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Connecticut AG To Grill Amazon, Apple Over E-Book Price Fixing

Posted by Soulskill on from the jig-is-up dept.

suraj.sun tips news that Connecticut's Attorney General has demanded a meeting with Apple and Amazon to discuss anti-competitive pricing methods in the e-book market. From Ars: "Richard Blumenthal says that he wants representatives from both on-line giants in his office ASAP to discuss what Blumenthal calls their 'most favored nation' arrangements with big book companies like Macmillan and Simon & Schuster. The crux of the MFN concept is that a given product maker must offer a given distributor the lowest price it's offering anyone. If a competing distributor gets a price break, they get it too. 'The net effect is fairly obvious,' Blumenthal warned in his letter to Amazon (PDF), 'in that MFNs will reduce the publisher's incentive to offer a discount to Amazon if it would have to offer the same discount to Apple, leading to the establishment of a price floor for e-books offered by the publisher.'"

11 of 107 comments (clear)

  1. Zero cost copying by FriendlyLurker · · Score: 4, Interesting

    Of course ebook prices are fixed (amoungst other digital "goods") - how the hell do you price something that can be copied infinitely at next to zero cost? And therein lies the problem...

    1. Re:Zero cost copying by FooAtWFU · · Score: 4, Insightful

      It's one thing to say "This book will cost $14.99 from our store." It's quite another to say "All the books we sell will be $14.99, and if you let us sell your book you're not allowed to sell this book anywhere else for cheaper."

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    2. Re:Zero cost copying by AHuxley · · Score: 5, Informative

      http://en.wikipedia.org/wiki/Lysine_price-fixing_conspiracy should give some insight into the cartel issue and why it needs to be fixed.

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      Domestic spying is now "Benign Information Gathering"
    3. Re:Zero cost copying by commodore64_love · · Score: 3, Insightful

      This makes no sense to me.

      If I want to sell my books to amazon for $5 while charging $6 to everyone else, why does it matter? Why is the Government's General Attorney interfering with these transaction that only involves two people (me and the amazon rep)? This looks to me like some guy who has too much time on his hands, or is possible looking for an issue to hang his reelection campaign upon.

      Note that this is different from the price-fixing that CD companies were doing - forcing stores like Kmart and Walmart to raise prices from $9 to $12 minimum. That could be argued to be Damaging the consumer, and was found to be an illegal cartel (record companies acting as one unit).

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  2. Amazon? by MozeeToby · · Score: 3, Insightful

    Didn't Amazon just hand over its right to price many new releases to the publishers? I seem to remember Amazon wanting to charge $10 for a new (only in hardcover) release, but the publishers forcing them to increase the price or not carry the books. Of course, that doesn't say anything about cheaper books that are out in paperback...

  3. AUGH by Pojut · · Score: 5, Insightful

    Fucking e-books. Why does it cost more to buy an e-book than it does to buy a dead-tree paperback? wtf?

    I absolutely adore my nook, but it's filled with public works and books that have been gifted to me...I refuse to pay $10 for a digital copy of a book.

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    Living With a Nerd
  4. I don't get it. by Spazntwich · · Score: 3, Insightful

    Aren't e-books selling at levels competitive with physical books?

    Aren't they luxury items in the first place?

    If the previous two points are true as I believe, it seems kind of silly that the best use of the Connecticut AG's time is making sure people aren't overpaying a few bucks for items they're obviously already comfortable purchasing at that price.

    I would rather see a legal investigation into Amazon's and Apple's patent tactics and such. Their portfolios and legal strategies likely cause many more customers of many other companies to overpay many more total dollars for zero value.

    But who the fuck am I?

  5. Grandstanding by unixan · · Score: 4, Insightful

    This is just grandstanding by a politician running for office. Neither Amazon nor Apple are headquartered in Connecticut, which makes the appropriate action for this state AG to make a filing to the FTC.

    Except, of course, filing with the FTC just doesn't sound as exciting to voters.

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  6. Talking to the wrong people by SuperKendall · · Score: 3, Interesting

    It seems absurd to me to bring in Amazon and Apple over this, when they aren't the ones who set prices (Amazon used to).

    I don't see, at all how Apple and Amazon demanding the lowest price offered sets any kind of "floor" beyond the natural floor of the lowest price the publisher is willing to charge. The only thing it affects is the ability to charge a lower price at one vendor than another, but if that were OK how would that help the consumer? That to me would seem to be used to squeeze out a competitor and generally shrink the book market to one clear leader, who could then more easily collude with publishers to keep a higher average price for books beyond loss leaders...

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    "There is more worth loving than we have strength to love." - Brian Jay Stanley
  7. That doesn't hold by Mr.+Underbridge · · Score: 4, Insightful

    it seems kind of silly that the best use of the Connecticut AG's time is making sure people aren't overpaying a few bucks for items they're obviously already comfortable purchasing at that price.

    By that logic, there's never been a damaging monopoly at all - after all, by definition, all the customers are comfortable paying the price charged or they wouldn't be customers, right?

  8. Folks it is election season! by ScaredOfTheMan · · Score: 5, Informative

    "Richard Blumenthal (born February 13, 1946) is an American lawyer and politician. A member of the Democratic Party, he has been Attorney General of Connecticut since 1991. He is a candidate in the 2010 U.S. Senate election for the seat currently held by Christopher Dodd.[5]"

    Nuff said.

    http://en.wikipedia.org/wiki/Richard_Blumenthal