Book publishers challenge DOJ e-book penalties against Apple
In a court filing on Wednesday, five major U.S. book publishers objected to the penalties proposed by the Department of Justice against Apple's e-book business, saying the program would change the terms of their respective settlements with the government.
Apple's closing slide in its e-book antitrust case. | Source: U.S. District Court
The publishing houses argue that the DOJ's proposed five-year ban on Apple's so-called "agency model" deals would negatively impact defendants which settled the e-book antitrust case, reports The Wall Street Journal. HarperCollins, Hachette, Simon & Schuster, Penguin Group and Macmillan all settled prior to the Justice Department's trial.
"The provisions do not impose any limitation on Apple's pricing behavior at all; rather, under the guise of punishing Apple, they effectively punish the settling defendants by prohibiting agreements with Apple using an agency model," the documents read.
Apple was found guilty of e-book price fixing in July, with the U.S. government saying the company colluded with book publishers to falsely inflate the price of content sold through the iBookstore. Most of the trial centered around agency model pricing, which allows book publishers to set their own prices under a most-favored nations clause that precludes them from selling the same content elsewhere for less.
Under the terms of a proposed settlement from the DOJ, Apple would not be allowed to enter into agency model agreements for five years. This, the book publishers say, hurts Apple less than it does the parties that settled.
For its part, Apple called the proposal a "draconian and punitive intrusion" on its iBookstore business and plans to appeal the ruling.
Confusing the situation further, the proposed settlement also suggests that Apple be prohibited from entering similar agreements with sellers of "music, movies, television shows or other content that are likely to increase the prices at which Apple's competitors may sell that content." This would extend the proposal's scope far beyond the iBookstore.
Apple's closing slide in its e-book antitrust case. | Source: U.S. District Court
The publishing houses argue that the DOJ's proposed five-year ban on Apple's so-called "agency model" deals would negatively impact defendants which settled the e-book antitrust case, reports The Wall Street Journal. HarperCollins, Hachette, Simon & Schuster, Penguin Group and Macmillan all settled prior to the Justice Department's trial.
"The provisions do not impose any limitation on Apple's pricing behavior at all; rather, under the guise of punishing Apple, they effectively punish the settling defendants by prohibiting agreements with Apple using an agency model," the documents read.
Apple was found guilty of e-book price fixing in July, with the U.S. government saying the company colluded with book publishers to falsely inflate the price of content sold through the iBookstore. Most of the trial centered around agency model pricing, which allows book publishers to set their own prices under a most-favored nations clause that precludes them from selling the same content elsewhere for less.
Under the terms of a proposed settlement from the DOJ, Apple would not be allowed to enter into agency model agreements for five years. This, the book publishers say, hurts Apple less than it does the parties that settled.
For its part, Apple called the proposal a "draconian and punitive intrusion" on its iBookstore business and plans to appeal the ruling.
Confusing the situation further, the proposed settlement also suggests that Apple be prohibited from entering similar agreements with sellers of "music, movies, television shows or other content that are likely to increase the prices at which Apple's competitors may sell that content." This would extend the proposal's scope far beyond the iBookstore.
Comments
ah ha... the plot thicken here... you can kind of read between the lines of what the publishers agreed to.
It appears existing wholesale contract with Amazon has been placed on the clock and there is a limit that expires sometime in the near future.
give it to em boys.
the Amazon influencing media in DC (literally buying the Washington Post) is sickening too.
Quote:
Originally Posted by snova
the Amazon purchasing media in DC (literally buying the Washington Post) is sickening too.
Why is it sickening? Amazon did not purchase Washington Post.
Quote:
Originally Posted by mstone
Why is it sickening? Amazon did not purchase Washington Post.
whatever. if you wanna do this do this hair splitting BS, its really up to you. The fact of the matter is connected to politics in DC and the DoJ actions. dodge it if you want... its clear that Amazon is using politics to their advantage of Apple.
And I also don't understand how this helps anyone except Amazon who was artificially steering prices lower to prevent fair competition.
I hope the DOJ gets a scolding from the President like the ITC recently did. It is certainly deserved.
Quote:
Originally Posted by tribalogical
I still don't understand how Apple can be accused of "price fixing" when they don't set prices (the publishers do).
Because Apple is not playing ball in Washington.. that's why. Its a shake down.
Quote:
Originally Posted by snova
Quote:
Originally Posted by mstone
Why is it sickening? Amazon did not purchase Washington Post.
whatever. you gonna do this hair splitting BS?
Bezos is investing in various things such as his foundation for K-12 and space vehicles, museums, clocks, 20 or so start up companies, Business Insider magazine. There is no reason to tie eBook publishing to the Washington Post sale.
He is a billionaire, he does whatever he wants with his own money.
Quote:
Originally Posted by tribalogical
I hope the DOJ gets a scolding from the President like the ITC recently did. It is certainly deserved.
Dont get your hopes up. President and Amazon are having a love feast. No offense, but you you obviously have not been watching the news about Obama praising Amazon in his recent tour of Amazon facilities.
again. no offense intended. just surprised you missed this news.
Quote:
Originally Posted by mstone
Bezos is investing in various things.... There is no reason to tie eBook publishing to the Washington Post sale.
Right.. sure.. do you know how many newspapers are up for sale? pretty much everyone.. he is based in Seattle has to pick the one in Washington DC. right.. no connection.
Quote:
Originally Posted by snova
Quote:
Originally Posted by mstone
Bezos is investing in various things.... There is no reason to tie eBook publishing to the Washington Post sale.
Right.. sure.. do you know how many newspapers are up for sale? pretty much everyone.. he is based in Seattle has to pick the one in Washington DC. right.. no connection.
Tin foil much?
Quote:
Originally Posted by mstone
Tin foil much?
use your brain much? its not even good business.
Amazon distributes other newspapers in electronic form. Why favor one of your content providers (by buying it) while you distribute its competitors content also... Its like Amazon buy a book publisher. Or Apple buying a music publisher..
I'm done.... go ahead and be ignorant of obvious facts. your choice. tin foil my ass.
Naive much?
Quote:
Originally Posted by snova
use your brain much? its not even good business.
Amazon distributes other newspapers in electronic form. Why favor one of your content providers (by buying it) while you distribute its competitors content also... Its like Amazon buy a book publisher. Or Apple buying a music publisher..
I'm done.... go ahead and be ignorant of obvious facts. your choice. tin foil my ass.
Dude, Bezos != Amazon. He is using his own money not Amazon's. You'll need to find some law that he is breaking in buying Washington Post. He can buy whatever he wants as a private citizen.
The interesing part to me is what kind of financial damage can the DoJ assign to Apple for not allowing Amazon to sell books at a loss??
I have not heard of any financial damages at all. Would they pull a number out of a dark place, and how would they defend this number for not allowing Amazon to sell at a loss? think about it.
Apple was not even using the same business model as Amazon. They have NEVER used wholesale money. Its always been agency. The DoJ as said there is nothing illegal about agency model. Apple has being doing it for years with the pricing of their own products (Macs, iPad, iPhones, Music etc). How come DoJ does not come after Amazon AND Apple for setting their own price on their own products which are sold at retail at Amazon for the same price they sell at the Apple store? Price fixing right? Hypocrites..
How come Amazon sells music downloads at about he same price as Google and Apple? price fixing too, right? Someone call the DoJ!! Get the net. Amazon, Google, and Apple must be all price fixing music download via Agency model!!! $1.29 song everywhere. This is why music prices have skyrocketed!!! oh wait.. they have gone down you say? hmmm..
Hypocrites!!! @#$^@$%
this whole thing stink of conspiracy and abuse of our legal system by Amazon and politicians in Washington. These are they guys who should be put on trial for messing with the free market when they have a monopoly and its to their advantage to call in DoJ when their monopoly is threatened and Apple is not taxed at the full tax rate that Amazon is taxed at.
scratch that.. they would have to make an actually profit for taxes to come into play.
someone needs to go to jail and I think its someone in Washington, DoJ, Justice System and at Amazon for bribery and corruption.
ok.. time to take my chill pill now.
AmazonWashingtonPost needs to get it's well-deserved comeuppance.
Amazon wasn't suing Apple so why would there be damages?
I don't agree with this at all. I think each company should run their business accordingly, and contrary to popular belief Amazon is restricted from doing what they were doing before.
Btw I believe Apple uses the wholesale model for TV shows/movies.
Transitive property of politics: If Amazon=Bezos and Bezos=Washington Post then Washington Post=Amazon
The judge is the problem. How she interpreted Apple was at fault for providing a platform for publishers to collude still makes my head spin. Judge that do not understand tech and business has no place being there in the first place. This is only interesting because publishers settled for two-year ban from agency model...and by forcing Apple to a 5-yrs ban...well, where do publishers go besides Amazon for the next 5-yrs? DOJ is screwing everyone but Amazon!
I said this many times before, if Apple can get out of consumer ebooks completely for the next 5-yrs now, they should, just to prove two points: 1) DOJ is dumb! 2) neither Amazon nor ebook readers are victims here! Publishers are making money, Apples gets their 30%, readers still paying less than print version! WTF, why is there always victims in this kind of bs? The saddest part, the judge is clueless at cutting through the phony shit DOJ came up with.
Get out now Apple! Allocate resources to something else thing better, like Apple iTV! Wait a few years and let those publishers come begging for agency model again!
What wholesale contracts? The publishers already switched those to agency. That was part of the alleged collusion. Took away retailer pricing control.
If they really wanted to restrict pricing control by the publishers the DOJ could have done things like restrict MFN clauses to items only in the first year, allow retailers to drop prices exclusively but only for say 8 weeks total in that year and only two weeks at a time. Perhaps add rules like if the publisher doesn't agree to the proposed sale discount the retailer can only do it if willing to pay the 30% of the publisher price (ie, taking the profit loss themselves completely), upper limits on pricing based on category of book like how Apple did it but perhaps with lower limits, particularly after 6-12 months (when print goes to paperback).
And as this trial was about books all other Apple Stores should not be included.