Slashdot Mirror
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."
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.
...gis sdrawkcab (usually not responding to ACs; don't bother posting as AC)
...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.
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/
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)
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.
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.
lucm, indeed.
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! :-)
When you're dead, you don't know you're dead. It only affects the people around you. Same thing when you're stupid.
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.
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.
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.
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.
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"
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.
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.
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?
A patriot must always be ready to defend his country against his government. -edward abbey
"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.
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.
https://app.box.com/WitthoftResume Code: https://github.com/cellocgw