DoJ Files Suit Against Apple, Ebook Publishers

forkfail writes "The Department of Justice has filed suit against Apple and a number of book publishers, including Hachette SA, HarperCollins, Macmillan, Penguin and Simon & Schuster, claiming that they worked in collusion to artificially rig prices on eBooks."

Comments

Re:Having solved all other problems

[oodaloop]

I think the DoJ may be able to do more than one thing at a time.

I hope they get raked over the coals for this

[Golgafrinchan]

This was such a blatant price-fixing scheme among the publishers that it's surprising to me that it took the DOJ this long to take action. That said, based on what I've read I'm not completely convinced of the extent to which Apple was involved in this. Yes, they agreed to the new agency pricing model, but it seems to me that they could try to argue, "Hey -- the publishers came to us with this idea. We didn't know they wanted to go that route to reduce competition and put pressure on Amazon! Honest!" But if there's a paper trail mentioning Amazon, I think Apple is toast.

And regardless, I hope the publishers get crushed on this one. While I won't go so far as to suggest that they don't serve any useful purpose anymore (as some people do), they _are_ dinosaurs and need to be dragged into 21st century competition. This should do it.

Re:I hope they get raked over the coals for this

[DurendalMac]

The thing is....why didn't this happen YEARS ago with physical books? Those have been price gouged for a long, long time, especially when they have 12 editions with maybe a handful of pages' worth of difference between the first and the last.

Re:I hope they get raked over the coals for this

[Golgafrinchan]

It's an interesting point. But the reason is that to my knowledge, there _wasn't_ any price fixing prior to ebooks. I believe that publishers have always sold physical books to retailers using the wholesale model, and then leave it up to the retailers to set the price paid by customers. As long as the publishers didn't conspire to set those wholesale prices collectively, then there's no price fixing. There may have been some 'tacit' collusion (in that they don't formally agree upon prices, but that they follow each other like airlines), but that's generally not illegal in the US.

The issue in this case is that there _is_ evidence that the publishers collectively decided to adhere to the same pricing scheme. That is illegal.

Re:I hope they get raked over the coals for this

[k4hg]

Apple will not be toast.

Worst case they pay a small (for them) fine without admitting wrongdoing, and promise never to do it again. What happens then?

Well, Apple can sell their books at cost or below because their profit comes from hardware. The iTunes store is a tiny blip in Apple's revenue, and ebooks a small part of that tiny bit. The publishers can raise the price Apple, Amazon, and others pay for ebooks, and will to preserve their income. Amazon gives away their hardware at cost, so somewhere they need to start making profit on media. It is widely believed that Amazon is selling many books below publisher's cost in order to drive others out of the business. Once it is clear that Apple can (and will because they have lost the agency model) match Amazon's prices and is in the ebook business to stay, Amazon won't be so anxious to lose money. Then prices will come back to where they have been, maybe even higher.

Apple still breaks records every quarter, Amazon chugs along on its slow growth curve, the publishers keep making some money, and 99% of authors still starve. Nothing's going to change.

Re:I hope they get raked over the coals for this

[ColdWetDog]

Nobody is getting 'crushed' on this. At worst, a couple of publishers and Apple will pay a fine. Most likely they will sign something that said 'we didn't really do anything, but we agree not to do it again'. Some lawyers will make money. The DOJ lawyers will carve another notch in their desks.

Consumer prices won't go down. (But they will go up).

Re:I hope they get raked over the coals for this

[ZombieBraintrust]

They have an issue with it because they can show that prices went up not down. You can't say the contract was pro compitition and then have a uniform price increase amoung all the publishers involved.

Re:I hope they get raked over the coals for this

[bws111]

You couldn't be more wrong, as is apparent from the fact that prices went up, not down.

This was not a case of Apple coming in and saying 'Amazon is selling books for $10 - that is too much. We want a better price than that.' This WAS a case of Apple saying 'Amazon is selling books for $10 - that is too little. We want to sell them for $20. BTW - make sure Amazon can no longer sell them for $10.'

Re:I hope they get raked over the coals for this

[Mashiki]

Damn right there's blatant price-fixing. Most people I know who own ebook readers pirate the things just out of spite because of the prices. Nothing quite like seeing prices like this:

$9.35 kindle
$7.99 kobo
$3.99-4.99 paperback

Yeah fuck and you guys. If I already own a copy, I'd be pirating it at that price too.

Re:Having solved all other problems

[Troyusrex]

Well, price rigging is an important issue. If it were gas that they were doing this with and your gas started costing $4+ a gallon you'd care more. Oh... wait....

Finally the E-Book Publishers are getting caught

[gubers33]

While the oil companies continue to make record profits as they keep the price of gas jacked up... cause that isn't collusion.

Re:Really?

[Anonymous Coward]

Well. Since ebooks seem to be priced at higher than print book prices....no. no they are not cheap at all.

Re:Having solved all other problems

[Moryath]

You'll never get gas price rigging solved.

The Republicans don't want it solved, they've blocked EVERY attempt to put proper regulation on the oil speculation market (which is where the prices are being driven up far beyond normal market pricing) because they get tons of donations from the oil speculators and kickbacks from oil industry execs in exchange for federal subsidies.

Re:Just wrong on all counts

[gstrickler]

I have the same book in the other bookstores. I have no control over the price. They give me what they want, which is half of what Apple gives me.

If you have control over whether it's in those other bookstores, then, yes, you do have control over the price. You don't like their terms, don't publish it there. That's how you control it.

Re:Having solved all other problems

[Anonymous Coward]

It has nothing to do with whoever is in office. The US has no control over an internationally traded commodity and never will. The US can only *temporarily* affect the market. The US can dump several million barrels on the market and OPEC will just cut production the same amount. No effect. So regardless of which party you hate they can do nothing and anyone claiming they can is a liar.

Until the US can import no oil at all they are subject to the international price and even then I am not certain though I would think you would have more power to control domestic prices if it is all internal. Now the subsidies are another matter, but I don't know enough about them to know whether they are having an effect, positive or negative, on domestic oil prices.

Re:Having solved all other problems

[Albanach]

they go after far cheaper eBooks while they're still young.

Do you have an example of a major textbook that's "far cheaper" in ebook format?

Usually I see at most a 10-20% difference. For that you get a book you cannot write in, and which has no resale value. Many paper textbooks can be resold for 40-50% of their purchase price.