Justice Department Calls Apple the "Ringmaster" In e-book Price Fixing Case

An anonymous reader writes "Back in April 2012, the U.S. Justice Department filed an antitrust lawsuit against Apple and a number of publishers for allegedly colluding to raise the price of e-books on the iBookstore. As part of its investigation into Apple's actions, the Justice Department collected evidence which it claims demonstrates that Apple was the 'ringmaster' in a price fixing conspiracy. Specifically, the Justice Department claims that Apple wielded its power in the mobile app market to coerce publishers to agree to Apple's terms for iBookstore pricing."

Comments

Interesting

[war4peace]

Such activities involve a pretty large number of people. It's interesting how they collectively can keep it a secret for a pretty long time.

Re:Interesting

[goombah99]

Such activities involve a pretty large number of people. It's interesting how they collectively can keep it a secret for a pretty long time.

It's even amazing that the "fixed" prices are not essentially different than Amazon or Alibris or BN. Very clever price fixing indeed.

Re: Interesting

[plover]

The difference? Amazon didn't get caught. Yet.

Re:Interesting

[neuralstatic]

it's my recollection that this was just offering an alternative to what amazon was already doing. if there is more than one outlet, then one outlet can't fix prices. am i foggy about amazon already being there?

Re:Interesting

[cc_pirate]

Such activities involve a pretty large number of people. It's interesting how they collectively can keep it a secret for a pretty long time.

It's even amazing that the "fixed" prices are not essentially different than Amazon or Alibris or BN. Very clever price fixing indeed.

BS they weren't 'different'. They were SIGNIFICANTLY higher. At least $3 to $5 higher under the 'agency' model, which on a book that was $9.99 is a 30 to 50% price hike.

Are you some Apple fanboi or something?

Re:Interesting

[bws111]

Amazon was operating under a normal wholesale/retail model. They bought from the publisher for some agreed-on price, and sold the books to the public for a price they set (which could be higher or lower than what they paid the publisher). Apple convinced the publishers to stop selling to Amazon and switch to an agency model. Under the agency model, the publisher set the price the public paid, and gave the retailers a cut of that. Apple also managed to write into the contracts that nobody could get less of a cut than Apple. That is price fixing.

Re: Interesting

[Anonymous Coward]

Have you read Quetelet?
http://ia600306.us.archive.org/19/items/treatiseonmandev00quet/treatiseonmandev00quet.pdf

Re:Interesting

[goombah99]

Amazon was operating under a normal wholesale/retail model. They bought from the publisher for some agreed-on price, and sold the books to the public for a price they set (which could be higher or lower than what they paid the publisher). Apple convinced the publishers to stop selling to Amazon and switch to an agency model. Under the agency model, the publisher set the price the public paid, and gave the retailers a cut of that. Apple also managed to write into the contracts that nobody could get less of a cut than Apple. That is price fixing.

No that is not price fixing. Walmart and Amazon and everyone else with clout signs contracts that say they must always be given the lowest price. And nearly all goods makers have contracts with sellers that fix the lowest price a good can be advertised at. (that's why you see those signs on web pages that say "add to cart to see price"-- cause they can't advertise it.

Re:Interesting

[goombah99]

Such activities involve a pretty large number of people. It's interesting how they collectively can keep it a secret for a pretty long time.

It's even amazing that the "fixed" prices are not essentially different than Amazon or Alibris or BN. Very clever price fixing indeed.

BS they weren't 'different'. They were SIGNIFICANTLY higher. At least $3 to $5 higher under the 'agency' model, which on a book that was $9.99 is a 30 to 50% price hike.

Are you some Apple fanboi or something?

Your pulling monkeys out of your butt. Here's an actual price comparison:

http://paidcontent.org/2012/09/11/apple-is-already-fighting-amazon-in-the-ebook-price-wars/

http://www.huffingtonpost.com/2012/10/17/cheapest-ebooks-amazon-ibooks-google-barnes-noble_n_1952736.html

Yes sometimes Amazon is cheaper. But mostly not. Sometimes apple is cheaper.

Re:Interesting

[bws111]

Yes, Amazon and Walmart, etc have contracts that say THEY will be given the lowest cost. However, Amazon, Walmart, and everyone else can set whatever price their customer pays. Prices are not 'fixed' in that scenario. One retailer may use their lower cost to lower the price for their customers, someone else may use their lower cost to increase their profits. Even someone who was not given a lower cost can sell to the public for a lower price than Amazon or Walmart if they want. In the agency model, the PUBLISHER sets the price the final customer, not the retailer, pays. And the deal with Apple (nobody gets less of a cut than us) means that even if Amazon were to say 'Apple is getting a 30% cut, we'll take 20%, cut our customers price accordingly', they publishers can't do it. The price has been fixed.

Re:Interesting

[__aaltlg1547]

Such activities involve a pretty large number of people. It's interesting how they collectively can keep it a secret for a pretty long time.

It wasn't a secret so much as thinking the government wouldn't come after them for it. Everybody knew about it.

Re:Interesting

[__aaltlg1547]

Amazon was operating under a normal wholesale/retail model. They bought from the publisher for some agreed-on price, and sold the books to the public for a price they set (which could be higher or lower than what they paid the publisher). Apple convinced the publishers to stop selling to Amazon and switch to an agency model. Under the agency model, the publisher set the price the public paid, and gave the retailers a cut of that. Apple also managed to write into the contracts that nobody could get less of a cut than Apple. That is price fixing.

Good thing Apple has $100 billion on the bank. They might need it.

Re: Interesting

[I'm New Around Here]

Ever notice how negros (snip rest of stupid post)

Is it possible that stupid shit like this can be modded down to -2 level?

Re:Interesting

[hairyfeet]

Because it really only takes a couple of people at the top level, everybody else will just follow orders. See the price fixing on DRAM and LCDs to see how you had price fixing covering companies halfway across the world from each other but it really only took a handful of high level board members to get it set up.

This is why I've been saying that while its great we're not seeing "site requires IE" anymore we have to be vigilant so we don't replace one master with another. Just look at how Apple is trying to ram through DRM into HTML V5 after killing an open codec minimum for HTML V5 for patent trolls MPEG-LA (which of course doesn't hurt them as they can pay the license fees) and how everybody tripped over themselves to kiss the ring of St Steve and cheering the death of Flash...when in reality it was simply Apple making sure nothing ran on Apple hardware that they didn't get a cut.

So we really have to watch it, because unlike MSFT whose efforts are hamfisted and so obvious Stevie Wonder could spot them the marketing team at Apple is fucking brilliant and can sell AC units to Eskimos and as we saw with IE once you let a company get too powerful it takes ages to undo the damage.

Re:Interesting

[Anonymous Coward]

Yeah, this is called re-sale price maintenance, and it is illegal in Australia and I assume the USA. The wholesaler can make any arrangements they like and get any price they like from the retailer, but they cannot tell the retailer how much to sell that particular item for - that's why its called a Recommended Retail Price and not a Mandatory Retail Price. The fact that different items have different prices misses the point.

Re:Interesting

[Anonymous Coward]

See http://en.wikipedia.org/wiki/Resale_price_maintenance

Re:Interesting

[Anonymous Coward]

It's not a secret when it's done correctly. its just 'the way things are' or 'industry standard'.

It's only when you start treating it like a secret that people run their mouth about it.

Re:Interesting

[chrismcb]

It's even amazing that the "fixed" prices are not essentially different than Amazon or Alibris or BN. Very clever price fixing indeed.

The "fixed" prices were drastically different than the prizes Amazon WAS offering. After the prices were fixed... well they were fixed.

Re:Interesting

[mjwx]

Such activities involve a pretty large number of people. It's interesting how they collectively can keep it a secret for a pretty long time.

Actually, such conspiracies involve a surprisingly small number of people. 1 from each company and maybe their aide.

A large number of people may be involved in the activity, but not the conspiracy so they wont know what is going on, sometimes even the companies CEO doesn't know whats going on.

But this is for traditional price fixing, Apple's been quite open about setting a minimum price for e-books for some time. You may remember a few years back they threatened publishers with banishment if they sold their e-books on other providers for less than what Apple allowed them to sell them for through Apple's distribution channel.

Re:Interesting

[MachineShedFred]

when in reality it was simply Apple making sure nothing ran on Apple hardware that they didn't get a cut.

Yeah, it totally sucks that I can't run Flash and Silverlight on my Mac. Oh wait, I can install both with zero restrictions outside of Adobe and Microsoft's license agreements. Apple sells more than the iOS devices.

Regardless, Flash is still a huge piece of shit, and everyone should be happy with it's demise. It's a zero-sum change moving from DRM in Flash / Silverlight to DRM in HTML5, except that it's no longer a framework owned by one company who can decide if they are going to develop for all platforms or not. Remember how long it took to get useable Flash on Linux? Won't have that problem with HTML5, since it's a specification and not a product.

Re:Interesting

[Anonymous Coward]

Thank you. This is what needed to be in the summary. Agreeing that your suppliers give you the lowest price is perfectly fine. Agreeing that no one else is allowed to make less money than you is illegal, IMO.

Re:Interesting

[Anonymous Coward]

"And the deal with Apple (nobody gets less of a cut than us) means that even if Amazon were to say 'Apple is getting a 30% cut, we'll take 20%, cut our customers price accordingly', they publishers can't do it. The price has been fixed."

Is absolutely NOT the way it is written. There is absolutely no requirement that Apple gets a larger cut of the pie than any other retailer. There is absolutely no requirement that no retailer other than Apple must charge 30% more than what the publisher sell it to them. The contracts don't require am minimum markup -- ever.

The requirement is that Apple can sell the book for as low a price as any other retailer. If the other retailer is allowed by the publisher to give the book away for free then the publisher must allow Apple to give the book away for free. Apple is guaranteed 30% of nothing. Where's Apple's profit in that?

As mentioned elsewhere in this thread, if a retailer wants to pay a publishers "wholesale" price of $10 for a book then turn around and sell it for $1 they can do that. The only requirement in Apple's deals with the publishers is that Apple be allowed to sell the book for $1 too. Thus Apple gets $0.30 and the publisher gets $0.70.

Conversely, if the retailer is selling a current, hot, best seller whose wholesale price is $10 the retailer might be able to get $20 for it. Apple would be allowed under the deals with the publishers to sell the book at $20 or less. So if Apple wanted to sell the book for $15 it could with Apple getting $4.50 and the publisher getting $10.50. Apple makes much less profit in this case than the other retailer does. (Even if Apple were to sell it for $20, Apple would get $6 while the other retailer got $10.)

Re:Interesting

[hairyfeet]

Straw man, nobody gives a rat's ass about the Mac as its not even 10% of the market, sorry. But you knew that didn't you? Nobody kisses the ring for the Mac, which is getting slower and slower refreshes and mark my words within 7 years will be replaced with ARM, nope the reason they kiss the ring is iMoney, specifically iPad and iPod.

And you can make excuses for their behavior all you want but the simple fact is Flash is open, if they didn't think Adobe was doing a good enough job they could have backed Gnash or made their own fork, but that isn't what they did, was it? Nope they backed a known patent troll who will attack their biggest rival which is Android by making it damned clear there will be NO downstream licenses involving H.26x thus insuring that only proprietary OSes can have H.26x unless they set themselves up in non Berne countries which in that case it will be trivial to get those devices banned from the west for patent and copyright infringement.

I'm sorry but you'd have to have stains all down the front of your shirt from gulping the iKoolaid to not see that Cupertino is attempting to pull off what Redmond never could, and that is locking the web down into formats that they control. MSFT tried this with IE but again hamfisted and obvious whereas posts like yours prove how good the marketing team at Cupertino is, they can sell you a walled garden and you will thank them for the barrier.

Re:Interesting

[bws111]

Every point in your post is wrong.

Under the Apple deal, there is NO WHOLESALE. The publisher sets the price the customer pays, and gives the retailer a percentage of that. Therefore, a retailer CAN NOT undersell Apple. Even if a retailer was willing to take a loss on the book, that just means the publisher gets more money, because the price to the consumer stays the same.

The agency model (which Apple got the publsihers to switch to) is like a real estate agent. The homeowner (publisher) sets the price of the house (book). The realtor (retailer) MUST sell it for the price that the homeowner wants. The realtor (retailer) can not sell it for less (without permission of the owner/publisher) and can certainly not sell it for more and pocket the difference. And the deal with Apple means that permission to sell for less will not be forthcoming.

Re:Interesting

[Anonymous Coward]

You're truly kidding, right?

Flash is open? Since when? Adobe controls the Flash format and 99% of people think that you can get Flash players and development tools ONLY from Adobe. (Virtually all /. posters fall into the remaining 1%.)

Compare that with the HTML 5 standard that Apple DOES NOT control. Compare that with the H.264 standard that Apple DOES NOT control. Compare that with the H.265 standard that Apple DOES NOT control. And... You seem to be saying that if I write an app for an Apple device that uses an H.264 decoder Apple is going to forbid me from utilizing it or selling it? Absolutely not so.

Or you could look at OpenCL something Apple did develop and then released as an open standard. Sure Apple has significant input into that standard, but Apple no longer controls it. Compare that with Flash -- something that Adobe still does maintain tight control over.

And Apple does not support downstream licenses? Since when? Apple is currently attempting to intercede in several patent lawsuits on behalf of the developers. Apple paid for a transferable license for certain capabilities and put those capabilities into their development environments. The patent holder is angry that the individual developers who created software with those tools didn't pay an additional fee to use it. So the patent holder is suing several developers hoping to extract a lot more money. Apple is telling the courts that the transferable license fee has already been paid. The patent holder is NOT going after Apple (who the patent holder admits has paid all appropriate fees). The patent holder is going after the little guys hoping to scare them into paying more. So Apple buying transferable licenses and then actively and legally supporting the downstream use of that technology is now supposedly Apple not supporting downstream licenses?

Finally, anyone -- literally anyone -- who thinks that Apple even 1% of the ability to *force* the internet to use formats that *only* Apples control is not well connected to reality. Not even Google has that power. Maybe in 5 years if the market share of Android platforms continues to grow. Maybe then Android will have 80+% market share and Google can force formats and standards, but not today.

Re:Interesting

[TheBestMerlinEver]

Apple has done a good job of making themselves out as saints...when they are just evil. Evil with a great GUI.

Apple need to do no evil

[tuppe666]

...and customers get bent over; thank Apple

And the rest of us have to pay a premium for its Monopolistic abuse. Call me a hater.

What is missing from the article is this is saint Jobs corrupt to the core.

"Jobs explained to his biographer that he told the publishers, "We’ll go to the agency model, where you set the price, and we get our 30 percent, and yes, the customer pays a little more, but that’s what you want anyway.” http://thehill.com/blogs/hillicon-valley/technology/299875-doj-accuses-steve-jobs-of-being-ringmaster-in-price-fixing-scheme.

Thankfully Microsoft is slowly catching up so we will be back with that evil duopoly again.

Re:Apple need to do no evil

[Nerdfest]

Using a 'favoured nation' policy to force suppliers to charge Apple's cut to non-Apple customers or eat the cost is an abuse of their market position (more-so at the time than now) and should be very illegal.

Re:Apple need to do no evil

[node 3]

Aside from being Apple, which you hate irrationally, what exactly is your complaint? What do you think Apple did that was wrong? They used an existing model, which is legal. They broke a monopoly, which is not only legal, but generally considered beneficial. They brought eBooks to more people.

And in the end, Amazon is still the top eBook seller, so Apple didn't even take a controlling share of the market. So what did they do wrong?

Re:Apple need to do no evil

[Anonymous Coward]

A monopoly? Do you know what this word means?

Re:Apple need to do no evil

[__aaltlg1547]

Proposed penalty: 1. Refund customers 30% for every bit of electronic media they sold since they started this corrupt practice. 2. 2-year ban on Apple selling electronic media -- e-books, music and video.

Re:Apple need to do no evil

[Anonymous Coward]

You need to be more of a shill. It's only super obvious, not quite the hyper obvious you're apparently going for.

Re:Apple need to do no evil

[Nerdfest]

They raised prices for me when buying books from sellers that want access to Apples market.

Re:Apple need to do no evil

[Colonel Korn]

Aside from being Apple, which you hate irrationally, what exactly is your complaint? What do you think Apple did that was wrong? They used an existing model, which is legal. They broke a monopoly, which is not only legal, but generally considered beneficial. They brought eBooks to more people.

And in the end, Amazon is still the top eBook seller, so Apple didn't even take a controlling share of the market. So what did they do wrong?

The "generally considered beneficial" monopoly breaking makes Ayn Rand feel good but at the same time it instantly raised the price of every ebook by 50%. That's very bad for consumers. Amazon is still winning, yes, but why should we on /. care about market share? Generally, when it comes to books we're consumers, and every consumer was fucked over by Apple.

Re:Apple need to do no evil

[dr.g]

I sincerely hope he's getting paid.

Though his corporate overlords probably give him most of the talking points, the deviousness, straw men, subject-shifting, red herrings and misrepresentation of terms show that this shill has thrown himself into the project. He deserves his pieces of silver.

Re:Apple need to do no evil

[ZombieBraintrust]

They broke a monopoly, which is not only legal, but generally considered beneficial.

They did not break a monopoly. Amazon was already loosing share to B&N prior to the Agency model.

They used an existing model, which is legal.

Just because something is existing doesn't make it legal. ITunes is probably also illegal. That is why Apple is fighting this.

So what did they do wrong?

They raised prices. Anti Trust laws are about keeping prices low.

Re:Apple need to do no evil

[Anonymous Coward]

1. Refund customers 30% for every bit of electronic media they sold since they started this corrupt practice.

Apple consumers were not the victims (give it to the competition and there customers). Also 30% is only Apples cut, the publishers also need to pay-up.

Re:Apple need to do no evil

[rochrist]

It's also bullshit. You keep claiming this 50% markup figure without any cite to back it up.

Re:Apple need to do no evil

[rochrist]

Wow. Three statement. Three errors. 3 for 3. Good job, Tim and Eric!

Re:Apple need to do no evil

[steelfood]

Proposed penalty: Full access to Apple's internal iOS APIs. App store unlock. Apple cannot develop software that other companies cannot develop.

That's how Microsoft has to operate with their monopoly in the OS market. The guys working on Office cannot use an API call that the guys working on Windows has not disclosed.

Re:Apple need to do no evil

[__aaltlg1547]

You mean they were not the ONLY victims. But Apple needs to make restitution to its customers and other perps need to make restitution to theirs.

Laissie Faire??

[Holistic Missile]

Not defending Apple's pricing, in fact I think that they are in many ways douchebags, but why is this an antitrust situation? They are negotiating with vendors to reach the price point they desire. They are just reaching for a higher price point, instead of a lower one. They can't set their prices to what their customers will bear? I'm not about to click all of the links in the article, which isn't much of an article, but unless they were colluding with these publishers to charge higher prices everywhere, I don't see a problem. If Apple's customers are such zealots that they won't consider other sources for their media, let them pay the prices.

Re:Laissie Faire??

[kris2112]

The DoJ's case alleges that the agency pricing model had a clause where the publisher wouldn't sell their books in other stores for less than they were charging in the iBookstore. If true, this is Collusion, and falls under anti-trust laws. http://definitions.uslegal.com/c/collusion/

Re:Laissie Faire??

[Anonymous Coward]

If I recall correctly (it's been a while, so please forgive me), part of the agreement made with Apple involved ensuring that the iBook price for books X, Y and Z was the universal baseline price for those titles. For instance, if such-and-such a title was available through Apple for $12.99, it couldn't be made available through Amazon or B&N for $9.99.

Re:Laissie Faire??

[oldhack]

This is even messier because it deals with books, mostly copyrighted works. Copyright is a state-granted artificial monopoly - mix in anti-collusion statues and you get one fine convoluted mess.

Re:Laissie Faire??

[Anonymous Coward]

unless they were colluding with these publishers to charge higher prices everywhere, I don't see a problem.

that's exactly what they were doing.

Re:Laissie Faire??

[asmkm22]

From what I understand, apple and publishers basically all wanted to set ebook prices for the range of 12.99 to 14.99. Apple threatened to (and did) block apps for publishers that didn't agree or didn't jump on board right away, as leverage. It's kind of a big deal because Apple was hoping to negotiate things in a way to prevent wholesale outlets, like Amazon, from having a choice in setting ebook pricing by having having deals with all the publishers that released all the ebooks through Apple first (at full book price). This is in contrast to Amazon, who wanted to market ebooks as less-expensive alternatives to physical books, probably to reflect the fact that you aren't buying a physical product. Since Amazon isn't exactly a small fish in that pond, some publishers were very concerned about pissing Amazon off, although they all did eventually say yeah we'll follow apples lead, partly due to Apple blocking their apps otherwise.

I think publishers ultimately wanted to move into a position where they can sell ebooks at the normal physical book price (complete with DRM and everything), but didn't want to kill relations with Amazon in the process. For the publishers side, one of the main issues they had was that Apple was demanding the normal 30% off the top for every ebook sale, which was in many cases worse than letting Amazon give its discounts. But again, since Apple was threatening with the whole app blocking thing, the went with it.

It's worth noting that all of the publishers have settled with DoJ without a fight.

Re:Laissie Faire??

[aaarrrgggh]

It is all in how you say it; if you say that if the publisher offers a better price to another outlet, they must match that price for Apple, then it is ok. The tricky part is that if Apple's clause says that Apple can match any other retailer's price and give the publisher 30%, but that would seem like it still isn't collusion; it creates a situation where selling to Amazon at wholesale is better than selling to Apple at an Agency model. Hence the publisher's collusion amongst themselves to force Amazon to the agency model.

What I understand of the agreement seems pretty clean from Apple's perspective, but not as much for the publishers.

Re:Laissie Faire??

[goombah99]

The DoJ's case alleges that the agency pricing model had a clause where the publisher wouldn't sell their books in other stores for less than they were charging in the iBookstore. If true, this is Collusion, and falls under anti-trust laws. http://definitions.uslegal.com/c/collusion/

No it's not. Almost every major retailer insists on the lowest price. Walmart does, Amazon does.

Re:Laissie Faire??

[R3d M3rcury]

The issue is how much collusion was there between Apple and the publishing companies to set these prices--which, according to the e-mails, was quite a bit. Apple was working to craft an agreement that all the publishers would agree to, not individual agreements with the publishers. That's collusion.

Re:Laissie Faire??

[BasilBrush]

It's worth noting that all of the publishers have settled with DoJ without a fight.

It's worth noting that Apple hasn't. You do realise the publishers may have colluded without Apple's involvement.

Re:Laissie Faire??

[KingMotley]

Hmmm... You know that's exactly what is in all government contracts too, right? You can't charge anyone less than what you charge the government for the same thing. Sounds kind of similar.

Re:Laissie Faire??

[node 3]

The DoJ's case alleges that the agency pricing model had a clause where the publisher wouldn't sell their books in other stores for less than they were charging in the iBookstore. If true, this is Collusion, and falls under anti-trust laws. http://definitions.uslegal.com/c/collusion/

The definition isn't that long. Here it is:

Collusion occurs when two persons or representatives of an entity or organization make an agreement to deceive or mislead another. Such agreements are usually secretive, and involve fraud or gaining an unfair advantage over a third party, competitors, consumers or others with whom they are negotiating. The collusion, therefore, makes the bargaining process inherently unfair. Collusion can involve price or wage fixing, kickbacks, or misrepresenting the independence of the relationship betweeen the colluding parties.

For example, in a divorce action, the husband and wife may agree to fabricate a story or suppress evidence to provide evidence of lawful grounds for a divorce. As another example, collusion may involve cooperation between competing sellers, in the form of an agreement, express or tacit, limiting competition, or a merger or other means to raise the market price above the competitive level.

Where's the collusion? The first sentence: Collusion occurs when two persons or representatives of an entity or organization make an agreement to deceive or mislead another.

Who is being mislead? Other than anti-Apple fanboys who think Apple did something wrong here.

Re:Laissie Faire??

[Anonymous Coward]

Those clauses are on the price the supplier sells to the retailer.

This agreement forced the lowest final price for the customer to be in the istore - which is to say that even if Amazon wanted to be cheaper than apple by taking a loss, they wouldn't be allowed. You are thus using collusion to fix not just your price but other people's. It's certainly an anti-trust violation and everyone involved deserves the fullest punishment possible.

Re:Laissie Faire??

[kris2112]

I think if Apple had not required publishers to sell in other stores at or above the iBookstore prices, this wouldn't be an issue that the DoJ would pursue.

Other than anti-Apple fanboys

Ah, the fanboy chestnut.

I make my living writing iOS and Mac OS software. I'm commenting from a Mac Pro with an embarrassing number of iPhones, iPads and iPod touches connected to it. If anything, I can be accused of being an Apple fanboy.

Re:Laissie Faire??

[bws111]

Putting pressure on your suppliers is not predatory or illegal. Every successful business pressures it's suppliers. Sometimes the pressure is cost, sometimes delivery, sometimes quality, etc. You may as well complain that the consumers are the real predators here, because they are the ones who want the low prices from Amazon, Walmart, etc.

Re:Laissie Faire??

[kris2112]

I think if Apple had not required publishers to sell in other stores at or above the iBookstore prices, this wouldn't be an issue that the DoJ would pursue.

That's not illegal. And this whole thing is absurd because it levels the playing field. Amazon can no longer force publishers into shitty deals, which is what was happening before Apple entered the picture.

Amazon would tell publishers "you will sell to us at this (absurdly low) price, or we won't carry your print book". They are the real predator here.

Starting to look like we're in violent agreement here.

I find it silly that the DoJ has brought this case. But they have, and I'm trying to understand their justification for doing so. The collusion angle is the only one I can come up with that holds any water.

In the ebook market, Amazon is far more dangerous than Apple and the publishers. Accusations have been made that Amazon pays publishers up to $15 for each of those $9.99 Kindle sales. If so, that's dumping to drive competitors out of business, and falls under anti-trust law. It's also why, when buying ebooks, I buy directly from the publisher first, from iBookstore second, and Amazon last. Even if buying from the first two means I pay a bit more.

Other than anti-Apple fanboys

Ah, the fanboy chestnut.

It's only a "chestnut" because people use it to mean "someone who likes something I don't like", which, quite ironically, is almost universally more fanboyish than the person being called a fanboy.

I personally think "fanboy" is a good term (to be a fan of something), but the OSS/Linux/Android crowd perverted it to mean the above.

I make my living writing iOS and Mac OS software. I'm commenting from a Mac Pro with an embarrassing number of iPhones, iPads and iPod touches connected to it. If anything, I can be accused of being an Apple fanboy.

My apologies, I jumped the gun.

No problem. I've just grown tired of fanboy accusations and how that ruins otherwise intelligent discussions.

Re:Laissie Faire??

[Colonel Korn]

I'm not about to click all of the links in the article, which isn't much of an article, but unless they were colluding with these publishers to charge higher prices everywhere, I don't see a problem. If Apple's customers are such zealots that they won't consider other sources for their media, let them pay the prices.

Uh...click the links. Or read any news story about this in the last several years. The point of the story is that Apple was "colluding with these publishers to charge higher prices everywhere." That's exactly what they did. We knew it at the time, even, because Amazon publicized it. Then ebooks from every single source went up in price by 50%. But somehow Apple fans think this is a great win for the consumer because breaking a monopoly (Amazon) is always good for consumers...right?

Re:Laissie Faire??

[dr.g]

Yes, Amazon is "the real predator" here. Not the folks who charge the same for providing electronic bits as they do for purchasing, printing, inventorying, and distributing the physical product.

That statement clearly shows who you are representing in this argument. The publishers are overcharging for electronic versions of their IP. They jumped at the chance offered by Apple, to justify this rape of the consumer. While you would be correct to point out that Amazon does nothing from altruistic motive, that's irrelevant. In this case, they felt they would profit from a situation where there was unfettered (or less fettered) competition, possibly even *gasp* between publishers themselves!. Apple, also not acting altruistically, just jumped on the opposing position, which the publishers (rightly) saw as the best opportunity for the continuation of these windfall profits.

"But wait!" (you will say) "You can't expect the publishers to act against their own interests, can you?" Well, no. But if eBooks went away entirely, or at least proved to be an insignificant part of the publishing industry, I think they'd be pretty happy about it. Their own actions speak to this, as they would rather discourage the purchase of eBooks (by insisting on profit in the mega-multiples compared to production cost) than compete against their own based-on-paper business model.

The disruptive technology of eBooks is causing these various actors to behave in non-intuitive ways, which gives YOU the opportunity to put forth FUD, confusing arguments, and false dilemas on behalf of (apparently) the publishers.

The publishers will learn. Eventually, many millions of lobbying $$ down the road, there will be legislation protecting the practice of charging $10.00 for something that costs them $1.50 to provide, since it costs them $x+$1.50 to produce the paper version. But until then, if it walks like collusion, and quacks like collusion and results in higher prices than necessary or justifiable to consumers, some parts of the government will actually perform their jobs and try to prevent it.

Re:Laissie Faire??

[node 3]

If they are over-charging, people won't buy them and they will have to lower their prices. Paper books still exist.

I don't think you understand how supply and demand works. There's no "set price" for a book unit. The price in the market is reflective of demand, not of the physical cost of the books.

It's funny that you think I'm on someone's "side". I'm just describing how things are.

Re:Laissie Faire??

[node 3]

Putting pressure on your suppliers is not predatory or illegal.

It's not illegal, but it can be predatory.

Every successful business pressures it's suppliers. Sometimes the pressure is cost, sometimes delivery, sometimes quality, etc. You may as well complain that the consumers are the real predators here, because they are the ones who want the low prices from Amazon, Walmart, etc.

I'd call both Amazon and Walmart predators. Not simply for exerting pressure, but for the overbearing and inequal manner in which they do it. But I'm fine with us not agreeing on that. The main thing we need to see eye to eye on this is simply that I'm not saying Amazon is doing anything illegal simply for negotiating from a strong position (nor Walmart, for that matter).

I do think there is at least a bit of anti-trust concern with their "if you don't deal with us on eBooks, we won't carry your paper books" tactics, but I'm basically ambivalent, and would err on the side of not pulling out the anti-trust guns if pushed to make a choice.

Re:Laissie Faire??

[node 3]

I find it silly that the DoJ has brought this case. But they have, and I'm trying to understand their justification for doing so. The collusion angle is the only one I can come up with that holds any water.

My personal opinion is that this case is either misguided good intentions, or possibly just someone's ambitions playing out. I'd apply a variation on Hanlon's razor, and not attribute it to malicious ambition without some evidence.

No problem. I've just grown tired of fanboy accusations and how that ruins otherwise intelligent discussions.

I am as well, which is why I've taken up using it against those that tend to throw it out, which I mistook you for. There's a strong streak of crazy here on Slashdot, and maybe I'm foolish to try, but I'd like to think exposing their hypocrisy might do some good.

Yeah, I know, you can't reason with religious ferver...

Re:Laissie Faire??

[chrismcb]

Not defending Apple's pricing, in fact I think that they are in many ways douchebags, but why is this an antitrust situation? They are negotiating with vendors to reach the price point they desire. They are just reaching for a higher price point, instead of a lower one. .... If Apple's customers are such zealots that they won't consider other sources for their media, let them pay the prices.

Well whether you are a zealot or not, you don't have a choice BUT to pay Apple's prices. Even if you want to buy from Amazon. This wasn't about Apple setting a higher price point for Apple, this is about Apple forcing the publishers to set a higher price point for EVERYONE.

Re:Laissie Faire??

[Xest]

"What I understand of the agreement seems pretty clean from Apple's perspective, but not as much for the publishers."

Which is of course why they've been accused of being the ringmasters, because it's clean from Apple's perspective.

Still, it's not as if the people who called Apple the ringmasters in this case are legal professionals or anything is it. At least we have a random Joe on Slashdot to clarify the situation who obviously knows the law better.

Meant to type Laissez Faire - D'oh!

[Holistic Missile]

It's acceptable to grammar nazi myself, isn't it? :-)

Re:Meant to type Laissez Faire - D'oh!

[Black Parrot]

It's acceptable to grammar nazi myself, isn't it? :-)

lazy fare.

Re:Meant to type Laissez Faire - D'oh!

[dr.g]

As long as you stop short of autogenocide.

But Amazon is of course a saint

[SuperKendall]

I find it amusing the Apple is accused of being a "ringmaster" when it's Amazon that is in total dominance of the electronic book market and pricing. That was just as true back in the period when Apple was supposedly manipulating publishers...

Amazon was trying to break up the eBook market the same way they broke up the DRM eMusic industry. Sadly Apple did not succeed in the eBook case, so I hope you all really like the Kindle format!

Re:But Amazon is of course a saint

[lucm]

I find it amusing the Apple is accused of being a "ringmaster" when it's Amazon that is in total dominance of the electronic book market and pricing.

This story is about collusion with publishers, not about market share. Read the article, there is a part where they discuss Amazon.

Re:But Amazon is of course a saint

[Anonymous Coward]

p>Is collusion bad when it breaks a nascent monopoly?

Do the ends justify the means?

Re:But Amazon is of course a saint

[bws111]

What is wrong with being a monopoly? Simply being a monopoly is not a problem, and is not illegal. What IS illegal is when the power of that monopoly is used to gain an unfair (anticompetitive) advantage in a DIFFERENT area.

Re:But Amazon is of course a saint

[SuperKendall]

Do the ends justify the means?

If the ends and the means involve more freedom and consumer choice, then yes.

Re:But Amazon is of course a saint

[ZombieBraintrust]

Amazon "dominance" was totally a result of them converting their existing physical book customers into digital customers. They were doing this years before Apple even put out the IPad. B&N, and Kobo were also late. They were out there with only Sony as a competitor. So they had 90% share when it was them vrs Sony. Sony didn't have a huge website with millions of book sales. So of course Sony was clobbered. When Amazon main physical book rival B&N came out with the Nook their share went down. Then the Apple launched IBooks and prices went up on best sellers. Then their was the lawsuit. Then prices went down.

Re:But Amazon is of course a saint

[bloodhawk]

There is nothing illegal about being a monopoly. You don't get to justify corrupt behavior just because it damages an even bigger shark.

Re:But Amazon is of course a saint

[Omestes]

If the ends and the means involve more freedom and consumer choice, then yes.

The freedom to pay more? More choices at the exact same inflated price?

Re:But Amazon is of course a saint

[Xest]

More and consumer choice is a useful tennet of capitalism when it means prices are pushed down by competition.

But as in this case because of Apple and co's practices the prices have gone up then the tennet of increased consumer choice is irrelevant.

It's also dishonest to say it gave customers more freedom. It may have given them more choices to purchase from, but it gave them less freedom in terms of what price to pay.

Re:But Amazon is of course a saint

[Anonymous Coward]

When Amazon was the only big player, ebook prices were cheap. That changed when Apple entered the market, I'm sure they had to REALLY twist publisher's arms to get them to set higher costs but the net result was that Apple didn't have to compete with Amazon on pricing when it got into the market and consumers got screwed. Ebook prices went from $5-6 for a 'big name' publisher/series to $12-15 and I've seen as much as $25. Prices have been a bit more reasonable since the lawsuit but not much and they still aren't back to where they were before Apple entered the game.

Complain about Amazon all you want, but they weren't the ones who screwed up ebook prices.

Except its not true

[tuppe666]

Such activities involve a pretty large number of people. It's interesting how they collectively can keep it a secret for a pretty long time.

It is was published in his biography. This has been going on for forever.

Provide the proof

[tuppe666]

Did you read the article. "Under the old model, Amazon controlled about 90 percent of the market, but after the publishers instituted the new pricing scheme, Amazon's share fell to 60 percent." http://thehill.com/blogs/hillicon-valley/technology/299875-doj-accuses-steve-jobs-of-being-ringmaster-in-price-fixing-scheme

Amazon didn't get caught because its done nothing wrong. (well its done lots of things, just not in this instance)

Re:Provide the proof

[BasilBrush]

Sounds like Amazon's monopoly was broken. What's the problem with that again?

Re:Provide the proof

[Colonel Korn]

Sounds like Amazon's monopoly was broken. What's the problem with that again?

One problem is that prices went up 50% literally overnight when Apple got all the publishers to agree to force Amazon and other sellers to charge more.

Re:Provide the proof

[chrismcb]

Sounds like Amazon's monopoly was broken. What's the problem with that again?

Monopolies aren't necessarily a bad thing. Instead of Amazon having a "monopoly" and charge decent prices. Apple and the Big 5 formed their own "monopoly" and charged higher prices... So in this case, for the consumer, it was a very bad thing

Re:Provide the proof

[Anonymous Coward]

Amazon was actually on the consumers side in this battle, and since Apple pulled this tactic with the publishers ebook prices have gone up across the board on all sites.

If Apple had not done what it did, then ebooks would be 50+% cheaper on Amazon than they are currently. Next time you buy an ebook priced over $10, you can thank Apple for the pleasure of paying more.

Re:Provide the proof

[BasilBrush]

One problem is that prices went up 50% literally overnight when Apple got all the publishers to agree to force Amazon and other sellers to charge more.

Two problems there. First where's the evidence that eBook prices went up at all, let alone 50%. People have found individual cases of books that went up, and books that went down. 50% is far too round a number to represent anything other than somebody making up statistics on the spot.

For their part, Apple claims average ebook price went down from $7.97 to $7.34. Can you prove them wrong?

Secondly, you repeat the Justice Department's assertion that Apple orchestrated price fixing. It's an allegation not a fact. You don't knwo any better than I whether it's true or not.

Re:Provide the proof

[Anonymous Coward]

Look at the fanboi spin! Who's a good fanboi? You're a good fanboi! Fanboi want a treat?

Re:Provide the proof

[scot4875]

For their part, Apple claims average ebook price went down from $7.97 to $7.34. Can you prove them wrong?

The Justice department claims that Apple is the ringmaster in an ebook price fixing case. Can you prove them wrong?

For my part, I'll trust the justice department over Apple's self-serving claims about ebook pricing. You, obviously, will side with Apple because you can't possibly be objective about your sacred cow having done something unethical. You've got post after post calling you out for being a blind Apple worshipper, yet the only one you respond to (which also does a great job of showing how wrong you are) you dismiss because it makes a "think of the children!" argument.

Oh, and for the record, fuck Amazon too, but for reasons unrelated to this.

--Jeremy

Re:Provide the proof

[BasilBrush]

The Justice department claims that Apple is the ringmaster in an ebook price fixing case. Can you prove them wrong?
For my part, I'll trust the justice department

For my part, I won't pre-judge the court-case. But I will challenge some clearly bogus claims by people here such as ebook prices "went up 50% literally overnight",

And other bogus claims such as "yet the only one you respond to (which also does a great job of showing how wrong you are) you dismiss because it makes a "think of the children!" argument." There are very few posts that I don't respond to. The only real exception is ACs, I usually ignore them.

Except its not.

[tuppe666]

http://thehill.com/blogs/hillicon-valley/technology/299875-doj-accuses-steve-jobs-of-being-ringmaster-in-price-fixing-scheme "Under the old model, Amazon controlled about 90 percent of the market, but after the publishers instituted the new pricing scheme, Amazon's share fell to 60 percent."

Its not amusing at all. Amazon dominate by competing on old fashioned things like price, Not being corrupt. I find it sick that your defending a mega corporation (again), when the illegal corrupt actions affect everyone.

Re:Except its not.

[Graymalkin]

Man I fucking love using market share as metric! Since it is a unitless number it can be used to say anything you want. So under the old model, Amazon controlled 90% of the [market for eBooks]. After publishers instituted their new pricing scheme Amazons market share fell to 60% of [the market for eBooks]. That sounds absolutely terrible!

Unless of course you realize market share is a unitless number that doesnt tell us jack shit. Before publishers changed their prices we dont know what the size of the eBook market was so we dont know what Amazons unit sales or dollar sales were for that time period. After publishers changed their prices we still dont know what the size of the eBook market was so were still unable to tell what Amazons unit or dollar sales were.

Without knowing Amazons unit or dollars sales it is impossible to know if they were materially affected by the change in publisher prices. With Apple entering the eBook retailer arena and thus bringing an eBook store to many tens of millions of iPhones, iPods, and iPads they very likely increased the overall size of the eBook market. Google also entered the fray selling books and magazines in this period of time.

Google and Apple selling eBooks likely increased the total size of the eBook market which means unless Amazons sales grew in that same period at the same rate as the total market their share of that market could only decrease. This isnt rocket surgery. Market share simply cannot show that competitors ate Amazons market share or if their share decreased from market growth. As such market sahre cant possibly be used to show that publishers changing their pricing model positively or negatively affected Amazon. This isnt about defending megacorporations but about not using stupid numbers to make definitive arguments.

Re:Except its not.

[BasilBrush]

"Under the old model, Amazon controlled about 90 percent of the market, but after the publishers instituted the new pricing scheme, Amazon's share fell to 60 percent."

SO Amazon's near monopoly was broken. Good thing.

Its not amusing at all. Amazon dominate by competing on old fashioned things like price, Not being corrupt.

That's about as rational as saying the same thing about Microsoft and Walmart.

I find it sick that your defending a mega corporation (again)

Kind of how you're defending Amazon, the book monopolist.

Re:Except its not.

[node 3]

http://thehill.com/blogs/hillicon-valley/technology/299875-doj-accuses-steve-jobs-of-being-ringmaster-in-price-fixing-scheme "Under the old model, Amazon controlled about 90 percent of the market, but after the publishers instituted the new pricing scheme, Amazon's share fell to 60 percent."

Its not amusing at all. Amazon dominate by competing on old fashioned things like price, Not being corrupt. I find it sick that your defending a mega corporation (again), when the illegal corrupt actions affect everyone.

It's quite... fascinating, how you can defend a monopoly and demonize the company that broke the monopoly, doing the very thing you just defended the monopoly for doing in the first place!

Apple entered the book market and competed against Amazon doing the very thing you laud Amazon for doing: they competed on price!

That's some highly potent fanboy fanaticism in action!

Re:Except its not.

[rsmith-mac]

Its not amusing at all. Amazon dominate by competing on old fashioned things like price,

Competing on price is an understatement. Amazon was losing money on purpose; it's more fair to say Amazon was competing via predatory pricing . Lose money on books now until everyone else has been run out of business, then significantly raise the prices once they're the only game in town. The outcome of that would have been something that would have benefited no one but Amazon.

On a side note, the wholesale model doesn't make any sense for ebooks anyhow. It's based around the realities of inventory, which wouldn't apply to ebooks.

Re:Except its not.

[bws111]

It is dirt cheap to sell ebooks. There is almost no barrier to entry at all, especialy for an established retailer. Therefore, your scenario can't happen, because as soon as Amazon raises the price the competitors will re-appear. Yes, in some industries predatory pricing is a real problem. Ebooks is not one of those industries.

Re:Except its not.

[ZombieBraintrust]

90% is not really a valid number. Amazon had 90% market share because they had no competition. B&N and Borders didn't even have an ereader for a several years. Apple came in 5 years too late. Amazon never had a true monopoly. Of course Amazon lost share once others entered the market. And while they lost share they didn't lose customers. There were still growing like hell converting their customers from physical to digital.

Re:Except its not.

[ZombieBraintrust]

Amazon didn't lose share because of Apple. If they had Apple would have gained 40%. But instead B&N gained 20% and Apple, Sony, and Kobo split the rest. As the market grew other companies picked up customers. Nothing to do the price fixing Apple was involved in.

Re:Except its not.

[Colonel Korn]

http://thehill.com/blogs/hillicon-valley/technology/299875-doj-accuses-steve-jobs-of-being-ringmaster-in-price-fixing-scheme "Under the old model, Amazon controlled about 90 percent of the market, but after the publishers instituted the new pricing scheme, Amazon's share fell to 60 percent."

Its not amusing at all. Amazon dominate by competing on old fashioned things like price, Not being corrupt. I find it sick that your defending a mega corporation (again), when the illegal corrupt actions affect everyone.

It's quite... fascinating, how you can defend a monopoly and demonize the company that broke the monopoly, doing the very thing you just defended the monopoly for doing in the first place!

Apple entered the book market and competed against Amazon doing the very thing you laud Amazon for doing: they competed on price!

That's some highly potent fanboy fanaticism in action!

Apple did compete on price - they competed by demanding that every publisher raise the price of all ebooks by 50%. Publishers were happy to oblige. Amazon wasn't hurt - they still dominate the market. The only people who lost were consumers (like you!). People like you lost big time. Go cheer for the people who beat the shit out of you some more. It amuses them.

Re:Except its not.

[node 3]

Apple did compete on price - they competed by demanding that every publisher raise the price of all ebooks by 50%.

I'm 100% positive that that's absolutely not what happened. Funny sense of re-writing reality you have there. I've heard a term for that before, I'm sure you bandied it about before...

Publishers were happy to oblige.

They were timid, afraid to take on Amazon alone. What happened wasn't that Apple asked them to raise their prices across the board by some set amount, what they asked them to do was quit letting Amazon set their prices for them. *That's* what they were happy to do, they just never had the backbone before iBooks.

Amazon wasn't hurt - they still dominate the market.

90% to 60%, and no longer able to bully the publishers around to the same extent as before. I don't know how you can think that doesn't count as being "hurt". Perhaps if that three-letter term I referenced above would come to me, what is it?...

The only people who lost were consumers (like you!). People like you lost big time.

You mean how I now have more plentiful options for eBooks? Wow, I'm soooooo hurt!

Go cheer for the people who beat the shit out of you some more. It amuses them.

No one laid a finger on me. They've offered products which I've willingly paid for. I know that's a strange concept for a large contingent around here.

Re:Except its not.

[Omestes]

I'm 100% positive that that's absolutely not what happened. Funny sense of re-writing reality you have there. I've heard a term for that before, I'm sure you bandied it about before...

RTFA. That is exactly what happened, well at least the spirit of things. They told the publishers that they could set their own prices, but no one is allowed to sell for lower. This helped Apple, since they didn't have to fight over price (with their ridiculous mark-up) with Amazon (with their huge market share, and existing infrastructure, and contracts). It didn't do much to Amazon. But it screwed consumers.

90% to 60%, and no longer able to bully the publishers around to the same extent as before. I don't know how you can think that doesn't count as being "hurt". Perhaps if that three-letter term I referenced above would come to me, what is it?...

So basic economics is only useful as long as it doesn't hurt your favorite company? Amazon had a larger customer base, more infrastructure, more experience, more contacts, and thus more buying power. Normally this would mean they could leverage lower prices. But... being that this wasn't good for Apple, this is wrong now?

None of this really matters though, all that matters is if Apple actually engaged in price fixing. Which is illegal. And has been for a long time. Nintendo got busted for it in the 80's. The RIAA got busted in the 90's. So if Apple did the same thing, they should get busted now. Being a bully is legal. Price fixing isn't. Look up the definition of "price fixing", look up the actual facts of the case... This is all that matters, not what you feel about Amazon, or Apple.

You mean how I now have more plentiful options for eBooks? Wow, I'm soooooo hurt!

Before this there were multiple sources of ebooks. But... and this is all that matters to me, they were at different prices. Amazon might be cheaper, or Kobo, or Barnes and Noble, or... even Apple. Now we might have more sources, but who cares, they all cost the same (too much). Not that it matters to me anymore, I refuse to buy ebooks until they actually cost as much as I see their worth (less than actual books, since they aren't material, I don't own them, they aren't permanent, and I can't share them, and if Apple or whoever don't like me they can make them go away). Back before Apple screwed us, I loved them. Now... I'm waiting for the law, or publishers, to realize that the writing is on the wall.

They've offered products which I've willingly paid for.

At an artificially inflated price. And you have no choice than to pay that price, unlike almost any other product in the world. The real book, I can get cheaper, I can get discounted, I can get as a loss-leader, I can get clearance, I can get second hand, or at near wholesale... The ebook, I can't.

Re:Except its not.

[MachineShedFred]

Let's say the eBook market before Apple's entry was 1,000 sales (it wasn't, but it makes the math easy), and they had 90%. That means they sold 900 eBooks.

If Apple enters, and the market increases by 50%, and Amazon still sells the same 900 that they did before (assuming flat growth without the customers Apple brings to the market), then they now have 60% with the exact same amount of sales.

Market share numbers are useless without knowing total sales volume within the market, and period-over-period growth numbers.

Re:Except its not.

[Anonymous Coward]

This isnt rocket surgery.

Neither are apostrophes, but that doesn't mean everyone understands them.

Re:Except its not.

[rochrist]

Um...other than producing the fucking books.

Re:Except its not.

[bws111]

Um, people who SELL ebooks in competition with Amazon don't produce them. Authors and publishers produce them. You did know that, right?

Re:Except its not.

[Anonymous Coward]

Baen begs to differ

Its a Mac article

[tuppe666]

...but don't let it put you off. http://www.macstories.net/stories/understanding-the-agency-model-and-the-dojs-allegations-against-apple-and-those-publishers/ It basically explains the two things "agency Model" and The most favourite nation clause (which is what you talk about).

Books are precious

[tuppe666]

Price fixing e-books? Yippie disposable income doesn't actually rate at this point; we have bigger problems.

Yeah it kind of does. Ignoring the fact that this is also about protecting education...and history has taught us how important that is, and well books are kind of a big deal from a political perspective..from an information perspective...its why people want to burn them. This is an open attack on capitalism, and on the consumer by Apple which needs an immediate ban on Apple products. Books are precious

It is not only important, but Apple employees need to start being Jailed starting with the board.

Fair Vertical Price Fixing

[a_big_favor]

Vertical price fixing pertains to arrangements between a manufacturer, distributor, supplier or retailer. Horizontal price fixing, which would involve competitors colluding to set prices, remains illegal. Courts have held that vertical maximum price fixing, like the majority of commercial arrangements subject to the antitrust laws, should be evaluated under the rule of reason. Therefore, suppliers of goods and services don't necessarily violate antitrust laws by setting maximum prices their retailers can charge.

http://definitions.uslegal.com/p/price-fixing/ I don't like Apple, as in refuse to buy their products and services, but this seems like Vertical price fixing which seems fair as this agreement guarantee's Apple prices are fair within the market of that particular eBook.

Re:Fair Vertical Price Fixing

[tmorehen]

Only Apple's arrangement did not set a vertical maximum price. It set a vertical minimum price. No one is allowed to undersell Apple. That's bad for consumers.

Re:Fair Vertical Price Fixing

[Anonymous Coward]

Many companies set minimum prices, minimum advertised prices, etc. Maybe you've even seen items on Amazon where they won't show you the price until you add it to your cart. Courts have repeatedly found it to be legal.

Re:Fair Vertical Price Fixing

[bloodhawk]

The difference here is Apple are imposing that minimum price on deals that the publishers have with other stores. THAT isn't legal. Basically they are fixing the price for every store to ensure they cannot be beaten on price. You can happily make deals for price you obtain goods, you can happily sell for below what they recommend you sell for or advertise for. you CANNOT demand that no other store is permitted to undercut you.

Re:Fair Vertical Price Fixing

[a_big_favor]

Is there any case where a price floor has been found to be illegal? Apple is providing them with a "service" of advertising and purchasing. They aren't forcing companies to sell their product on the iStore.

Re:Fair Vertical Price Fixing

[Anonymous Coward]

hundreds, if not thousands. Search on price fixing.

Re:Fair Vertical Price Fixing

[bloodhawk]

Is there any case where a price floor has been found to be illegal? Apple is providing them with a "service" of advertising and purchasing. They aren't forcing companies to sell their product on the iStore.

From the Sherman Act

"The agreement to inhibit price competition by raising, depressing, fixing, or stabilizing prices is the most serious example of a per se violation under the Sherman Act. Under the act, it is immaterial whether the fixed prices are set at a maximum price, a minimum price, the actual cost, or the fair market price. It is also immaterial under the law whether the fixed price is reasonable. All horizontal and vertical price-fixing agreements are illegal per se.

Re:Fair Vertical Price Fixing

[a_big_favor]

The Supreme Court has set aside nearly a century of antitrust precedent that condemned minimum resale price maintenance (“RPM”) agreements as illegal without regard for their effect on competition. RPM agreements typically are those in which a manufacturer and its retail customer agree that the retailer will resell the products it purchases from the manufacturer only at or above an agreed price floor. In a landmark 5-4 decision, Leegin Creative Leather Products, Inc. v. PSKS, Inc., 06-480, the Court overruled Dr. Miles Medical Company v. John D. Park & Co., 220 U.S. 373 (1911), and held that the legality of vertical price fixing agreements should now be judged under a “rule of reason” in which courts balance the procompetitive and anticompetitive effects of such agreements on a case-by-case basis. http://winston.com/siteFiles/publications/SupremeCourt_RuleofReason_07_02_07_v3.html

We change laws in America. I know the case is about RPMs but now ALL vertical price fixings are no longer illegal per se

Re:Fair Vertical Price Fixing

[Anonymous Coward]

That was specifically about them being illegal without regard for competition. The only change is the effect on competition is taken into account now, and it is pretty clear from this case that that is EXACTLY what they are going after them for.

Re:Laissez Faire??

[Holistic Missile]

Thanks. I don't use iTunes, or iAnything, but the reported prices in the article ($12.99 to $14.99) are equal to or less than typical prices on Amazon and B it's dawning on me now that if Apple's been strongarming the publishers to achieve this situation, then, yes, that could be antitrust behavior. I was initially thinking they were colluding to fix prices artificially high for themselves, when it seems it was to raise other vendor's prices. Actions like refusing to approve apps for the crap store if the pricing wasn't fixed is definitely against things like the Sherman act.

Cartel

[tuppe666]

I don't like Apple, as in refuse to buy their products and services, but this seems like Vertical price fixing which seems fair as this agreement guarantee's Apple prices are fair within the market of that particular eBook.

As a long time and faithful Apple user. this is about a Catel http://en.wikipedia.org/wiki/Cartel
"A cartel is a formal (explicit) "agreement" among competing firms. It is a formal organization of producers and manufacturers that agree to fix prices, marketing, and production.[1] Cartels usually occur in an oligopolistic industry, where the number of sellers is small (usually because barriers to entry, most notably startup costs, are high) and the products being traded are usually homogeneous. Cartel members may agree on such matters as price fixing, total industry output, market shares, allocation of customers, allocation of territories, bid rigging, establishment of common sales agencies, and the division of profits or combination of these. The aim of such collusion (also called the cartel agreement) is to increase individual members' profits by reducing competition."

Cartels are very very bad. Apple board members should start going to jail.

Re:Cartel

[a_big_favor]

"agreement" among competing firms.

But they don't fit the definition of cartel. The agreement is not between Amazon and Apple. It's between Apple and someone selling an eBook.. If Apple and Amazon had an agreement, as in a Horizontal price fix, then it would be a cartel. If I were to have a book on the store, I could prize my book at $20 on Amazon, and if tell apple they can sell it at $25, they have the right to not allow purchases through their store. Im not sure why someone would do that other than the hope people probably blindly buy things without price checking on some sites more than others.

Re:Cartel

[node 3]

A cartel would be an agreement between the publishers. Do they have an agreement amongst themselves? No. They all have separate, independent agreements with Apple, which is completely legal. Not just completely legal, but that's exactly how business works. You open a store and make deals with suppliers to provide goods for your store. How do you think it's supposed to work?

Try again, fanboy.

Re:Cartel

[ZombieBraintrust]

It is not completely legal just because the agreements are written on different sheets of paper. That is moronic. They have a witness testifying about collusion. About meetings with Apple discussing what other publishers want.

Re:Cartel

[a_big_favor]

The separate pieces of paper is just to clarify that the agreement is between apple and the publisher, not publishers with other publishers and apple because that would be collusion between publishers. Could you please link the witness testifying? Because it sounds like this isn't illegal price fixing.

Re:Don't have a problem with cosumers stuffed

[Holistic Missile]

Sorry, I initially misunderstood the problem - I was cooking dinner and more or less skimmed the article. I was thinking they were colluding to enable them to fix their prices at a higher price point, then it dawned on me that they were colluding to raise the publisher's prices to other vendors so they could undercut them, and using strongarm tactics to do it... Thinking a little slow tonight - had a reading comprehension fail! :-)

Think of the Children

[tuppe666]

Sounds like Amazon's monopoly was broken. What's the problem with that again?

Amazon gained its market share by competing on price, Apple got forming a cartel with publishers using price-fixing.

The bottom line is non-apple customers are being hurt by this, including children.

Re:Think of the Children

[node 3]

Sounds like Amazon's monopoly was broken. What's the problem with that again?

Amazon gained its market share by competing on price, Apple got forming a cartel with publishers using price-fixing.

Amazon had a monopoly which they used to abuse the publishers. Apple made separate deals with each publisher (which is not collusion or price-fixing) which broke Amazon's monopoly.

This is exactly how the market is supposed to work. Where once there was one eBook provider, there are now four major providers. Apple is not even the biggest one! How can that be a monopoly or even a trust?

The bottom line is non-apple customers are being hurt by this, including children.

Seriously, how can you say something like this with a straight face? That's straight-up trolling.

Re:Think of the Children

[whoever57]

Amazon had a monopoly which they used to abuse the publishers. Apple made separate deals with each publisher (which is not collusion or price-fixing) which broke Amazon's monopoly.

Did you not read the article? Prices went up. Sellers agreed to only sell on an agency basis and not a wholesale basis. Please tell me how this is good for consumers? And the reason prices went up? Apple colluded with publishers to remove their books from Amazon if Amazon would not agree to sell at a higher price. How is that not price-fixing?

Re:Think of the Children

[bws111]

The collusion and price fixing was not between the publishers. The collusion and price fixing was the switch to the agency model and the guarantee that nobody could sell books to the public for a lower price than Apple. Amazon was using it's clout to force prices down. Apple was using it's clout to force prices up - for EVERYONE. As to the anti-trust aspect - there is no law against being the biggest at something. There is no law against being a monopoly at something. There IS a law against using the fact that you are dominant in one area to use anti-competitive tactics in a different area. It does not matter at all even if Apple had 0% of the ebook market. What mattered is that they used there dominant position in one market (mobile apps and iTunes) to make it impossible for anyone to compete with them in a different market (ebooks). How did they make it impossible to compete? By fixing the price.

Re:Think of the Children

[Anonymous Coward]

So the real question is, how is this price-fixing?

Apple used their dominance in the mobile app market to fix their price as the lowest price, if you want to sell in the iBookstore you must give Apple the lowest price and nobody is allowed to sell it for a lower price than Apple.

Re:Think of the Children

[bws111]

Are you really that stupid? Price fixing is when a MINIMUM price to the public for A PARTICULAR ITEM has been set. Since two publishers do NOT sell the same books, how could they possibly be in collusion? The price was fixed because Apple had a deal that NOBODY could sell to the public at a price lower than they could. The collusion was between Apple and the individual publishers. It was collusion because Apple said 'We can sell all the books you like, at a higher price than you are getting now. Stop wholesaling to everyone else and switch to the agency model. And once you do that, make sure nobody can sell your book at a lower price than we can'. If you can't see what is wrong with that, there really is no hope for you.

The point is not that 'Book A' costs exactly the same as 'Book B'. The point is that NOBODY can sell 'Book A' for a lower price than anyone else.

Re:Think of the Children

[Anonymous Coward]

Also, laughably, you actually need a fixed price for price fixing (it's right there in the term!).

Please, try again.

In actuality you do not need a "fixed price" as the name might seem to imply.

"The defining characteristic of price fixing is any agreement regarding price, whether expressed or implied."

"The purpose is to coordinate pricing for mutual benefit of the traders. For example, manufacturers and retailers may conspire to sell at a common "retail" price; set a common minimum sales price, where sellers agree not to discount the sales price below the agreed-to minimum price"
http://en.wikipedia.org/wiki/Price_fixing

Re:Think of the Children

[node 3]

The very first sentence of the Wikipedia link (emphasis mine):

Price fixing is an agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand.

Setting a minimum price for a product is not price fixing. Publishers are free to set a minimum price for their books. What they aren't allowed to do is collude together to set a fixed price (minimum or otherwise). Also, the book sellers (like Apple, Amazon, B&N, etc.) aren't allowed to collude to set fixed prices either.

But the seller of a product can set a minimum sales price.

Re:Think of the Children

[Anonymous Coward]

Your argument immediately fails when you call someone stupid right off the bat.

Re:Think of the Children

[bws111]

Ohh, Wikipedia. Well, you got me there.

Re:Think of the Children

[Anonymous Coward]

Setting a minimum price for a product is not price fixing.

Incorrect, fixing the minimum price most absolutely is price fixing.

"The purpose is to coordinate pricing for mutual benefit of the traders. For example, manufacturers and retailers may conspire to sell at a common "retail" price; set a common minimum sales price, where sellers agree not to discount the sales price below the agreed-to minimum price "
http://en.wikipedia.org/wiki/Price_fixing

"This benefits all businesses or individuals that are on the same side of the market and involved in the conspiracy, as prices are either set high, stabilized, discounted, or fixed." only fixed.
http://legal-dictionary.thefreedictionary.com/price+fixing

"Under the act, it is immaterial whether the fixed prices are set at a maximum price, a minimum price, the actual cost, or the fair market price."
http://legal-dictionary.thefreedictionary.com/price+fixing

In Apple's case they fixed a minimum price.

Re:Think of the Children

[poetmatt]

how was amazon a monopoly?

I don't understand how you glance over or through this fact?

you can lower prices to whatever the shit you want, but individual deals with every publisher is what this wasn't. Low prices are not by themselves predatory, even at $0. This was collectively agreeing to the same thing and signing for it individually.

Re:Think of the Children

[Anonymous Coward]

Talking to myself setting a minimum floor price is this:

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

It is illegal depending on circumstances to do it some countries:

http://www.accc.gov.au/business/anti-competitive-behaviour/imposing-minimum-resale-prices

Re:Think of the Children

[rahvin112]

Price fixing does not require a monopoly to be illegal. The FTC routinely targets price fixing in the DRAM market and there is no monopoly in that highly competitive market. In fact there have been at least 3 lawsuits by the FTC that I'm aware of that targeted price fixing in the DRAM market.

All your other arguments are meaningless against that one simple fact. Price fixing in collusion with others to force set prices in a market is illegal and has been for a very long time. Stop being a bloody fanboi, Apple colluded with the publishers and as a result eBook prices went up significantly. It's Apple's collusion that caused eBook prices to rise above the pricing for dead tree versions. If you had purchased eBook's before Apple's illegal market manipulation you would know that you could routinely purchase eBooks for less than half the paper price and after the manipulation paper was often cheaper. That's the height of market manipulation, This market manipulation cost the American book purchasers Billions. Apple shouldn't just have to pay money, the people behind it should be given prison terms.

Re:Think of the Children

[ZombieBraintrust]

Apple may not have had a monopoly but the Publishers combined did. Apple is accused of creating a monopoly by forming a trust between the Publishers. At the time Apple also had an monopoly with the IPad. For several years they were the only tablet that people purchased.

Re:Think of the Children

[whoever57]

And you have the gall to call others posters fanbois!

That's not a fixed price.

No, but it is "price fixing".

1. Apple does not have an app monopoly (required for this to be illegal)

This is something you have made up. Price fixing can be illegal in the absence of a monopoly.

2. App "dominance", even monopoly, has no bearing on book sellers (how is Apple supposed to leverage this against them?).

Again, you failed to RTFA:

When Random House ultimately signed on the dotted line, Eddy Cue sent an email to Jobs stating that one of the reasons Random House agreed to Apple's terms was because "I prevented an app from Random House from going live in the app store."

Looks like a clear example of Apple using its app store to leverage agreements on prices.

3. Even assuming they have a monopoly (they don't, but just for argument's sake), in what way did they exploit this?
4. It's funny how supposedly "Android is winning", but somehow Apple is a monopoly.

Your frequent remarks about monopolies are pure strawman arguments. Probably invented by you because of your blind support for Apple.

5. Publishers could have easily not gone with Apple's offer. Amazon was eBook monopoly at the time (which is exactly why they went with that deal, to leverage against Amazon!), and are still the dominant eBook seller (60% market share).

That claim is refuted by the facts. Publishers were able to do exactly what you claim they could not: "gone with Apple's offer".

This was just a shrewd business deal which gave power back to the publishers and busted the Amazon monopoly (which they were actually abusing against other book sellers, and even the publishers themselves!).

Yeah, great monopoly busting: resulting in increased prices. Yeah, that's the way to go. Don't want those dirty monopolies that result in lower prices.

Honestly, do you realize how stupid your posts are?

Re:Think of the Children

[dr.g]

This reads an AWFUL lot like talking points handed out by publishers' PR departments (vetted by, and with contributions from, legal). I mean, that's what I would say if people called me on unwarranted 600% markups on a product. And if all the other publishers wanted to mark up the automated transfer of digital files so that the cost to the consumer was the same as for the purchase, printing, warehousing, and distribution of paper books...why no "collusion" there! That's just coincidence!

And do you really expect people to not see that the only "harm" averted here is to those publishers' windfall profits? Amazon's ONLY crime was attempting to force the admission from the publishers that they could indeed sell eBooks for CONSIDERABLY less than the price of paper editions and still profit therefrom. Apples has nobly (/snarkasm) saved them from such an admission.

It's not the government's place to preserve the publishers' windfall, at least until such protection has been duly lobbied/paid for.

You fucking shill.

Re:Think of the Children

[Colonel Korn]

Sounds like Amazon's monopoly was broken. What's the problem with that again?

Amazon gained its market share by competing on price, Apple got forming a cartel with publishers using price-fixing.

Amazon had a monopoly which they used to abuse the publishers. Apple made separate deals with each publisher (which is not collusion or price-fixing) which broke Amazon's monopoly.

This is exactly how the market is supposed to work. Where once there was one eBook provider, there are now four major providers. Apple is not even the biggest one! How can that be a monopoly or even a trust?

The bottom line is non-apple customers are being hurt by this, including children.

Seriously, how can you say something like this with a straight face? That's straight-up trolling.

Prices went up 50% in a single day when this agreement went into effect. Regardless of the free market principles of the thing, every consumer lost.

Re:Think of the Children

[mjwx]

The bottom line is non-apple customers are being hurt by this, including children.

Seriously, how can you say something like this with a straight face? That's straight-up trolling.

Can you, with a straight face tell me that Apple's competitors have no customers under the age of 18?

Re:Think of the Children

[dgatwood]

The problem with your definition is that minimum advertised price (MAP) policies are generally considered to be legal (since about 2008), and they're unfortunately fairly common—Canon and Nikon, many major clothing companies, etc. There's little difference between a typical MAP and the agency model with a "most favored nation" clause beyond that a reseller is requiring the manufacturer to set a MAP in order to sell through that channel. If the MAP itself isn't anticompetitive, then neither is an MFN clause, IMO.

Personally, I'd love to see the courts find MAP policies to be inherently anticompetitive. Unfortunately, there's a fair amount of legal precedent for MAPs being legal, so I'm not holding my breath on the courts prohibiting them. If they did, however, that would also make MFN clauses like the one they're talking about here illegal, too, because a contract term cannot require you to break the law.

Re:Think of the Children

[gnasher719]

This is exactly how the market is supposed to work. Where once there was one eBook provider, there are now four major providers. Apple is not even the biggest one! How can that be a monopoly or even a trust?

You forgot that Apple is eeevil. And Google isn't, so Google is right. Sorry, we are talking about Amazon. Amazon isn't Apple, so Amazon isn't evil, so Amazon is right. And Kindle uses Android which is free so Kindle doesn't use DRM. Well, it isn't DRM because it works on all Kindles. But Apple uses AAC for music which is proprietary and evil and DRM. Even though the A's don't stand for Apple but for Advanced and Audio and there is no DRM, but it is Apple and Apple is evil.

Do I get modded up now?

Re:Think of the Children

[narcc]

The trouble, of course, is that their lowest price was higher than the previous lowest price.

Re:Think of the Children

[Anonymous Coward]

You are completely and utterly wrong. Price fixing is any agreement involving price between entities on the same side of a market.

Your problem is that you are misunderstanding the various definitions of the term fixed that can apply here. In this case it means illegally predetermined (look up the definition of fixed if it helps), instead of meaning a single unchanging set price.

Re:Think of the Children

[Anonymous Coward]

You don't need a monopoly to get in trouble for monopolistic reasons, just ask Google.

Re:Think of the Children

[bill_mcgonigle]

I admire your well-crafted rebuttal! Just one note:

Yeah, great monopoly busting: resulting in increased prices. Yeah, that's the way to go. Don't want those dirty monopolies that result in lower prices.

Many readers here may have been brainwashed in grade school into believing that monopolies are always harmful. That's certainly one type of monopoly, which usually exists because of some artificial grant to it by a State, but it's also possible (and we have had) monopolies which exist simply because one company is fantastic at providing its service or product and nobody else can out-compete them on the merits. These sorts of monopolies last as long as they don't bring prices to where others can outcompete them or engage in other unpredictable behaviors (e.g. wild price swings) and are typically considered beneficial.

That's just to reiterate that ending a monopoly can certainly be a cause of increased prices.

Re:Think of the Children

[Anonymous Coward]

Any company that wants a 30% cut of profit for doing absolutely nothing, is evil. They are no better than a protection racket.

Re:Think of the Children

[MachineShedFred]

If someone bought from Amazon before Apple got into the business, and then continued buying from Amazon after Apple got into the business with the same or lower prices, how did they get hurt again? It's not like e-books are a finite commodity.

You might be able to make an argument for Amazon getting hurt, but I don't see it for the non-Apple customer.

Re:Think of the Children

[Anonymous Coward]

Sounds like Amazon's monopoly was broken. What's the problem with that again?

Amazon gained its market share by competing on price,

by which you mean selling way below cost.

Re:Think of the Children

[Anonymous Coward]

The price was fixed because Apple had a deal that NOBODY could sell to the public at a price lower than they could. The collusion was between Apple and the individual publishers.

And Amazon had and still has almost the same clause - just worse, because in their case the price will stick at the lowest price for ever, making promos for non-Amazon stores impossible. http://feldmanfile.blogspot.de/2012/04/most-favored-nation-landmine.html http://paidcontent.org/2011/11/03/419-amazon-wont-pay-self-published-author-for-books-it-mistakenly-gave-away/ http://www.nytimes.com/2012/04/30/business/media/byliner-takes-buzz-bissingers-e-book-off-amazon.html?_r=2&smid=tw-nytimes&seid=auto&

Re:Think of the Children

[Anonymous Coward]

>Yeah, great monopoly busting: resulting in increased prices.
Okay. Now YOU sound stupid.

If Walmart were eliminated, the prices on almost EVERY good they carried would go up again. They sell so much, they are able to squeeze the prices down on the various manufacturers. Eliminating them would result in higher prices (and more money for the companies who make those items, probably).

You do realize that monopolies are not JUST about high consumer prices, right?

Re:Think of the Children

[Anonymous Coward]

Yeah, great monopoly busting: resulting in increased prices. Yeah, that's the way to go. Don't want those dirty monopolies that result in lower prices.

Study your economic history. Monopolies drive prices up over time, not down. The only time they drive them down is in a temporary effort to destroy competition that can't compete on price to strengthen their stranglehold on the market. I mean, seriously, you think that Amazon sells you cheap books out of the goodness of Jeff Bezos' heart? Like every other corporation, Amazon's long-term goal is to expand its market power and generate profits. Once it's no longer in Amazon's interest to sell you books at or below cost, it will stop doing so.

Amazon's behavior is classic destructive monopolist. Borders Bookstore is now vaporized, Barnes & Noble, Books-a-Million, et al are closing stores, etc. Much of that is a direct result of Amazon selling books (physical and e-books) at a loss. Lots of people use the brick-and-mortar stores to examine the merchandise, then go home and buy it from Amazon because the stores can't match the prices. Once Amazon ran all of the physical brick-and-mortar stores out of business and established itself as the only major book dealer, how long do you think it was going to keep selling at or below cost?

Apple broke that stranglehold and then the DoJ reinstated it. Enjoy your low book prices now. They won't last. Amazon will rebuild its monopoly and once the competition is gone, Amazon will set book prices wherever it wants.

Re:Think of the Children

[Anonymous Coward]

I'll bite. Can you provide one example of a beneficial monopoly? Better yet, can you provide one example of a beneficial monopoly for every instance of a malignant monopoly that has existed?

Re:Think of the Children

[Anonymous Coward]

Apple did not fix *any* prices. None at all.

Your statement of, "nobody is allowed to sell it for a lower price than Apple" is backward and truly irrelevant.

Apple chose the agency model and required Apple's customers (the end users) to have "Best Customer" status. Apple's customers are guaranteed to be allowed to have a price as good as any other, i.e., be treated as the publishers' "Best Customer" -- but that minimum price is never set by Apple.

Thus no matter what price the publishers authorized the retailers to sell their books for, Apple would be allowed to match that price.

If the publishers authorized Amazon to sell a certain book for $0.99 then Apple would be able to sell it for that same price. If the publishers authorized Amazon to give a book away for free then Apple would be able to give it away for free too.

  There is no requirement that Apple sell books at that lowest price. If Apple did not want to give a book away for free, Apple could sell it for $0.99 and get 30% of that price -- if anyone would buy it from them when they could get it for free elsewhere. In this exact scenario (which I doubt would happen in reality) other retailers *could* be selling the books at lower prices than Apple. The issue is that Apple would automatically be allowed to match the price of any other retailer -- if Apple chose to do so.

Looking at it another way...
Say Amazon is selling a book for $9.99 and under the typical scenario the publisher gets half that (about $5.00).
If Apple sells the same book for the same price (Apple is guaranteed to be authorized to price match) then the publisher gets about $7.00.
Then Amazon decides to sell the book for $1.99 and effectively sells the book at a loss as the publisher still gets about $5.00.
Then the publishers *must* allow Apple, if Apple so desires, to sell the book at $1.99 with the publisher getting about $1.40 and Apple getting about $0.59.

Apple gave 100% control of the pricing over to the publishers. Apple just gets a flat 30% under the agency model.

How is this price fixing on Apple's part?

Re:Think of the Children

[Anonymous Coward]

Under the agency model where Apple gets 30% of whatever price was decreed BY THE PUBLISHERS how is this price fixing on Apple's part?

Re:Laissez Faire??

[Holistic Missile]

Thanks. I did some more research on it, and realized that I misunderstood the problem when I first read (skimmed?) the article. It seems they were using strongarm tactics to coerce the publishers into charging higher prices to their competition. I don't use iAnything, and really have no idea how big Apple's book store is, or how many e-books they sell. My library system has quite a selection of e-books for checkout, and I prefer to do that over buying them, anyway.

Market share means market share.

[tuppe666]

Man I fucking love using market share as metric! Since it is a unitless number it can be used to say anything you want

No market share means just that market share. If you want to express a number meaning % of the market irrespective of the size of the market you would use that. In this instance its the perfect metric.

violations of Section 1 of the Sherman Act, 15 U.S

[tuppe666]

http://online.wsj.com/public/resources/documents/ebooks04112012b.pdf from the filing

"The purpose of this lawsuit is to enjoin the Publisher Defendants and Apple from further violations of the nation's antitrust laws and to restore the competition that has been lost due to the Publisher Defendants' and Apple's illegal acts. Defendants'
ongoing conspiracy and agreement have caused e-book consumers to pay tens of millions of dollars more for e-booksthan they otherwise would have paid"

...it could be that I'm irrational :)

the govt is the ringmaster

[Anonymous Coward]

I think the answer is clear, I would rather either Apple or Amazon have any money then the govt or the infrastructure the govt uses to parasitically extract from these innovative ventures. The govt is desperate, and becoming more and more aggressive. I am seeing tons of damage to small local businesses due to govt financial issues. Just like the hospitals stayed alive by falsifying cause of death and increasing malpractice the govt will reorganize itself around a profit motive and survive unless we self organize without them... the clock is ticking... good luck ;)

Mr. Cook ... Beware

[Anonymous Coward]

Tomorrow,
1) your statements in the USA Congress will be recorded and as such can be used against you in a court of US Law.

2) given this you have the right to remain silent.

3) you have the right to an attorney, and if you can not pay for the support of an attorney the court will provide you with one.

4) do you understand these statements read to you Mr. Cook ? Do you have the ability to affirm or disaffirm the words read to you this day ?

Mr. Cook ... please forgive us ... but can you answer to the question ? Mr. Cook ... this is taking too much time ... please answer .... ?

The Judge looks to the Guard at the Chambers Doors. They now know what to do.

The Press and 'Interested Onlookers' are escorted from the Chamber.

Mr. Cook looks .. worried ! Ah Ha the Judge picked that up ! The Judge orders Mr. Cook to be bound by chains on his ankles and neck ... Mr. Cook Objects .. Bad choice Mr. Cook ... Mr. Cook is beaten by the Guards.

The Judge proclaims. Well Mr. Cook. Welcome to your reality ! Do you like it ? Do you believe you are privileged human being to exist on Earth ?

Blood gushes from Cook's mouth from the beatings. There are more to come !

The Judge proclaims. Mr. Cook you have much wealth but the world has little wealth. What do you propose to correct this inequity ?

Cook breathing heavily looks up to the Judge but says nothing !

Ah ! The Judge Proclaims. Mr Cook, you 'Attitude' is not in keeping with this tribunal. You must think about your like and future if ... there is to be such ! That is you hands as of ... now ! What is your answer !

Cook vomits more blood on the floor. One of the 'Attendants' gives Mr. Cook a 'Hello' head butt from his rifle ... Mr. Cook falls to the floor yet again.

The Judge Proclaims. Mr. Cook ... please forgive but we are very ... how should I say ,.. Ah ... We are tired of your pathetic display. Do you Want To Die ? If So We Will Render You To Hell !

Mr Cook collapses to the floor ... not breathing.

The Judge Proclaims. Ah ! God is indeed wise !

Not a monopoloy

[Anonymous Coward]

Sounds like Amazon's monopoly was broken. What's the problem with that again?

Getting the lions share of sales in a particular market is not a monopoly, they don't control the market and never did.

Re:Ring master

[rahvin112]

A tried and true false equivalency argument. Afterall, if the world isn't perfect we can't think some things are bad and deserved to be punished. But why are you worried about those silly little Justice department issues when there are so many other important issues? See, false equivalency can get you too, until world peace exists and everyone lives in a mansion there are far bigger problems than tackling the real crime we can prosecute today.

Apple cost the American book buying public Billions in increased prices. They weren't trying to break an Amazon monopoly, they were trying to fix prices to make their own entry into the market more profitable. Everyone in this country and probably world that purchased an eBook after Apple entered the market paid almost double what they would have under market pricing. Those billions could have been put to charity and social welfare and instead they were put into the coffers of Apple. Apple's market manipulation very well could have cause starvation. See I can make false equivalency arguments just like you.

Apple and the publishers illegally colluded, unlike Apple the publishers were smart enough to see this was very illegal and immediately settled with the government and as a result got to keep most of their ill gotten gains. Apple will fight and lose, and hopefully it costs them much much more. Personally I think people should be in jail for what they did. You don't deserve a slap on the wrist when you steal billions through collusion.

Justice Department ?

[Anonymous Coward]

A 'Presidential Order' to the Justice Department to investigate the Department of Treasure i.e. IRS lis like the Chicago Police in 1923 to ask All Capone to check his Tax Records and adjust his condom.

Re:Don't have a problem with cosumers stuffed

[mjwx]

What behavior?

Price fixing.

When Hynix et al. got done for RAM price fixing you didn't defend them. When Samsung got done for LCD price fixing, I'll bet you didn't defend them.

Price fixing is anti competitive and illegal. It's illegal because it harms consumers and producers.

Tim Cook should go to jail? For making sure no-one else was allowed to sell books for less than he did?

Fixed that for you.

It sounds quite a bit more serious when you say what is actually going on.

Whilst jail is a bit of an over-reaction (not nearly as bad as you "B-B-B-But Apple is god and can do no wrong" knee jerk response) this does need to be punished. Severely and harshly and this needs to be more than just a slap on the wrist fine.

How would you punish Apple?

[HockeyPuck]

According to their latest 10-Q filing AAPL has about $140Billion in cash and cash equivalents... and make $70B in gross profit every year...

Short of breaking them up... there's no monetary punishment you could levy on AAPL.

While they're not too big to fail, they are too big to punish.

It's like your grandmother spanking a grown elephant, it won't do any good other than make a bit of noise.

Re:How would you punish Apple?

[Omestes]

I don't even care if they hurt Apple. I just want things to be good for consumers again. Force the publishers to have to negotiate again on an individual basis. Thats all I, the customer, care about. Apple can do whatever the hell it wants, as long as it is legal.

 

Re:How would you punish Apple?

[Overzeetop]

Well, if a man would be sent to prison for 5 years for such an infraction, I presume that the penalty would be 5 x $70B = $350B. What's so difficult about that?

Re:How would you punish Apple?

[petermgreen]

If a crime was committed you need to punish the *people* who did it.

If I had free choice of punishments i'd say chain them up in the stocks for a week or two and let people throw rotten fruit at them. Then send them to do hard labour for a year or so in a remote mining camp with the condition that any attempt to access or borrow against the wealth they have in their life outside punishment will result in permanent confiscation of that wealth. Visits from friends and family would be allowed but at least half the cost of those visits would have to come out of their payment for work in the mines with the remainder being paid by the visiting friend of family member and any gifts during those visits would be limited to token levels.

Re:How would you punish Apple?

[grumpy_old_grandpa]

So that bit about the rotten fruit seemed like a spur of the moment comment. But the prison arrangement you really had figured out to the last detail... Did I miss any prison games lately? "Theme Prision", "The Sims Behind Bars", or "GTA - Caught DLC"?

Re:How would you punish Apple?

[petermgreen]

Heh,

I thought, "send them off for a few years of hard labour", then my brain started thinking though how such a sentance could work in the modern world. Forbidding their friends and family from contact completely would be too cruel IMO, OTOH having rich friends and family jetting in all the time and bring expensive gifts wouldn't seem like much of a punishment.

I don't belive conventional prison is appropriate for most white collar criminals but I do belive they need to have their luxuries taken away and be made to live a hard life for a while.

Re:Don't have a problem with cosumers stuffed

[node 3]

Glad we cleared that up!

Apple COULD take a loss, however.

[Anonymous Coward]

Apple can sell some of their books as "loss leaders" and that isn't against the contract, and others could reduce their price too, BUT ONLY ON THE SAME BOOKS and to the same or higher level.

Magical market

[Impy the Impiuos Imp]

As long as it's a dollar less than physical books, they are price cutting by their innovation, and are heroes.

"Hey! You're trying to rip us off (in this market you created which didn't even exist a few years ago, and still offers a way better price than physical printing)! How dare you!"

The iPhone ringmaster?

[Rambo Tribble]

Do you imagine the pun was intentional?

Fix it by legalizing file sharing

[cellocgw]

We can argue all we want about just who colluded with whom, but why not fix the root problem? Digital data are always going to be copied (and copy-able), and the sooner the law recognizes that, the sooner publishers as well as retailers (including Apple and Amazon) will adjust their prices to what people are willing to pay. As a close friend said to me,"Keep finding me free epubs on the net until the store price drops below $5." iTunes, for example, continues to sell a zillion tracks despite the plethora of torrent files available. The same model (i.e. acceptable price point) will work for books.

earn

[remas100]

EARN MONEY EARN MONEY