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

Posted by samzenpus on from the paying-more dept.

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."

8 of 192 comments (clear)

  1. Think of the Children by tuppe666 · · Score: 4, Insightful

    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.

    1. Re:Think of the Children by whoever57 · · Score: 5, Insightful

      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?

      --
      The real "Libtards" are the Libertarians!
    2. Re:Think of the Children by bws111 · · Score: 5, Insightful

      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.

    3. Re:Think of the Children by bws111 · · Score: 5, Insightful

      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.

    4. Re:Think of the Children by rahvin112 · · Score: 5, Insightful

      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.

    5. Re:Think of the Children by Colonel+Korn · · Score: 4, Insightful

      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.

      --
      "I zero-index my hamsters" - Willtor (147206)
  2. Re:Interesting by bws111 · · Score: 4, Insightful

    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.

  3. Re:Except its not. by bws111 · · Score: 4, Insightful

    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.