DOJ claims Apple's changes to in-app purchase rules were aimed at Amazon

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  • Reply 101 of 161
    Correct. The publishers have dropped Apple's model, though it really seemed the fairest model since it would allow entrants into the market. Where the DOJ gets the story completely wrong is that Apple's model would have allow competitors, meaning competitive prices. Amazon's model is to sell at a loss, which effectively prevents any competition, no ebook store can loose money on every book & remain in business for long. So now DOJ has to sue Amazon for being a monopoly.

    Cheers !
  • Reply 102 of 161
    lkrupp wrote: »
    What if Apple simply gets out of the ebook business. Let everybody buy from Amazon with the Kindle app, or from B&N. Can the government force Apple to sell ebooks? It wouldn't be that big of a deal and probably doesn't represent much profit. Just let the DOJ deal with a complete Amazon monopoly.

    Amazon is too direct a competitor with the Kindle line. Besides, ebooks make too much sense on a phone or tablet for Apple to just avoid. DoJ just needs to accept that selling ebooks at or below cost is preventing any competition, which is the definition of a monopoly.
  • Reply 103 of 161
    nikiloknikilok Posts: 383member
    It's clear that the DOJ is seeing things with a smirky vision. How exactly does setting the same price for books in all stores become an anti competitive practice ?

    The publishers in fact like the agency model and it would impact there business without it.
    I think no matter the outcome of this lawsuits the publisher still has the power to decide what price to set the books at. Now I understand that every book has one publisher responsible for it?
  • Reply 104 of 161
    nikiloknikilok Posts: 383member
    Question: why would a publisher allow Amazon to sell a book for 10$ and not allow Apple to do the same ?
    That is the root cause of this problem right ?
    And that's were the corrupt practices start off.
  • Reply 105 of 161
    rptrpt Posts: 175member

    Quote:

    Originally Posted by politicalslug View Post



    Am I the only person here who realizes that Amazon's old pricing model single handedly destroyed the market for big box bookstores in the US? If anything Apple's pricing would have saved that entire industry by setting ebook pricing more in line with their physical counterparts. Amazon's old strategy has worked to destroy something that I believe was essential to our culture. People don't go to bookstores anymore. Amazon put them all out of business. Only now the DOJ steps in. This is so very wrong. Where we're they then? Amazon's whole strategy has always been to destroy the competition by underpricing them to the point of being uncompetitive. This isn't how I want my tax money spent. I like physical books and physical book stores. What is the DOJ doing about that? I want to see the government forcing booksellers to sell ebook sat the same price as physical books and not a dime less. That is the only way we can get our book stores back. Who's with me?


     


    I totally agree about the value of the physical book, given it is a piece of literature that I would like to revisit, however most of what I read doesn't come into this category and availability and price becomes more important when I need a book to pass some hours on a plane or whatever.  However for what I consider quality I am willing to pay what a written book costs, but I am not willing as a matter of principle to pay a price dictated by any government.

  • Reply 106 of 161
    solomansoloman Posts: 228member
    One word: Napster

    (Groan. AI, do you have a let's-see-who's-the-most-stupid contest on somewhere?)

    Wrong, Napster helped but it wasn't around very long
  • Reply 107 of 161
    mstonemstone Posts: 11,510member

    Quote:

    Originally Posted by jragosta View Post




    Quote:



    Originally Posted by Soloman View Post



    Funny because all the bookstores I go to have plenty of people in them. It's the music stores that Apple killed that I really miss.




    Really? Maybe you should talk to Borders. How many people are in the Borders stores? And how many independents closed? One estimate says that over 20% closed in the past decade - and that may be low.


     


    Amazon does have a more efficient model than the traditional bookstore. Many of their books are sold to the end users indirectly. Amazon doesn't necessarily keep all those titles in stock. A bookstore can only sell what they have on the shelf.


     


    I used to go to the Borders near my house all the time just to browse around. I would buy something maybe 20% of the time but mostly I was using the store for free entertainment. I loved looking through those big coffee table type photography books but I seldom bought one unless it was on the $1 discount table outside.


     


    Their in-store coffee shop probably made more money from me than their books did.

  • Reply 108 of 161
    jragostajragosta Posts: 10,473member
    nikilok wrote: »
    Question: why would a publisher allow Amazon to sell a book for 10$ and not allow Apple to do the same ?
    That is the root cause of this problem right ?
    And that's were the corrupt practices start off.

    You're missing the point. Publishers didn't 'allow' Amazon to sell the books for $10. Under the distribution model that Amazon was using, Amazon bought the books from the publisher and could sell them at whatever price they wanted. So let's take a $25 new release. The publisher sells it to Amazon and everyone else for $15. Smaller bookstores have to make a profit on it, so they sell it for $20. Amazon is willing to take a loss and sells it for $10.

    Apple would have gotten the same $15 price under that model. Under Apple's normal 30% margin, they would have had to list it for just under $21.

    Amazon used predatory pricing on some books to try to lock up their market position. Because of their size, they could get away with taking a loss on some items. That is illegal in the US.

    Under Apple's model, the publisher sets the price that they want to sell the book for and everyone gets the same price from the publisher. It doesn't put smaller players at as much of a disadvantage as Amazon's predatory pricing.
  • Reply 109 of 161
    gatorguygatorguy Posts: 23,469member
    jragosta wrote: »

    Amazon used predatory pricing on some books to try to lock up their market position. Because of their size, they could get away with taking a loss on some items. That is illegal in the US.

    Under Apple's model, the publisher sets the price that they want to sell the book for and everyone gets the same price from the publisher. It doesn't put smaller players at as much of a disadvantage as Amazon's predatory pricing.

    I'm not a lawyer but I can still read to find answers. The way you've used "predatory pricing" appears incorrect.

    As far as I can tell it's not illegal to sell items below cost in the US. It's done all the time and doing so is not proof of illegal predatory pricing either. When you make broad blanket statements like you have it can confuse readers, particularly those outside the US less familiar with US law. It's ends up very misleading tho it may not have been your intent..

    Using "loss-leaders" as Wal-mart, Amazon, Target and other discounters do, even a category of "loss-leaders" like "best selling books" within a larger book segment, as part of a pricing strategy to maximize overall profits is not by definition "predatory pricing" nor is it illegal. If you disagree then a simple authoritative cite will be sufficient to show I'm incorrect.
  • Reply 110 of 161
    hill60hill60 Posts: 6,992member

    Quote:

    Originally Posted by mstone View Post


    It would be interesting if Apple just sold e-books at 30% higher price than Amazon and people still bought them.



     


    ...or 70% lower, beating Amazon at their own game.


     


    Ask the publishers how much they currently make from eBooks and pay them more upfront in cash for exclusive rights to everything.


     


    It would take only a small amount of Apple's cash reserves and destroy the Kindle within a couple of years.


     


    What's the DoJ and the moronic judge they have in their pocket going to do?


     


    Demand Apple increase eBook prices?

  • Reply 111 of 161
    hill60hill60 Posts: 6,992member

    Quote:

    Originally Posted by Gatorguy View Post



    Geesh, over the top much with a double-scoop of hyperbole? From the AllThingsD article:



    In its latest filing, the DOJ said that the remedy adjustments Apple proposed “imposed virtually no limitations” on its conduct, beyond those established by the DOJ’s earlier settlements with the publishers involved in the case.

    “Quite simply, Apple wants to continue business as usual, regardless of the antitrust laws,” the DOJ said in its filing. “Under these circumstances, this Court should have no confidence that Apple on its own effectively can ensure that its illegal conduct will not be repeated. There must be significant oversight by someone not entrenched in Apple’s culture of insensitivity to basic tenets of antitrust law.”

    http://allthingsd.com/20130823/doj-softens-proposed-apple-ebook-injunctions-slightly/?mod=atd_homepage_carousel


     


    Again with the "illegal conduct".


     


    Apple should sue for libel and force the DoJ into a criminal case.

  • Reply 112 of 161
    jragostajragosta Posts: 10,473member
    gatorguy wrote: »
    I'm not a lawyer but I can still read to find answers. The way you've used "predatory pricing" appears incorrect.

    As far as I can tell it's not illegal to sell items below cost in the US. It's done all the time and doing so is not proof of illegal predatory pricing either. When you make broad blanket statements like you have it can confuse readers, particularly those outside the US less familiar with US law. It's ends up very misleading tho it may not have been your intent..

    Using "loss-leaders" as Wal-mart, Amazon, Target and other discounters do, even a category of "loss-leaders" like "best selling books" within a larger book segment, as part of a pricing strategy to maximize overall profits is not by definition "predatory pricing" nor is it illegal. If you disagree then a simple authoritative cite will be sufficient to show I'm incorrect.

    There's a big difference between Walmart offering cheap milk and Amazon offering ALL best sellers at below cost. While loss leaders are legal, predatory pricing is not. And predatory pricing is far more applicable in a case like Amazon's where they had something like 80% market share in eBooks than in a case like Walmart or Target.

    Predatory pricing is the practice of selling something below cost in order to keep competitors out of a market. When Amazon was selling all best sellers at well below their purchase price, it appears that they are engaging in predatory pricing. There's certainly far more justification in going after them for their behavior than this silly fishing expedition they chose to go after Apple.
  • Reply 113 of 161
    gatorguygatorguy Posts: 23,469member
    jragosta wrote: »
    There's a big difference between Walmart offering cheap milk and Amazon offering ALL best sellers at below cost. While loss leaders are legal, predatory pricing is not. And predatory pricing is far more applicable in a case like Amazon's where they had something like 80% market share in eBooks than in a case like Walmart or Target.

    Predatory pricing is the practice of selling something below cost in order to keep competitors out of a market. When Amazon was selling all best sellers at well below their purchase price, it appears that they are engaging in predatory pricing. There's certainly far more justification in going after them for their behavior than this silly fishing expedition they chose to go after Apple.


    Despite your claim of a "big difference", the actual facts show both Amazon and Walmart have nearly identical book pricing.

    Have you looked at Walmart book shelves anytime in the past couple of years? Try it. In general half the publishers' suggested retail price is pretty common for both paperbacks and hardcover books and I think at least 40% off is the policy. One source claims they offer an overall average of 42% off list as does Amazon. (Use a web search if you don't want to physically look at Walmarts in-store prices).

    I don't recall my local Barnes and Noble or Books-A-Million selling hard copy at 40-50% discounts across the entire segment including "best-sellers". How can Walmart do that? Well, they don't depend on books alone for revenue with volume selling plus profits from other products that aren't discounted as heavily. Sounds much like a box-store version of Amazon doesn't it?

    Standalone brick-n-mortar dedicated book-sellers are not likely to successfully compete with "at least 40% off" as a standard for very long, and so Walmart's book pricing would also be an example of illegal predatory pricing in your opinion?
  • Reply 114 of 161
    inklinginkling Posts: 731member
    Yes and you can find similar Amazon policies that were aimed at Apple and others. Amazon's scheme to sell popular ebooks below cost was clearly intended to destroy what little competition they had. It's a standard practice for would-be monopolies.

    I really do hate how lawyers with agendas try to twist our minds. In football, competition means tackling the other team's quarterback when it has the ball. In business, it means adopting policies that hurt competitors. Fake moralizing when Apple does something but saying and doing nothing Amazon does things far worse doesn't impress me.

    This is Chicago machine politics at its worst, which isn't surprising for an administration, President and DOJ chief, who come from Chicago. All this was predictable in 2008. I don't know why we find it surprising today.
  • Reply 115 of 161
    gatorguygatorguy Posts: 23,469member
    jragosta wrote: »

    Predatory pricing is the practice of selling something below cost in order to keep competitors out of a market. When Amazon was selling all best sellers at well below their purchase price, it appears that they are engaging in predatory pricing..

    Perhaps you meant to say "IF Amazon was selling all best-sellers at well below their purchase price"? I missed your evidence that all best-seller books are sold below cost at Amazon.

    An easy way to question your claim of Amazon selling "way below cost" on every best-seller comes from Apple themselves. With publisher's setting the fixed minimum retail price at $12.99, and at the same time giving Apple a guarantee of 30% from each sale, the cost of a best-selling ebook would be about $9.09 wouldn't it? Amazon's policy of selling them for $9.99 is quite obviously more than the price the publisher would sell it to Amazon for.
  • Reply 116 of 161
    trumptmantrumptman Posts: 16,464member

    Quote:

    Originally Posted by 9secondko View Post


    No excuses.  iTunes is available on Mac and PC. Easily done on Kindle.


     


    That's really the only monopolistic, anticompetitive behavior going on. 



     


    Your ridiculous claim might have a chance of persuading if it could be shown that Apple had created an iTunes for Kindle app or iTunes for Android app, submitted it and had it declined. The point is that Apple hasn't and won't do this. Amazon has created all the apps that allow your purchased content to be used everywhere. Heck, they have even created apps to allow access to your content via a web browser. That is part of what shows Apple is uncompetitive and also how they are failing to innovate. Back in the day when Apple didn't feel like the behemoth they are now, they made sure Quicktime and iTunes were available on all major platforms at the time. Now they barely care to even service Windows and heck let's be honest, they aren't even updating their software on the Mac anymore. iLife and iWorks haven't been updated in YEARS.


     


    Quote:

    Originally Posted by Cpsro View Post


    Theoretically Apple could, if it had the appropriate agreements in place with publishers. But would Apple want to get into the tedious, boring business of monitoring the market and adjusting prices on hundreds, thousands or even tens of thousands of items, and risk or choose to take a loss? I don't think so.



     


    No. Apple cut an uncompetitive deal to make sure their profit margin was never below 30% on a sale. Amazon will take less and thus their prices were cheaper. Apple didn't like that so they worked with publishers to make sure everyone selling a book would have to make a 30% profit and thus it would raise prices for the industry overall.


    Quote:

    Originally Posted by nikilok View Post


    The publishers can make up for that , by demanding there requirements to companies digitally distributing books.. Like Apple and Amazon right ?


     


    Ah I see the picture now.. Why would Publishers have to be middle men, between the author and the digital book store.


    The Author can go directly to Apple , like App developers publish apps to the app store.


     


    If that happened, the Publishers go out business. Great so why not adopt that model, authors publish there books themselves on digital stores without the need for a publisher :)



     


    Self-publishing has been helped along tremendously by Amazon. Anyone without fanboy goggles on can see that Amazon has been the innovator in the epub space. Apple has been a laggard that has hoped to cash in not by being the best or offering the best experience, but by being the only app out there that has access to an actual online store since they banned all other competitors from allowing access to their own e-book stores.


     


    Quote:

    Originally Posted by 9secondko View Post


    Not to mention they should be grateful Apple has the Kindle App on the iOS devices.


     


    I don't see music and movies sold through itunes on the Kindle...


     


    Maybe the DOJ needs to look into THAT instead...



     


    The DOJ would but Apple has and would never do what you claim. They would never make iTunes for Android or Kindle. They wont make it for Windows Phone either. In fact your claim shows the anti-competitive change that has happened at Apple. When computers were the digital hub that managed your media, they made sure iTunes was available on Mac and Windows. Now when they have declared that the tablets and phones are powerful enough to be the digital hub themselves, there is no iTunes for Windows phone, Android and Kindle. Apple won't make it because they are no longer an innovator and trying to climb up to the top of the mountain from being an underdog. Rather they sit on top and seek solutions to make sure no one can challenge them with competitive innovation. Thus they are taking anti-competitive steps to make sure remain on top not from innovation but from legal agreements.


     


    Quote:

    Originally Posted by Soloman View Post



    I'd like to know if Google takes 30% from Amazon for ebooks purchased through the Kindle app. I also agree that there should be tiered percentages. Amazon handles the storage and delivery of their content alleviating Apple of that responsibility so why shouldn't they pay less?


     


    I don't think Google takes any percentage from Amazon ebook percentages from what I've read. You raise a relevant point. Providers like Amazon handle all the server details themselves so why does Apple get to charge for work others do?


     


    Quote:

    Originally Posted by nikilok View Post



    Question: why would a publisher allow Amazon to sell a book for 10$ and not allow Apple to do the same ?

    That is the root cause of this problem right ?

    And that's were the corrupt practices start off.


     


    The publishers never stopped Apple from lowering the price. Apple can't lower the price and keep their 30% margin. So they crafted a deal whereby the publishers determined the prices for all resellers rather than allowing resellers to pay a wholesale price and then reselling at whatever price they desired.


     


    Quote:

    Originally Posted by mstone View Post


    Amazon does have a more efficient model than the traditional bookstore. Many of their books are sold to the end users indirectly. Amazon doesn't necessarily keep all those titles in stock. A bookstore can only sell what they have on the shelf.


     


    I used to go to the Borders near my house all the time just to browse around. I would buy something maybe 20% of the time but mostly I was using the store for free entertainment. I loved looking through those big coffee table type photography books but I seldom bought one unless it was on the $1 discount table outside.


     


    Their in-store coffee shop probably made more money from me than their books did.



     


    It's called progress. I can recall movies like "You've Got Mail" bemoaning how big box book resellers were putting smaller bookstores out of business because said bookstores couldn't afford retail space for people to sit around all day drinking lattes and browsing picture books. Instead they had to sell books. The big box stores also could get loss leaders like boxed Harry Potter sets and other major best sellers to push major traffic through their stores that smaller and independent book retailers couldn't demand. I'm not saying you're defending Borders, I'm just noting how it is funny how people forget the creative destruction that has occurred all along and just expect it to stop because now Apple in the game and is willing to help stop progress to protect their 30% and hardback cover prices.


     


    Quote:

    Originally Posted by jragosta View Post



    You're missing the point. Publishers didn't 'allow' Amazon to sell the books for $10. Under the distribution model that Amazon was using, Amazon bought the books from the publisher and could sell them at whatever price they wanted. So let's take a $25 new release. The publisher sells it to Amazon and everyone else for $15. Smaller bookstores have to make a profit on it, so they sell it for $20. Amazon is willing to take a loss and sells it for $10.



    Apple would have gotten the same $15 price under that model. Under Apple's normal 30% margin, they would have had to list it for just under $21.



    Amazon used predatory pricing on some books to try to lock up their market position. Because of their size, they could get away with taking a loss on some items. That is illegal in the US.



    Under Apple's model, the publisher sets the price that they want to sell the book for and everyone gets the same price from the publisher. It doesn't put smaller players at as much of a disadvantage as Amazon's predatory pricing.


     


    It's not illegal. You're pulling this out of your butt and just making stuff up at this stage. Loss-leaders are a well known and well used business practice. Apple was pretty predatory themselves back when they offered an iPod for free with every Mac you bought around the beginning of school each year. Now of course they have given up that promotion because they believe they are above the fray of having to innovate and compete.


     


    Quote:

    Originally Posted by jragosta View Post



    There's a big difference between Walmart offering cheap milk and Amazon offering ALL best sellers at below cost. While loss leaders are legal, predatory pricing is not. And predatory pricing is far more applicable in a case like Amazon's where they had something like 80% market share in eBooks than in a case like Walmart or Target.



    Predatory pricing is the practice of selling something below cost in order to keep competitors out of a market. When Amazon was selling all best sellers at well below their purchase price, it appears that they are engaging in predatory pricing. There's certainly far more justification in going after them for their behavior than this silly fishing expedition they chose to go after Apple.


     


    Again you are just making up nonsense now. It wasn't nor has it ever been all best sellers and the complaint by publishers wasn't that Amazon was losing money to gain marketshare on epub books, but that Amazon had enough leverage to demand epub pricing on new books while publishers preferred to roll them out as expensive hardcovers first and wanted to save epub for when paperbacks rolled out. Thus you would have had your choice of an expensive $25 hardcover book and then several months later a $9.99 paperback along with Amazon offering the $9.99 epub. Apple stepped in and offered a deal to allow publishers to set prices and they would choose (with Apple's help) to raise the price of epub books in an attempt to prop up the price of hardcover books.


     


    Again no one would ever have defending anyone doing this with music where Apple was the innovator in price. Music publishers hated singles and wanted to use the singles to drive album sales. Physical media was $14-16 per album and $2-3 per single. People began pirating and Apple said lower the price a bit and people will pay it because it is convenient. Thus $10 albums and $1 singles and the rest is history.


     


    Guess who is pushing book singles now?


     


    The article is a good read and the reasoning here shows how Amazon is innovating and Apple is just sitting on their hands.


     


    No, the clinchers were these:


    1. The ability to close an ebook on one device, then open it on another – your iPhone, for example – and start exactly where you left off (Amazon calls this Whispersync).


    2. The “My highlights” page. As a book reviewer and researcher, being able to view every passage I’ve highlighted or made a note about while reading on the Kindle app is magical.


    3. Exclusive content such as Kindle Singles. These quick, cross-genre reads are longer than a magazine feature but shorter than a printed book – Amazon has sold 5m of them since their 2011 launch.


     


    So, against my own better judgement, I've been dazzled into submission by Amazon’s industry-leading innovation. And more surprising than my personal turnaround has been my rapid switch as a book publisher, from considering selling my titles exclusively through independent booksellers, or at the very least trying to promote those channels as a preference, to actually considering taking up Amazon’s offer of higher royalties for exclusive sales rights for the first six months.


     


    As a publisher, Amazon is a joy to work with. It sells a lot of books. It pays high royalties. And it makes ebook distribution incredibly simple. Like about 764,321 times easier than all of its competitors, aside from Kobo, which has also recognised the value of supporting small publishers and self-publishing authors.


     


    Who is cutting out the middleman, making it easier to self-publish, bringing down prices, improving quality and access all while allowing you to read anything you've purchased everywhere? It is Amazon, not Apple who is the innovator here. That is why in addition my iPhone, iPod nano, iPod Shuffle, Macbook Pro and iPad Mini, I own a Kindle Touch 3G.


     


    Meanwhile Apple will finally intro iBooks for Mac OS X Mavericks not as an app, but as a tentpole feature to upgrade your OS. This is backwards. You shouldn't need to upgrade your OS to be able to read books you've purchased. Good luck ever finding or seeing an iBooks app for Windows, Kindle, Android or anything you can desire.

  • Reply 117 of 161
    solomansoloman Posts: 228member
    jragosta wrote: »
    Amazon used predatory pricing on some books to try to lock up their market position. Because of their size, they could get away with taking a loss on some items. That is illegal in the US

    Loss leaders are not illegal. Now if Amazon sold every ebook for a loss than that would most certainly constitute predatory pricing and absolutely illegal. The biggest offender of predatory pricing and killing off the competition is Walmart yet they've managed to get away with it.
  • Reply 118 of 161
    gatorguygatorguy Posts: 23,469member
    hill60 wrote: »

    Ask the publishers how much they currently make from eBooks and pay them more upfront in cash for exclusive rights to everything.

    It would take only a small amount of Apple's cash reserves and destroy the Kindle within a couple of years.

    What's the DoJ and the moronic judge they have in their pocket going to do?

    Demand Apple increase eBook prices?

    The suggested remedy for Apple's "antitrust violations" :\ would preclude that.
  • Reply 119 of 161
    While I've never been particularly fond of apple requiring developers to adopt their agency model for in-app purchases, it is [B]Their[/B] prerogative. There's [B]No[/B] misuse or unlawful activity involved with this action. -Despite apple's intentions! It doesn't even matter if apple Designed these terms specifically to raise the prices offered in a third-party app. When developers chooses to build an app for a platform, they must comply with that platform's terms of use. If they disagree or have a problem with those terms, it's [B]Their[/B] prerogative to abstain from developing for it. I'm flabbergasted that the DOJ was able to convince the judge to consider this as evidence in the [B]Completely[/B] separate ebook price-fixing suit. It says to me that the judge is obviously incapable of differentiating law from aggressive competition practices. Apple need to file a motion a new one asap.
  • Reply 120 of 161
    Article needs fixed:

    The Department of Justice on Friday rev ....

    Should read:

    The Department of Extortion on Friday....

    If apple was losing money overall this suit would not exist. It is becoming a practice in US to have to take care of the ruling class I'm afraid. Hey maybe this is why amazon doesn't want to actually earn any money or at least show any profits.
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