Apple was price fixing, its an open and shut case. They helped organize an effort among top publishers to raise e-book prices. The government has a bunch of e-mail, phone calls, and key witnesses that seem to make this a done deal.
How about when Jobs did his iPad introduction, where he bought a copy of the Edward Kennedy autobiography on stage for $14.99 ($9.99 on Amazon). When Walt Mossberg questioned Jobs on why people would pay more for an e-book from Apple, Jobs not so wisely replied, That wont be the case. The prices wontt remain the same.
Carolyn Reidy, the CEO of Simon & Schuster, ended up calling that remark incredibly stupid in an e-mail to a colleague.
It doesn't matter how many people own iProducts - Apple is going to end up paying a bunch of that money they have banked.
I believe he said something to the effect that Amazon's prices will be the same as Apple's. That doesn't meant that Amazon would raise their price. It could also mean that Apple would lower theirs. This is the most favored nations clause that they had. It wasn't that Amazon was going to be forced to raise their prices, it was that Apple would get the same prices as everyone else to keep a level playing field. So Steve knew he would get to match Amazons price one way or the other. The publishers obviously wanted the raise to match Apple option... That is not Apple's problem though as the publishers set the actual prices.
I believe he said something to the effect that Amazon's prices will be the same as Apple's. That doesn't meant that Amazon would raise their price. It could also mean that Apple would lower theirs. This is the most favored nations clause that they had. It wasn't that Amazon was going to be forced to raise their prices, it was that Apple would get the same prices as everyone else to keep a level playing field. So Steve knew he would get to match Amazons price one way or the other. The publishers obviously wanted the raise to match Apple option... That is not Apple's problem though as the publishers set the actual prices.
On the surface of it, Jobs' comment seems to indicate a benefit to the publisher and why shouldn't he phrase it in that way? He was a salesman trying to make a deal. He couldn't tell the future or guarantee that Apple would be able to control prices, for crying out loud. It was putting a positive spin on an unknown. If any collusion occurred, it appears it was between the publishers, not Apple.
Imagine you own a store and you buy a widget from XYB company, they sell you the widget for 7.50 each, you decided that you will charge 8.25 each in your store. But wait the company also sells the same widget to Apple and in their Apple contract they set the price at 12.50 each and stipulate that no one else can sell the same widget for less than 12.50.
Apple has just fixed the price of those products.
That is not "price fixing" because it's technically impossible. Apple, the reseller of the maker's product in this case, has no power to set the prices that other resellers of the maker's product charge. The maker of a product has no power to set the prices any reseller charge, except by setting the wholesale cost (the price they choose to sell it to resellers for) high enough that the reseller cannot sell it lower and make a profit. The manufacturer controlling the their own wholesale price is perfectly legal. What's illegal is the manufacturer dictating what a reseller may charge at retail. There is no such allegation in this case. Apple has the power to agree or disagree to carry the maker's product in its store and to state the terms under which they'll agree to carry it. There are a number of exclusivity deals where certain manufacturers and publishers sell their product ONLY through Apple's stores. By your logic, that's even worse than Apple wanting to control prices because then they're also controlling distribution! But nobody claims exclusive reseller arrangements are illegal.
It is clear Apple was in fact a part of price fixing with the publishers when Apple got the MFN clause that stated nobody would be allowed to sell the same books Apple sold for less money than Apple was selling the books for.
Imagine you own a store and you buy a widget from XYB company, they sell you the widget for 7.50 each, you decided that you will charge 8.25 each in your store. But wait the company also sells the same widget to Apple and in their Apple contract they set the price at 12.50 each and stipulate that no one else can sell the same widget for less than 12.50.
Apple has just fixed the price of those products.
I apologize for not following this story more closely and knowing more details. Yes, Apple coordinated with publishers what the prices of books would be on the Apple store. But did Apple say those items could not be sold in any other store at a different price? And are we talking about books in Apple's proprietary iBooks format or any format? It seems reasonable (but reasonable != legal) for Apple to specify that if publishers make content available in Apple's proprietary format on Apple's store that they not sell the exact same content elsewhere at a lower price.
Is Apple accused of colluding with publishers to establish an MSRP on the Apple store? Rather than let the publishers all establish their own price, Apple worked to set a uniform MSRP on the Apple store? That sounds a lot like what they did with music publishers.
Sorry, but I really don't understand what Apple is being accused of.
What's illegal is the manufacturer dictating what a reseller may charge at retail.
Doesn't Apple do exactly that? Isn't that one reason Costco stopped carrying Apple products? Apple dictates the retail price. Costco wanted to sell for less. So Costco stopped selling Apple products. I'm pretty sure "lowest advertised price" is a common agreement between manufacturers and resellers. That's why on Amazon and other places you have to add an item to your cart before you can see the price.
Apple is clearly in the wrong on this. I'm sad to see them taking this to court because it reflects the arrogance of a company that doesn't believe they have to compete. Even though Steve Jobs was involved, the actions here are the exact opposite of what Apple helped accomplish with the music market.
People keep fixating on Amazon but it should be noted, that the whole sale model wasn't thought up by them. It was the defacto standard for over 100 years prior and used by all publishers.
Really, to anyone defending this, you're nuts. To believe the entire industry changed their model from wholesale to agency, ignoring the prior 100 plus years, all around the same day, at the same time, with the same company, in the same manner and it is all just coincidence is the purest and most delusional form of fanboydom.
If the reverse were happening to Apple, people would be losing their minds in digust.
Imagine Apple created a new device and created new software to help manage it. Imagine, to the reluctance of the music industry that they convinced them to sell $9.99 albums (down from about $14-15.99) and dollar singles (down from being cobbled into said expensive albums)
Now imagine along comes Amazon. They cut a deal with all the recording companies. They bring an inferior solution to market compared to the iPod. Per the agreement all Apple's prior deals with the companies are now invalidated as they all hang together wanting to enforce the new Amazon agreement and force it on Apple.
Apple singles are now $1.29 and albums are $13. There isn't any way to find a discount on said items.
There isn't a person here would defend this action. They would crucify Amazon for altering Apple's agreements and forcing price increases on everyone.
People keep fixating on Amazon but it should be noted, that the whole sale model wasn't thought up by them.
And not a single legal sales model Apple is using was thought up by them.
What also wasn't thought up by Amazon but I opine they are using are predatory practices in eBook sales to corner the market using anticompetitive tactics.
That is not "price fixing" because it's technically impossible. Apple, the reseller of the maker's product in this case, has no power to set the prices that other resellers of the maker's product charge. The maker of a product has no power to set the prices any reseller charge, except by setting the wholesale cost (the price they choose to sell it to resellers for) high enough that the reseller cannot sell it lower and make a profit. The manufacturer controlling the their own wholesale price is perfectly legal. What's illegal is the manufacturer dictating what a reseller may charge at retail. There is no such allegation in this case. Apple has the power to agree or disagree to carry the maker's product in its store and to state the terms under which they'll agree to carry it. There are a number of exclusivity deals where certain manufacturers and publishers sell their product ONLY through Apple's stores. By your logic, that's even worse than Apple wanting to control prices because then they're also controlling distribution! But nobody claims exclusive reseller arrangements are illegal.
Your entire post is untrue, manufacturers CAN set the prices their retailers sell at, as recently determined by the U.S. Supreme Court.
Also, that's what the agency model is: the publisher sets the price. Nothing illegal.
What would be illegal if all the big name publishers got together secretly and agreed to ALL raise their prices. Combined, they have monopolistic power, and raising prices as a collective would be an abuse of market power.
Apple is being accused of being a party to this; Apple is arguing that, even if something shady DID happen, they weren't involved.
There looks to be a lot of people in this forum who really need to take a few steps back and remove their bias for a few minutes. Here is the most telling thing in this case so far from a person (the judge) who has seen a lot of the evidence already. The judge has said that she feel the DOJ can prove their case against Apple.
I know here come all the comments about how the judge is not being fair and she should be removed.
Ah, but she made the comment because she was asked by both the DOJ and Apple to give her opinion of the case after she had already reviewed several hundred documents.
Again the judge was asked by both Apple and the DOJ for her opinion about the case.
It is clear Apple was in fact a part of price fixing with the publishers when Apple got the MFN clause that stated nobody would be allowed to sell the same books Apple sold for less money than Apple was selling the books for.
Imagine you own a store and you buy a widget from XYB company, they sell you the widget for 7.50 each, you decided that you will charge 8.25 each in your store. But wait the company also sells the same widget to Apple and in their Apple contract they set the price at 12.50 each and stipulate that no one else can sell the same widget for less than 12.50.
Apple has just fixed the price of those products.
Not a single honest person can dispute that Apple did in fact contact each of the publishers involved and directed them what the prices would be.
Apple thought they were being smart by not meeting with all the publishers in the same room at the same time, instead Apple thought they were smarter than the law and tried to do the same thing by phone and email but the end result was the same as all of them meeting in the same room discussing the pricing of e books and than setting up the most favored nation clause that only favored Apple.
Sorry but this is a case that Apple is going to lose and while the DOJ is not seeking monetary penalties against Apple the states can all jump in after Apple is found guilty and sue Apple for millions or even billions of dollars.
Apples own arrogance will be their down fall.
Price fixing is not illegal.
Ugh.
Apple is not accused of price fixing, they're accused of price fixing AND collusion with the major publishers, thus causing a monopolistic position and an abuse of market power.
Amazon's deal with the publishers meant that Amazon got 70% of each sale and the publisher a mere 30% -- I can't see this model being used for print editions.
Apple comes along and says: "We'll keep 30% and you the publishers and authors take a bigger slice (70%) of the cake.
Amazon doesn't like that so for a day it stops selling ebooks in the hope that publishers will succumb to Amazon's blackmail -- it doesn't work and Amazon's tactic backfires. Amazon falls into line.
Why is Amazon hell-bent on cornering the ebook market? Well, the future is in ebooks and not print. Amazon has already been working to destroy the traditional publishing houses, as evidenced by Amazon itself bidding for new manuscripts and entering the publishing market.
Apple shouldn't be in the dock -- Bezos (who is no bozo) & Amazon should.
I really don't understand the Amazon business model. They sell Kindles for a loss (at least they did initially and almost certainly do on their Fire models) so they can sell content (eBooks). They sell eBooks at a loss so they can sell Kindles. Do they expect to make up for it in volume? Either they are complete idiots, or they want to subsidize reading, or, maybe, just maybe, they are figuring that in the long run their monopoly in the eBooks area will be exploitable.
I really don't understand the Amazon business model. They sell Kindles for a loss (at least they did initially and almost certainly do on their Fire models) so they can sell content (eBooks). They sell eBooks at a loss so they can sell Kindles. Do they expect to make up for it in volume? Either they are complete idiots, or they want to subsidize reading, or, maybe, just maybe, they are figuring that in the long run their monopoly in the eBooks area will be exploitable.
They are selling at a loss to gain control of the publishing industry. They subsidize this with the gross profits from other categories of merchandise.
In other words, they are leveraging their dominance as an online retailer to eliminate competition in the publishing industry with the goal of achieving complete vertical control of that industry.
This action by the DoJ serves no purpose but to consolidate that control. Regardless of whatever other opinions you may have about this case, you have to wonder just why the DoJ is following a course of action of which the outcome is completely clear. A course of action that will give Amazon a government sanctioned monopoly over the entire publishing industry, which is clearly not in the interest of consumers.
There are only 2 possible explanations: Either the lawyers at the DoJ are utterly stupid or they are utterly corrupt.
They are selling at a loss to gain control of the publishing industry. They subsidize this with the gross profits from other categories of merchandise.
In other words, they are leveraging their dominance as an online retailer to eliminate competition in the publishing industry with the goal of achieving complete vertical control of that industry.
This action by the DoJ serves no purpose but to consolidate that control. Regardless of whatever other opinions you may have about this case, you have to wonder just why the DoJ is following a course of action of which the outcome is completely clear. A course of action that will give Amazon a government sanctioned monopoly over the entire publishing industry, which is clearly not in the interest of consumers.
There are only 2 possible explanations: Either the lawyers at the DoJ are utterly stupid or they are utterly corrupt.
From a political standpoint, it sounds better for the DoJ to be targeting "big bad Apple" who raised prices with their "Apple tax", than to target Amazon's low prices. That sounds better, right? It's shortsighted, but sounds better. And that's politics for you.
First, you cannot compel an agency to enforce, period.
Second, eBook prices falling after the fact does not matter. The question is whether Apple conspired to price fix.
Third, conspiring to set minimum price at Apple's price is nothing but a price fixing that tend to increase prices for end consumers. Apple may get non per se analysis but I doubt Apple can prevail nonethless. If the evidence actually weighs so. I haven't really followed this case. The real question is whether Apple was involved in this and it seems like the Apple's counsel points that DoJ has no evidence to say so.
I really don't understand the Amazon business model. They sell Kindles for a loss (at least they did initially and almost certainly do on their Fire models) so they can sell content (eBooks). They sell eBooks at a loss so they can sell Kindles. Do they expect to make up for it in volume? Either they are complete idiots, or they want to subsidize reading, or, maybe, just maybe, they are figuring that in the long run their monopoly in the eBooks area will be exploitable.
I know several posters here are absolutely certain Amazon loses money on Kindle and book sales, but I don't know where they're getting their facts from. I've seen everything from Amazon taking a loss of $50 every time they sell a Kindle to Amazon making a profit of over $130 average from the sale of one. I guess pick and choose whichever one fits your argument.
With that particular comment out of the way, there's a fairly insightful article here on Amazon and how it fits in with the book market as a whole. It might be a tad anti-Amazon but perhaps not. I don't have enough detailed knowledge about them to say for certain. In any event Bezos may get a close-up exam from regulators sometime in the near future too. http://www.infotoday.com/searcher/may12/Herther--The-Ebook-Wars--Amazon-Versus-the-Rest.shtml
EDIT: I wanted to mention a recent book purchase my wife made. She found a certain cookbook she wanted that retailed new for a tad over $18. There was also a used copy, excellent condition, for $4.46. Believe it or not that used copy also qualified for Amazon Prime. She ordered the book for less than $5 and got free shipping to boot. How anyone made money on that except possibly UPS I've no idea.
How dare they defend themselves for not doing what Amazon is!
No one is saying Apple can't defend themselves. The reason all the publishers settled out was because they had all "magically" come together at the same time and somehow "magically" all agreed to withhold their product from Amazon at the same time they "magically" made an agreement with Apple.
Apple could make agency agreements, add their 30% and do whatever they want. Apple just knew though that being a late entrant to ebooks, while not being an innovator along with being more expensive than Amazon meant that they were completely uncompetitive and thus would not really make many sales.
Thus what they did was conspire with the publishers to force Amazon to the agency model.
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Originally Posted by SolipsismX
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Originally Posted by trumptman
People keep fixating on Amazon but it should be noted, that the whole sale model wasn't thought up by them.
And not a single legal sales model Apple is using was thought up by them.
What also wasn't thought up by Amazon but I opine they are using are predatory practices in eBook sales to corner the market using anticompetitive tactics.
This has been alleged on here dozens of times. Post the proof or withdraw the claim.That bit a few posts up about how Amazon loses money on Kindles and then loses money on books and thus profits is a hilarious example of the fanboy reasoning employed by some Apple fans to avoid dealing with reality. The reality is that every market becomes commodotized. Apple was willing to do this with the iPod. They've done it a little with the iPad. They've been unwilling to do it with the iPhone and and it is clear their 30% is important to them.
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Originally Posted by Gatorguy
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Originally Posted by malax
I really don't understand the Amazon business model. They sell Kindles for a loss (at least they did initially and almost certainly do on their Fire models) so they can sell content (eBooks). They sell eBooks at a loss so they can sell Kindles. Do they expect to make up for it in volume? Either they are complete idiots, or they want to subsidize reading, or, maybe, just maybe, they are figuring that in the long run their monopoly in the eBooks area will be exploitable.
I know several posters here are absolutely certain Amazon loses money on Kindle and book sales, but I don't know where they're getting their facts from. I've seen everything from Amazon taking a loss of $50 every time they sell a Kindle to Amazon making a profit of over $130 average from the sale of one. I guess pick and choose whichever one fits your argument.
With that particular comment out of the way, there's a fairly insightful article here on Amazon and how it fits in with the book market as a whole. It might be a tad anti-Amazon but perhaps not. I don't have enough detailed knowledge about them to say for certain. In any event Bezos may get a close-up exam from regulators sometime in the near future too.
Countering claims that ebooks should be much cheaper than print books to align with apps, music, or other media, IPG’s CEO Curt Matthews argues that “an e-book still needs all of the expensive editorial services … and, if it is going to sell, it has to be marketed, distributed, and publicized, just as a print edition must be. And the author royalty on an e-book sale is usually about the same as it is for a print book, even though the list price of the e-edition is lower. We have noted that for our $14.95 paperback the printing amounts to about $1.50. Warehousing and shipping will add another $1.50 to the real cost of selling a printed book. A web retailer should be able to work on a narrower margin than a bricks- and-mortar bookstore, which could lower the price of an e-edition perhaps another $2.00. Deduct these specifically print-related costs from the price of a printed book and the minimum price for a straightforward e-book comes to about $10.00—less than the price of the print version but not some small fraction of the print price. Certainly not 99 cents, and not $5.00 either” (“What Should an E-Book Cost?” Curt Matthews, Feb. 24, 2012 [www.ipgbook.com/why-ipg-has-not-been-able-to-agree-on-terms-with-amazon-news-32.php]).
To me, that is a very strong assumption and the crux of the matter. I remember the same arguments happening when music was moving to MP3 and other formats. The claim was that the recording studios, producers and other equipment would all still be as expensive. To some degree that can be true. If you need a hit producer and have to pay them millions per single, and certain studios in certain places rented then it can be quite expensive. However we also know that the tools out there today match pro levels of performance at a fraction of the cost. We know that social media can generate as much buzz and certainly much morebuzz per dollar spent than conventional marketing and publicizing.
I follow and enjoy several unsigned bands. There is a reason they are unsigned. They keep 100% of everything in terms of merch and music sales versus some small percentage offered by those who would sign them. Often the terms would require them to sale 10-20 (minimum) times more music at the same price point just to make what they make now. Since that isn't a guarantee (especially since they aren't 17 year Disney star types) they keep themselves independent.
I'm sure every publisher believes you need a very expensive team of people to help you get your product to market. The point is that the services side of publishers need to reduce their costs and have the same innovation occur that has occurred on the printing side and then pass those reduced costs along. Amazon is helping that happen and I don't think it is a bad thing.
So I need to post an anti-trust case that Amazon lost in regards to their ill-gotten eBook monopoly or I need to withdrawal my opinion about Amazon's anti-competitve tactics? Seriously?! :no:
Comments
Quote:
Originally Posted by sac2dude
Apple was price fixing, its an open and shut case. They helped organize an effort among top publishers to raise e-book prices. The government has a bunch of e-mail, phone calls, and key witnesses that seem to make this a done deal.
How about when Jobs did his iPad introduction, where he bought a copy of the Edward Kennedy autobiography on stage for $14.99 ($9.99 on Amazon). When Walt Mossberg questioned Jobs on why people would pay more for an e-book from Apple, Jobs not so wisely replied, That wont be the case. The prices wontt remain the same.
Carolyn Reidy, the CEO of Simon & Schuster, ended up calling that remark incredibly stupid in an e-mail to a colleague.
It doesn't matter how many people own iProducts - Apple is going to end up paying a bunch of that money they have banked.
I believe he said something to the effect that Amazon's prices will be the same as Apple's. That doesn't meant that Amazon would raise their price. It could also mean that Apple would lower theirs. This is the most favored nations clause that they had. It wasn't that Amazon was going to be forced to raise their prices, it was that Apple would get the same prices as everyone else to keep a level playing field. So Steve knew he would get to match Amazons price one way or the other. The publishers obviously wanted the raise to match Apple option... That is not Apple's problem though as the publishers set the actual prices.
On the surface of it, Jobs' comment seems to indicate a benefit to the publisher and why shouldn't he phrase it in that way? He was a salesman trying to make a deal. He couldn't tell the future or guarantee that Apple would be able to control prices, for crying out loud. It was putting a positive spin on an unknown. If any collusion occurred, it appears it was between the publishers, not Apple.
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Originally Posted by SpamSandwich
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Originally Posted by Victory2013
Legal opinions or stock analysts who are long on Apple?
Legal opinions. I have no link to offer.
Where did you find these opinions? Please provide a reference even you can't provide a link.
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Originally Posted by Victory2013
Imagine you own a store and you buy a widget from XYB company, they sell you the widget for 7.50 each, you decided that you will charge 8.25 each in your store. But wait the company also sells the same widget to Apple and in their Apple contract they set the price at 12.50 each and stipulate that no one else can sell the same widget for less than 12.50.
Apple has just fixed the price of those products.
That is not "price fixing" because it's technically impossible. Apple, the reseller of the maker's product in this case, has no power to set the prices that other resellers of the maker's product charge. The maker of a product has no power to set the prices any reseller charge, except by setting the wholesale cost (the price they choose to sell it to resellers for) high enough that the reseller cannot sell it lower and make a profit. The manufacturer controlling the their own wholesale price is perfectly legal. What's illegal is the manufacturer dictating what a reseller may charge at retail. There is no such allegation in this case. Apple has the power to agree or disagree to carry the maker's product in its store and to state the terms under which they'll agree to carry it. There are a number of exclusivity deals where certain manufacturers and publishers sell their product ONLY through Apple's stores. By your logic, that's even worse than Apple wanting to control prices because then they're also controlling distribution! But nobody claims exclusive reseller arrangements are illegal.
Quote:
Originally Posted by Victory2013
It is clear Apple was in fact a part of price fixing with the publishers when Apple got the MFN clause that stated nobody would be allowed to sell the same books Apple sold for less money than Apple was selling the books for.
Imagine you own a store and you buy a widget from XYB company, they sell you the widget for 7.50 each, you decided that you will charge 8.25 each in your store. But wait the company also sells the same widget to Apple and in their Apple contract they set the price at 12.50 each and stipulate that no one else can sell the same widget for less than 12.50.
Apple has just fixed the price of those products.
I apologize for not following this story more closely and knowing more details. Yes, Apple coordinated with publishers what the prices of books would be on the Apple store. But did Apple say those items could not be sold in any other store at a different price? And are we talking about books in Apple's proprietary iBooks format or any format? It seems reasonable (but reasonable != legal) for Apple to specify that if publishers make content available in Apple's proprietary format on Apple's store that they not sell the exact same content elsewhere at a lower price.
Is Apple accused of colluding with publishers to establish an MSRP on the Apple store? Rather than let the publishers all establish their own price, Apple worked to set a uniform MSRP on the Apple store? That sounds a lot like what they did with music publishers.
Sorry, but I really don't understand what Apple is being accused of.
- Jasen.
Quote:
Originally Posted by Magic_Al
What's illegal is the manufacturer dictating what a reseller may charge at retail.
Doesn't Apple do exactly that? Isn't that one reason Costco stopped carrying Apple products? Apple dictates the retail price. Costco wanted to sell for less. So Costco stopped selling Apple products. I'm pretty sure "lowest advertised price" is a common agreement between manufacturers and resellers. That's why on Amazon and other places you have to add an item to your cart before you can see the price.
- Jasen.
Apple is clearly in the wrong on this. I'm sad to see them taking this to court because it reflects the arrogance of a company that doesn't believe they have to compete. Even though Steve Jobs was involved, the actions here are the exact opposite of what Apple helped accomplish with the music market.
People keep fixating on Amazon but it should be noted, that the whole sale model wasn't thought up by them. It was the defacto standard for over 100 years prior and used by all publishers.
Really, to anyone defending this, you're nuts. To believe the entire industry changed their model from wholesale to agency, ignoring the prior 100 plus years, all around the same day, at the same time, with the same company, in the same manner and it is all just coincidence is the purest and most delusional form of fanboydom.
If the reverse were happening to Apple, people would be losing their minds in digust.
Imagine Apple created a new device and created new software to help manage it. Imagine, to the reluctance of the music industry that they convinced them to sell $9.99 albums (down from about $14-15.99) and dollar singles (down from being cobbled into said expensive albums)
Now imagine along comes Amazon. They cut a deal with all the recording companies. They bring an inferior solution to market compared to the iPod. Per the agreement all Apple's prior deals with the companies are now invalidated as they all hang together wanting to enforce the new Amazon agreement and force it on Apple.
Apple singles are now $1.29 and albums are $13. There isn't any way to find a discount on said items.
There isn't a person here would defend this action. They would crucify Amazon for altering Apple's agreements and forcing price increases on everyone.
Apple is simply wrong here.
Originally Posted by trumptman
Apple is clearly in the wrong on this.
How dare they defend themselves for not doing what Amazon is!
And not a single legal sales model Apple is using was thought up by them.
What also wasn't thought up by Amazon but I opine they are using are predatory practices in eBook sales to corner the market using anticompetitive tactics.
Quote:
Originally Posted by Magic_Al
That is not "price fixing" because it's technically impossible. Apple, the reseller of the maker's product in this case, has no power to set the prices that other resellers of the maker's product charge. The maker of a product has no power to set the prices any reseller charge, except by setting the wholesale cost (the price they choose to sell it to resellers for) high enough that the reseller cannot sell it lower and make a profit. The manufacturer controlling the their own wholesale price is perfectly legal. What's illegal is the manufacturer dictating what a reseller may charge at retail. There is no such allegation in this case. Apple has the power to agree or disagree to carry the maker's product in its store and to state the terms under which they'll agree to carry it. There are a number of exclusivity deals where certain manufacturers and publishers sell their product ONLY through Apple's stores. By your logic, that's even worse than Apple wanting to control prices because then they're also controlling distribution! But nobody claims exclusive reseller arrangements are illegal.
Your entire post is untrue, manufacturers CAN set the prices their retailers sell at, as recently determined by the U.S. Supreme Court.
Also, that's what the agency model is: the publisher sets the price. Nothing illegal.
What would be illegal if all the big name publishers got together secretly and agreed to ALL raise their prices. Combined, they have monopolistic power, and raising prices as a collective would be an abuse of market power.
Apple is being accused of being a party to this; Apple is arguing that, even if something shady DID happen, they weren't involved.
Quote:
Originally Posted by Victory2013
There looks to be a lot of people in this forum who really need to take a few steps back and remove their bias for a few minutes. Here is the most telling thing in this case so far from a person (the judge) who has seen a lot of the evidence already. The judge has said that she feel the DOJ can prove their case against Apple.
I know here come all the comments about how the judge is not being fair and she should be removed.
Ah, but she made the comment because she was asked by both the DOJ and Apple to give her opinion of the case after she had already reviewed several hundred documents.
Again the judge was asked by both Apple and the DOJ for her opinion about the case.
It is clear Apple was in fact a part of price fixing with the publishers when Apple got the MFN clause that stated nobody would be allowed to sell the same books Apple sold for less money than Apple was selling the books for.
Imagine you own a store and you buy a widget from XYB company, they sell you the widget for 7.50 each, you decided that you will charge 8.25 each in your store. But wait the company also sells the same widget to Apple and in their Apple contract they set the price at 12.50 each and stipulate that no one else can sell the same widget for less than 12.50.
Apple has just fixed the price of those products.
Not a single honest person can dispute that Apple did in fact contact each of the publishers involved and directed them what the prices would be.
Apple thought they were being smart by not meeting with all the publishers in the same room at the same time, instead Apple thought they were smarter than the law and tried to do the same thing by phone and email but the end result was the same as all of them meeting in the same room discussing the pricing of e books and than setting up the most favored nation clause that only favored Apple.
Sorry but this is a case that Apple is going to lose and while the DOJ is not seeking monetary penalties against Apple the states can all jump in after Apple is found guilty and sue Apple for millions or even billions of dollars.
Apples own arrogance will be their down fall.
Price fixing is not illegal.
Ugh.
Apple is not accused of price fixing, they're accused of price fixing AND collusion with the major publishers, thus causing a monopolistic position and an abuse of market power.
Amazon's deal with the publishers meant that Amazon got 70% of each sale and the publisher a mere 30% -- I can't see this model being used for print editions.
Apple comes along and says: "We'll keep 30% and you the publishers and authors take a bigger slice (70%) of the cake.
Amazon doesn't like that so for a day it stops selling ebooks in the hope that publishers will succumb to Amazon's blackmail -- it doesn't work and Amazon's tactic backfires. Amazon falls into line.
Why is Amazon hell-bent on cornering the ebook market? Well, the future is in ebooks and not print. Amazon has already been working to destroy the traditional publishing houses, as evidenced by Amazon itself bidding for new manuscripts and entering the publishing market.
Apple shouldn't be in the dock -- Bezos (who is no bozo) & Amazon should.
I really don't understand the Amazon business model. They sell Kindles for a loss (at least they did initially and almost certainly do on their Fire models) so they can sell content (eBooks). They sell eBooks at a loss so they can sell Kindles. Do they expect to make up for it in volume? Either they are complete idiots, or they want to subsidize reading, or, maybe, just maybe, they are figuring that in the long run their monopoly in the eBooks area will be exploitable.
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Originally Posted by malax
I really don't understand the Amazon business model. They sell Kindles for a loss (at least they did initially and almost certainly do on their Fire models) so they can sell content (eBooks). They sell eBooks at a loss so they can sell Kindles. Do they expect to make up for it in volume? Either they are complete idiots, or they want to subsidize reading, or, maybe, just maybe, they are figuring that in the long run their monopoly in the eBooks area will be exploitable.
They are selling at a loss to gain control of the publishing industry. They subsidize this with the gross profits from other categories of merchandise.
In other words, they are leveraging their dominance as an online retailer to eliminate competition in the publishing industry with the goal of achieving complete vertical control of that industry.
This action by the DoJ serves no purpose but to consolidate that control. Regardless of whatever other opinions you may have about this case, you have to wonder just why the DoJ is following a course of action of which the outcome is completely clear. A course of action that will give Amazon a government sanctioned monopoly over the entire publishing industry, which is clearly not in the interest of consumers.
There are only 2 possible explanations: Either the lawyers at the DoJ are utterly stupid or they are utterly corrupt.
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Originally Posted by anonymouse
They are selling at a loss to gain control of the publishing industry. They subsidize this with the gross profits from other categories of merchandise.
In other words, they are leveraging their dominance as an online retailer to eliminate competition in the publishing industry with the goal of achieving complete vertical control of that industry.
This action by the DoJ serves no purpose but to consolidate that control. Regardless of whatever other opinions you may have about this case, you have to wonder just why the DoJ is following a course of action of which the outcome is completely clear. A course of action that will give Amazon a government sanctioned monopoly over the entire publishing industry, which is clearly not in the interest of consumers.
There are only 2 possible explanations: Either the lawyers at the DoJ are utterly stupid or they are utterly corrupt.
From a political standpoint, it sounds better for the DoJ to be targeting "big bad Apple" who raised prices with their "Apple tax", than to target Amazon's low prices. That sounds better, right? It's shortsighted, but sounds better. And that's politics for you.
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Originally Posted by malax
I really don't understand the Amazon business model. ....Either they are complete idiots, .....
No, Amazon's pretty smart.
Its shareholders, otoh, are complete.....
First, you cannot compel an agency to enforce, period.
Second, eBook prices falling after the fact does not matter. The question is whether Apple conspired to price fix.
Third, conspiring to set minimum price at Apple's price is nothing but a price fixing that tend to increase prices for end consumers. Apple may get non per se analysis but I doubt Apple can prevail nonethless. If the evidence actually weighs so. I haven't really followed this case. The real question is whether Apple was involved in this and it seems like the Apple's counsel points that DoJ has no evidence to say so.
I know several posters here are absolutely certain Amazon loses money on Kindle and book sales, but I don't know where they're getting their facts from. I've seen everything from Amazon taking a loss of $50 every time they sell a Kindle to Amazon making a profit of over $130 average from the sale of one. I guess pick and choose whichever one fits your argument.
With that particular comment out of the way, there's a fairly insightful article here on Amazon and how it fits in with the book market as a whole. It might be a tad anti-Amazon but perhaps not. I don't have enough detailed knowledge about them to say for certain. In any event Bezos may get a close-up exam from regulators sometime in the near future too.
http://www.infotoday.com/searcher/may12/Herther--The-Ebook-Wars--Amazon-Versus-the-Rest.shtml
EDIT: I wanted to mention a recent book purchase my wife made. She found a certain cookbook she wanted that retailed new for a tad over $18. There was also a used copy, excellent condition, for $4.46. Believe it or not that used copy also qualified for Amazon Prime. She ordered the book for less than $5 and got free shipping to boot. How anyone made money on that except possibly UPS I've no idea.
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Originally Posted by Tallest Skil
Originally Posted by trumptman
Apple is clearly in the wrong on this.
How dare they defend themselves for not doing what Amazon is!
No one is saying Apple can't defend themselves. The reason all the publishers settled out was because they had all "magically" come together at the same time and somehow "magically" all agreed to withhold their product from Amazon at the same time they "magically" made an agreement with Apple.
Apple could make agency agreements, add their 30% and do whatever they want. Apple just knew though that being a late entrant to ebooks, while not being an innovator along with being more expensive than Amazon meant that they were completely uncompetitive and thus would not really make many sales.
Thus what they did was conspire with the publishers to force Amazon to the agency model.
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Originally Posted by SolipsismX
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Originally Posted by trumptman
People keep fixating on Amazon but it should be noted, that the whole sale model wasn't thought up by them.
And not a single legal sales model Apple is using was thought up by them.
What also wasn't thought up by Amazon but I opine they are using are predatory practices in eBook sales to corner the market using anticompetitive tactics.
This has been alleged on here dozens of times. Post the proof or withdraw the claim.That bit a few posts up about how Amazon loses money on Kindles and then loses money on books and thus profits is a hilarious example of the fanboy reasoning employed by some Apple fans to avoid dealing with reality. The reality is that every market becomes commodotized. Apple was willing to do this with the iPod. They've done it a little with the iPad. They've been unwilling to do it with the iPhone and and it is clear their 30% is important to them.
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Originally Posted by Gatorguy
Quote:
Originally Posted by malax
I really don't understand the Amazon business model. They sell Kindles for a loss (at least they did initially and almost certainly do on their Fire models) so they can sell content (eBooks). They sell eBooks at a loss so they can sell Kindles. Do they expect to make up for it in volume? Either they are complete idiots, or they want to subsidize reading, or, maybe, just maybe, they are figuring that in the long run their monopoly in the eBooks area will be exploitable.
I know several posters here are absolutely certain Amazon loses money on Kindle and book sales, but I don't know where they're getting their facts from. I've seen everything from Amazon taking a loss of $50 every time they sell a Kindle to Amazon making a profit of over $130 average from the sale of one. I guess pick and choose whichever one fits your argument.
With that particular comment out of the way, there's a fairly insightful article here on Amazon and how it fits in with the book market as a whole. It might be a tad anti-Amazon but perhaps not. I don't have enough detailed knowledge about them to say for certain. In any event Bezos may get a close-up exam from regulators sometime in the near future too.
http://www.infotoday.com/searcher/may12/Herther--The-Ebook-Wars--Amazon-Versus-the-Rest.shtml
That was a great read and thanks for the link.
I found this part most interesting........
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Countering claims that ebooks should be much cheaper than print books to align with apps, music, or other media, IPG’s CEO Curt Matthews argues that “an e-book still needs all of the expensive editorial services … and, if it is going to sell, it has to be marketed, distributed, and publicized, just as a print edition must be. And the author royalty on an e-book sale is usually about the same as it is for a print book, even though the list price of the e-edition is lower. We have noted that for our $14.95 paperback the printing amounts to about $1.50. Warehousing and shipping will add another $1.50 to the real cost of selling a printed book. A web retailer should be able to work on a narrower margin than a bricks- and-mortar bookstore, which could lower the price of an e-edition perhaps another $2.00. Deduct these specifically print-related costs from the price of a printed book and the minimum price for a straightforward e-book comes to about $10.00—less than the price of the print version but not some small fraction of the print price. Certainly not 99 cents, and not $5.00 either” (“What Should an E-Book Cost?” Curt Matthews, Feb. 24, 2012 [www.ipgbook.com/why-ipg-has-not-been-able-to-agree-on-terms-with-amazon-news-32.php]).
To me, that is a very strong assumption and the crux of the matter. I remember the same arguments happening when music was moving to MP3 and other formats. The claim was that the recording studios, producers and other equipment would all still be as expensive. To some degree that can be true. If you need a hit producer and have to pay them millions per single, and certain studios in certain places rented then it can be quite expensive. However we also know that the tools out there today match pro levels of performance at a fraction of the cost. We know that social media can generate as much buzz and certainly much morebuzz per dollar spent than conventional marketing and publicizing.
I follow and enjoy several unsigned bands. There is a reason they are unsigned. They keep 100% of everything in terms of merch and music sales versus some small percentage offered by those who would sign them. Often the terms would require them to sale 10-20 (minimum) times more music at the same price point just to make what they make now. Since that isn't a guarantee (especially since they aren't 17 year Disney star types) they keep themselves independent.
I'm sure every publisher believes you need a very expensive team of people to help you get your product to market. The point is that the services side of publishers need to reduce their costs and have the same innovation occur that has occurred on the printing side and then pass those reduced costs along. Amazon is helping that happen and I don't think it is a bad thing.
So I need to post an anti-trust case that Amazon lost in regards to their ill-gotten eBook monopoly or I need to withdrawal my opinion about Amazon's anti-competitve tactics? Seriously?! :no: