices should be fixed by the publisher, just like software prices. If you charge less then the publisher should be able to pull your distributor license. It serves a publisher no good to have distributors fighting each other over price (just devalues their IP as companies try to undercut each other.)
What exactly is the government accusing apple of? Apple came up with a better model then Amazon, publishers agreed, and now publishers want Amazon to do the same thing. How is that Apple's fault? On the other hand, if publishers didn't like the apple method and preferred amazon's, then why did they sign the agreement they did with apple?
Seems to me publishers are the ones at fault for not making up their minds.
That's not exactly true. According to Steve Jobs the terms were that if the publishers sold their content for less to others, then Apple retained the right to also sell the book for the same price.
Your wording makes it seem like Apple was controlling the price, when in fact they weren't at all. They were making sure that their fairly large affluent user base wouldn't be unfairly gouged by the publishers. (And by affluent, I mean, willing to spend money.)
Apple's commerce model has ALWAYS been 30% (unless the content is free, then it's 0%), they don't care about price. What they do care about more than any other company, are their users and making sure they aren't being abused and taken advantage of.
sure...
The problem is that, in this agency model, Apple has no intrinsic control of the prices on the iTunes store, however the public doesn't understand this. The clause is to protect Apple and the iTunes store so that it doesn't look bad when wholesale retailers, who do control their prices, lower them. It's purely about PR and the ultimate success of the store, and is basically necessary for the agency model to coexist with other retailers employing a wholesale model.
Apple should fight the US Justice department in court on this, they have more money than the USA anyways, just stretch it out for years and years and the US govt will just go bankrupt. lol
Yes and no. Apple should fight if they are told they must use wholesale not agency pricing. They should have the right to set such terms for their deals
But anything about restricting pricing on deals with other stores like favored nation terms or saying a publisher has to use Apples terms outside of Apple should be a big hell no. THAT is antitrust type behavior. If the publishers demand agency from Amazon or set the same price everywhere on their own it's not
Apple should fight the US Justice department in court on this, they have more money than the USA anyways, just stretch it out for years and years and the US govt will just go bankrupt. lol
Apple challenging the DoJ is actually going to allow the DoJ to investigate Amazon during its facts of finding. This allows the DoJ to verify both positions and later determined if it wants to withdraw or not.
A partial update on the governments assertions so far, courtesy of the WSJ:
"The suit alleges that the publishers' chief executives met starting in September 2008 or earlier "in private dining rooms of upscale Manhattan restaurants" and "no legal counsel was present at any of these meetings."
It also describes how Apple executives worked with the publishers in late 2009 and early 2010, as the iPad launch approached, to fine-tune the new pricing model. In January 2010, each of the five publishers "entered into a functionally identical agency contract with Apple that would go into effect simultaneously in April 2010," the Justice Department said.
The government said publishers "regularly communicated" to "exchange sensitive information and assurances of solidarity." They "took steps to conceal their communications with one another, including instructions to 'double delete' e-mail and taking other measures to avoid leaving a paper trail," the government said."
In short, this case is actually a case against the Publishers ``colluding'' with one another and they need to investigate Apple to find this out.
Apple isn't interfering with other supplier contracts.
This is how it works:
- Publisher sells book to Apple for sale on iBooks.
- Publisher sets retail price at $16.99
- Apple sells the book for $16.99
- Publisher also sells book to Amazon for sale as an eBook.
- Publisher sets retail price at $16.99
- Amazon sells the book for $9.99
- Apple's contract with the publisher allows Apple to also sell the book at $9.99 if they choose to.
The question is, is it illegal for Apple to match the price Amazon is selling the same book for.
I don't see anything at all wrong with this set up.
Another scenario:
- Publisher sells book to Apple for sale on iBooks.
- Publisher sets retail price at $16.99
- Apple sells the book for $16.99
- Publisher also sells book to Amazon for sale as an eBook.
- Publisher sets retail price at $9.99
- Amazon sells the book for $9.99
- Apple's contract with the publisher allows Apple to also sell the book at $9.99 if they choose to
The question here is, is it legal for Apple to go ignore the agreed price of $16.99 and match Amazon's price.
Again, I don't see anything wrong with this set up.
In both scenarios no one is forcing anyone to do anything. Publisher decides price and seller has option to sell at a loss if they so choose. What's the problem?
How about this scenario.
-Publisher sells book to Apple for $11.90
-Publisher has retail price set at $16.99
-Apple sells book at $16.99
-Publisher sells book to Amazon for $11.90
-Publisher has retail price set at $16.99
-Amazon wishes to sell said book for $15.99
-Per the publisher they aren't allowed to undercut the price. Apple's price is as low as permitted.
In other words your first scenario could not happen under the agency pricing model. If Apple is selling books at the publisher's minimum retail price, it's Amazon and every other competitor who are restricted from undercutting Apple's price which is also the publisher's price.
The DOJ complaint is awesome, and should be required reading before posting. My favorite passage so far
Quote:
6. Apple facilitated the Publisher Defendants' collective effort to end retail price competition by coordinating their transition to an agency model across all retailers. Apple clearly understood that its participation in this scheme would result in higher prices to consumers. As Apple CEO Steve Jobs described his company's strategy for negotiating with the Publisher Defendants, "We'll go to [an] agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that's what you want anyway." Apple was perfectly willing to help the Publisher Defendants obtain their objective of higher prices for consumers by ending Amazon's "$9.99" price program aslong as Apple was guaranteed its 30 percent margin and could avoid retail price competition from Amazon.
I love my Apple products, but if this stuff pans out...
Many people seem to not comprehend the issue. The issue is not the agency model (setting their "own price").
The issue is Apple's condition that no one else ever sell it for less than Apple. This eliminates competition by definition. All other stores must use the price from the iBookStore and never offer it for less. This is quite literally price fixing. Price fixing is most definitely illegal.
You could be right, but I didn't get that sense. I got, "Hey, if Amazon sells a book for $7.99 that we have for $9.99? You will lower our price to $7.99"
Debt is a resource because if we default on ours, the world economy collapses.
You can say the same for oil. Hence, debt is a resource.
A LITTLE debt isn't. Like we can grow rice in the US. But it's not prevalent enough to really be considered a staple. But elsewhere in the world?
So, if I owe a million dollars, I'm in trouble .... But if I owe a billion dollars, the bank is in trouble ........ And this is right, how? "Interesting" financial system you have there. \
-Per the publisher they aren't allowed to undercut the price. Apple's price is as low as permitted.
In other words your first scenario could not happen under the agency pricing model. If Apple is selling books at the publisher's minimum retail price, it's Amazon and every other competitor who are restricted from undercutting Apple's price which is also the publisher's price.
The Agency model doesn't fix prices. It's a perfectly legal and accepted way of determining a price. The question is the qualifier "... we also asked for a guarantee that if anybody else is selling the books cheaper than we are, then we can sell them at the lower price too."
Apple isn't setting a base price. They are asking for ability to match the pricing of other sellers.
You're right about one thing, many people seem not to comprehend the issue, and you're one of the ones who doesn't. (Actually, you do, you're just pretending not to.)
The issue is that Amazon is leveraging its dominance in online retailing generally, and traditional book selling particularly, to completely control the e-book market, drive other e-book, and traditional, booksellers out of business, and establish complete control of the publishing industry.
What world are you in?
The issue is with Apple and 5 publishers, not Amazon. The DoJ isn't anti-Apple.
The Agency model doesn't fix prices. It's a perfectly legal and accepted way of determining a price. The question is the qualifier "... we also asked for a guarantee that if anybody else is selling the books cheaper than we are, then we can sell them at the lower price too."
Apple isn't setting a base price. They are asking for ability to match the pricing of other sellers.
No Apple did not set the base price. That was the publishers. The guarantee that Apple reportedly worked out with those 5 publishers spelled out that Amazon couldn't set their own prices either. If Apple sold their books at the publisher's retail price, assuring a 30% profit rather than getting even greedier and selling above retail, they were guaranteed not to have a worry that Amazon might sell at a lower price.
It wasn't that Apple wanted the ability to match Amazon's low prices. They wanted a guarantee that they didn't have to compete with Amazon on prices...
Comments
Many people seem to not comprehend the issue. The issue is not the agency model (setting their "own price").
The issue is Apple's condition that no one else ever sell it for less than Apple. This eliminates competition by definition. All other stores must use the price from the iBookStore and never offer it for less. This is quite literally price fixing. Price fixing is most definitely illegal.
That's not exactly true. According to Steve Jobs the terms were that if the publishers sold their content for less to others, then Apple retained the right to also sell the book for the same price.
Your wording makes it seem like Apple was controlling the price, when in fact they weren't at all. They were making sure that their fairly large affluent user base wouldn't be unfairly gouged by the publishers. (And by affluent, I mean, willing to spend money.)
Apple's commerce model has ALWAYS been 30% (unless the content is free, then it's 0%), they don't care about price. What they do care about more than any other company, are their users and making sure they aren't being abused and taken advantage of.
"The suit alleges that the publishers' chief executives met starting in September 2008 or earlier "in private dining rooms of upscale Manhattan restaurants" and "no legal counsel was present at any of these meetings."
It also describes how Apple executives worked with the publishers in late 2009 and early 2010, as the iPad launch approached, to fine-tune the new pricing model. In January 2010, each of the five publishers "entered into a functionally identical agency contract with Apple that would go into effect simultaneously in April 2010," the Justice Department said.
The government said publishers "regularly communicated" to "exchange sensitive information and assurances of solidarity." They "took steps to conceal their communications with one another, including instructions to 'double delete' e-mail and taking other measures to avoid leaving a paper trail," the government said."
Apple has no right to control what prices a supplier provides to other customers. If they want a supplier to be exclusive, fine. However, Apple should not be able to interfere with other supplier contracts.
Apple isn't interfering with other supplier contracts.
This is how it works:
- Publisher sells book to Apple for sale on iBooks.
- Publisher sets retail price at $16.99
- Apple sells the book for $16.99
- Publisher also sells book to Amazon for sale as an eBook.
- Publisher sets retail price at $16.99
- Amazon sells the book for $9.99
- Apple's contract with the publisher allows Apple to also sell the book at $9.99 if they choose to.
The question is, is it illegal for Apple to match the price Amazon is selling the same book for.
I don't see anything at all wrong with this set up.
Another scenario:
- Publisher sells book to Apple for sale on iBooks.
- Publisher sets retail price at $16.99
- Apple sells the book for $16.99
- Publisher also sells book to Amazon for sale as an eBook.
- Publisher sets retail price at $9.99
- Amazon sells the book for $9.99
- Apple's contract with the publisher allows Apple to also sell the book at $9.99 if they choose to
The question here is, is it legal for Apple to go ignore the agreed price of $16.99 and match Amazon's price.
Again, I don't see anything wrong with this set up.
In both scenarios no one is forcing anyone to do anything. Publisher decides price and seller has option to sell at a loss if they so choose. What's the problem?
What exactly is the government accusing apple of? Apple came up with a better model then Amazon, publishers agreed, and now publishers want Amazon to do the same thing. How is that Apple's fault? On the other hand, if publishers didn't like the apple method and preferred amazon's, then why did they sign the agreement they did with apple?
Seems to me publishers are the ones at fault for not making up their minds.
That's not exactly true. According to Steve Jobs the terms were that if the publishers sold their content for less to others, then Apple retained the right to also sell the book for the same price.
Your wording makes it seem like Apple was controlling the price, when in fact they weren't at all. They were making sure that their fairly large affluent user base wouldn't be unfairly gouged by the publishers. (And by affluent, I mean, willing to spend money.)
Apple's commerce model has ALWAYS been 30% (unless the content is free, then it's 0%), they don't care about price. What they do care about more than any other company, are their users and making sure they aren't being abused and taken advantage of.
sure...
The problem is that, in this agency model, Apple has no intrinsic control of the prices on the iTunes store, however the public doesn't understand this. The clause is to protect Apple and the iTunes store so that it doesn't look bad when wholesale retailers, who do control their prices, lower them. It's purely about PR and the ultimate success of the store, and is basically necessary for the agency model to coexist with other retailers employing a wholesale model.
Apple should fight the US Justice department in court on this, they have more money than the USA anyways, just stretch it out for years and years and the US govt will just go bankrupt. lol
Yes and no. Apple should fight if they are told they must use wholesale not agency pricing. They should have the right to set such terms for their deals
But anything about restricting pricing on deals with other stores like favored nation terms or saying a publisher has to use Apples terms outside of Apple should be a big hell no. THAT is antitrust type behavior. If the publishers demand agency from Amazon or set the same price everywhere on their own it's not
Apple should fight the US Justice department in court on this, they have more money than the USA anyways, just stretch it out for years and years and the US govt will just go bankrupt. lol
Apple challenging the DoJ is actually going to allow the DoJ to investigate Amazon during its facts of finding. This allows the DoJ to verify both positions and later determined if it wants to withdraw or not.
A partial update on the governments assertions so far, courtesy of the WSJ:
"The suit alleges that the publishers' chief executives met starting in September 2008 or earlier "in private dining rooms of upscale Manhattan restaurants" and "no legal counsel was present at any of these meetings."
It also describes how Apple executives worked with the publishers in late 2009 and early 2010, as the iPad launch approached, to fine-tune the new pricing model. In January 2010, each of the five publishers "entered into a functionally identical agency contract with Apple that would go into effect simultaneously in April 2010," the Justice Department said.
The government said publishers "regularly communicated" to "exchange sensitive information and assurances of solidarity." They "took steps to conceal their communications with one another, including instructions to 'double delete' e-mail and taking other measures to avoid leaving a paper trail," the government said."
In short, this case is actually a case against the Publishers ``colluding'' with one another and they need to investigate Apple to find this out.
Apple isn't interfering with other supplier contracts.
This is how it works:
- Publisher sells book to Apple for sale on iBooks.
- Publisher sets retail price at $16.99
- Apple sells the book for $16.99
- Publisher also sells book to Amazon for sale as an eBook.
- Publisher sets retail price at $16.99
- Amazon sells the book for $9.99
- Apple's contract with the publisher allows Apple to also sell the book at $9.99 if they choose to.
The question is, is it illegal for Apple to match the price Amazon is selling the same book for.
I don't see anything at all wrong with this set up.
Another scenario:
- Publisher sells book to Apple for sale on iBooks.
- Publisher sets retail price at $16.99
- Apple sells the book for $16.99
- Publisher also sells book to Amazon for sale as an eBook.
- Publisher sets retail price at $9.99
- Amazon sells the book for $9.99
- Apple's contract with the publisher allows Apple to also sell the book at $9.99 if they choose to
The question here is, is it legal for Apple to go ignore the agreed price of $16.99 and match Amazon's price.
Again, I don't see anything wrong with this set up.
In both scenarios no one is forcing anyone to do anything. Publisher decides price and seller has option to sell at a loss if they so choose. What's the problem?
How about this scenario.
-Publisher sells book to Apple for $11.90
-Publisher has retail price set at $16.99
-Apple sells book at $16.99
-Publisher sells book to Amazon for $11.90
-Publisher has retail price set at $16.99
-Amazon wishes to sell said book for $15.99
-Per the publisher they aren't allowed to undercut the price. Apple's price is as low as permitted.
In other words your first scenario could not happen under the agency pricing model. If Apple is selling books at the publisher's minimum retail price, it's Amazon and every other competitor who are restricted from undercutting Apple's price which is also the publisher's price.
6. Apple facilitated the Publisher Defendants' collective effort to end retail price competition by coordinating their transition to an agency model across all retailers. Apple clearly understood that its participation in this scheme would result in higher prices to consumers. As Apple CEO Steve Jobs described his company's strategy for negotiating with the Publisher Defendants, "We'll go to [an] agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that's what you want anyway." Apple was perfectly willing to help the Publisher Defendants obtain their objective of higher prices for consumers by ending Amazon's "$9.99" price program aslong as Apple was guaranteed its 30 percent margin and could avoid retail price competition from Amazon.
I love my Apple products, but if this stuff pans out...
Many people seem to not comprehend the issue. The issue is not the agency model (setting their "own price").
The issue is Apple's condition that no one else ever sell it for less than Apple. This eliminates competition by definition. All other stores must use the price from the iBookStore and never offer it for less. This is quite literally price fixing. Price fixing is most definitely illegal.
You could be right, but I didn't get that sense. I got, "Hey, if Amazon sells a book for $7.99 that we have for $9.99? You will lower our price to $7.99"
Debt is a resource because if we default on ours, the world economy collapses.
You can say the same for oil. Hence, debt is a resource.
A LITTLE debt isn't. Like we can grow rice in the US. But it's not prevalent enough to really be considered a staple. But elsewhere in the world?
So, if I owe a million dollars, I'm in trouble .... But if I owe a billion dollars, the bank is in trouble ........ And this is right, how? "Interesting" financial system you have there.
How about this scenario.
-Publisher sells book to Apple for $11.90
-Publisher has retail price set at $16.99
-Apple sells book at $16.99
-Publisher sells book to Amazon for $11.90
-Publisher has retail price set at $16.99
-Amazon wishes to sell said book for $15.99
-Per the publisher they aren't allowed to undercut the price. Apple's price is as low as permitted.
In other words your first scenario could not happen under the agency pricing model. If Apple is selling books at the publisher's minimum retail price, it's Amazon and every other competitor who are restricted from undercutting Apple's price which is also the publisher's price.
The Agency model doesn't fix prices. It's a perfectly legal and accepted way of determining a price. The question is the qualifier "... we also asked for a guarantee that if anybody else is selling the books cheaper than we are, then we can sell them at the lower price too."
Apple isn't setting a base price. They are asking for ability to match the pricing of other sellers.
The DOJ complaint is awesome, and should be required reading before posting.
I love my Apple products, but if this stuff pans out...
Where was Apple's BoD during all of this? Apple legal? Tim Cook?
Steve was all about bending/stretching the rules but I just can't believe that others in Apple weren't questioning this.
Where was Apple's BoD during all of this? Apple legal? Tim Cook?
Steve was all about bending/stretching the rules but I just can't believe that others in Apple weren't questioning this.
I have no idea. Of course, the complaint is totally one-sided and needs to be read in that light, but man....
You're right about one thing, many people seem not to comprehend the issue, and you're one of the ones who doesn't. (Actually, you do, you're just pretending not to.)
The issue is that Amazon is leveraging its dominance in online retailing generally, and traditional book selling particularly, to completely control the e-book market, drive other e-book, and traditional, booksellers out of business, and establish complete control of the publishing industry.
What world are you in?
The issue is with Apple and 5 publishers, not Amazon. The DoJ isn't anti-Apple.
Focus on reality, less on theatrics.
The DOJ complaint is awesome, and should be required reading before posting. My favorite passage so far
I love my Apple products, but if this stuff pans out...
Now the agency model is illegal?
What world are you in?
The issue is with Apple and 5 publishers, not Amazon. The DoJ isn't anti-Apple.
Focus on reality, less on theatrics.
This begs the question: Why isn't the DoJ interested in Amazon using it's monopoly position to sell at a loss to keep competitors out of the market?
The Agency model doesn't fix prices. It's a perfectly legal and accepted way of determining a price. The question is the qualifier "... we also asked for a guarantee that if anybody else is selling the books cheaper than we are, then we can sell them at the lower price too."
Apple isn't setting a base price. They are asking for ability to match the pricing of other sellers.
No Apple did not set the base price. That was the publishers. The guarantee that Apple reportedly worked out with those 5 publishers spelled out that Amazon couldn't set their own prices either. If Apple sold their books at the publisher's retail price, assuring a 30% profit rather than getting even greedier and selling above retail, they were guaranteed not to have a worry that Amazon might sell at a lower price.
It wasn't that Apple wanted the ability to match Amazon's low prices. They wanted a guarantee that they didn't have to compete with Amazon on prices...
according to reports.