Slashdot Mirror
Apple E-book Price-Fixing Trial Begins
An anonymous reader writes "Technology giant Apple is to begin its defence against charges by the US government that it tried to fix the prices of e-books. The iPad-maker is accused of working with publishers in 2009 to set prices in an effort to compete in the e-book market dominated by Amazon. Quotes from Steve Jobs' official biography have been cited as evidence in the case."
Yes please.
Ah In Jobs we trust :)
Build a Man a Fire, and He'll Be Warm for a Day. Set a Man on Fire, and He'll Be Warm for the Rest of His Life.
If Apple doesn't set the prices, how can they fix the prices?
"He is so stupid. And now back to the wall!" Moe Szyslak
Fascinating comment at the end of one of the stories linked to here. The writer claims that Amazon's model is unsustainable and equivalent to the Standard Oil play of selling at a loss to drive competitors out of business. In his opinion, Apple should be commended for raising prices by a few dollars per book? What say you Slashdot? What I have trouble determining in this shift from physical media to digital is how the artists are making out in this brave new world.
That Amazon's business model is anti-publisher does not excuse an alternative business model that is rabidly anti-consumer. They're both garbage.
No kidding!!! What do you say at this point?
"Technology giant Apple is to begin its defence against charges ..."
Doesn't the prosecution present their case before the defence begins?
Normally yes, but the DOJ has already presented its case to the public, and the judge has already decided. Might as well go right for the appeal.
Of course news about a fake are Fake News.
They could price the book at $10,000 if they want I don't have to buy it. If I agree to buy something only to find it cheaper elsewhere doesn't mean I was ripped off.
I love Jesus, except for his foreign policy.
Books I understand, the people who bought iDevices paid a premium fully knowing cheaper "viable" alternatives existed. I don't follow why they should get anything back, those were fully informed decisions.
P.S. I prefer android personally.
First off, Amazon built the e-book market. When e-books started they were just niche amusements people got for their Palm Pilots and Windows PDA's. Publishers didn't care about them at all and made zero effort to establish them.
Amazon laid the groundwork, connected their store to a decent e-book reader and made e-books into the market it is today.
They were also not bankrupting any publishers. They paid the wholesale price for the books that the publishers asked for and then CUT THEIR OWN PROFIT MARGIN by selling lower than what they paid. The publishers already made a profit off the hardcover, the paperback and the e-books.
The problem wasn't that publishers were getting paid, in fact e-book sales were keeping alive books that were decades out of print and creating new profit where none had existed before. It was that they didn't feel they were getting enough. These are the same publishers that have said publicly that Libraries are stealing profits from them, btw. They are the reason an e-book now retails the same price as the hardcover even when the paperback is being sold simultaneously. Publishers are the reason an e-book can retail for $9.99 when the paperback sells for $7, if it's still even in print.
The publishers jumped into Apple's arms when they proposed their deal because it gave them a way to increase their profits and if it wasn't shady they wouldn't have all settled with the government rather than stand with Apple in their defense.
Smaller competitors who want to get into the market. Effectively, price controls like this will freeze out the competition. How? Well, say Apple are making 200% profit on everything they sell because they have price-fixed. You now can sell at 200% profit and compete with them (and thus become part of the cartel yourself), or you can try to undercut them. But they have a huge market, to themselves, with huge profit margins, complete control of the market (because they are all agreeing to price at whatever they want) and lots and lots and lots of spare cash to keep you out / buy you up.
Because of this, you also get a lack of competition (what's the point of competing if you can all agree to just set prices to X and no-one "wins" the market for having a better product?), the market stagnates and the customer gets screwed - not by the raised prices (as you say, that's up to the customer) but because the market is so closed that they either pay lots or DON'T get the products at all. It's also a pretty good way to kill off the technology and (thus) competitors who rely on book sales to sell reading devices, etc.
A company sets its own prices. That much is certain. But they should not be getting into groups and DECIDING how much the customer pays between them collectively, with no reference to how much it costs to supply the product itself, and no consumer interest. It's illegal for a reason. It destroy markets, stifles innovation, removes competition, and makes everything a big game to make money with no regard to consumers at all. And, at the end of the day, it becomes "pay lots, or get nothing", which isn't a technique that benefits taxpayers either. Yes, you get greater tax revenue from profits (you hope!), but you also get less people spending money and less money available to spend on other things for those that do.
The point is that the market is bigger than a company, even a government. Harming the market DIRECTLY harms the stability of the economies of world governments. Thus it is illegal.
There's nothing stopping a company with a patent licensing its patent ONLY for 10 bajillion dollars even though it costs next to nothing to manufacture. That's just business. Nobody's stopping that. But colluding with competitors to price other competitors and your own customers out of the market is in nobody's interest - not even the companies that do it, or their shareholders!
I think the word you're looking for is "condone". Condoming an island country could prove to be extraordinarily difficult.
Glad to see they have enough evidence to go after Apple.
It seems fairly obvious that they are guilty.
Now how about some banks?
Maurice W. Hilarius Voice: (778) 347-9907
Prior to e-books, when a publisher stopped printing a book, their profit from that book was done. If it was a very popular book they might order more printings, but again, when the printing stopped so did that books revenue stream. This was a problem for the publisher, the author and the reader. The publisher and author's side is easy to understand; no new income, but consider also the reader that didn't know about that author at the time, it's been 20 years and they just read an author's newest novel which is part of a series and they feel a desire to read their older books. If they are lucky they might be able to track down a copy from a library or hunt through a few used book stores for one, neither of which gets any profits back to the author. Or conversely they found a dog eared used copy in a flea market and want to read more of that author's works, but the author died and all their books are out of print.
E-books, and Amazon created a new revenue stream for publishers, buying up books at wholesale (for which they paid what the publishers asked! how is that anti-publisher??) and selling those e-books below their own costs to expand a market from a niche curiosity into every day ubiquity. E-books continue to generate revenue long after the printing presses shut down, unlike paper books. So these poor, taken advantage of publishers went from zero profits after print to "some" profits. Oooo, evil Amazon, how could you mistreat them so???
It was the publishers with Apple's help that decided "some" profit wasn't enough, they wanted moar! So now you get numerous cases where the e-book's price is HIGHER than the paperback!! I've seen e-books listed for the hardcover price years after the book was released and used paperback copies were selling for $1 right beside it.
I swear, the only publisher that ever really understood e-books was Baen. Give the old books away for free as advertising for the new books, it's not like they were making money sitting on a hard drive waiting for a new print run!
Condoming an island country could prove to be extraordinarily difficult.
How hard could it be? It's a reasonably small island, and latex grows on trees!
You can never know everything, and part of what you do know will always be wrong. Perhaps even the most important part.
It would be easier if it was hard!
In every voluntary trade each side benefits otherwise there would be no trade.
True.
If Apple wants to set up deals with publishers to set prices nod the customers agree to pay those prices who is actually the victim?
Everybody but Apple.
The reason its not so simple is because its not a single-variable problem. The optimal price for each retailer to sell at is different.
A simple example of this sort of thing are price differences between the prices at convenience stores and grocery stores.
What Apple was doing was conspiring with the publishers so that the minimum price that anyone could sell at was a close approximation of only Apples optimal price. The publishers have already plead guilty. Apple is trying to claim innocence. Fuck Apple.
"His name was James Damore."
Wrong. You can't make the deal because APPLE has a contract with the publishers that prevents YOU from setting your prices.
You: Mr Publisher, I would like to lower the prices to my customers. To do this, I will take only a 20% cut, you will still make the same money.
Publisher: No can do. We have this deal with Apple that says nobody gets a lower price than their customers. However, since you offered to take only 20%, you will get only 20%, but your customers will pay the same. We will keep the difference.
I know it's trendy to hate apple, but the fault lies at the feet of the extremely greedy publishers.
An e-book should be MAX 50% the price of the paper book.
A lot of the troubles of the modern-day world can be credited to "should be". A lot of things "should be", but actual fact makes them impossible.
Before saying an e-book "should be" max 50% of a paper book, I'd want to see an honest breakdown of the true costs of producing the book in the abstract - paper, electronic - or whatever, totalling up the costs of creating the book, making it fit for human consumption, typesetting, marketing and so forth, all while paying all those involved a decent living wage and supplying them with the capital equipment they require. Plus enough profit to make them want to go through it all over again for the next book. If that can be done for half than the approximately $7USD/copy that seems to be about average for USA paperbacks, well and good. but leave the "should be"s out of it. A fair price for a fair product is all that I ask. There are books I haven't bought because I considered them overpriced, and no few of them are ebooks at hardback prices, and there are books that I bought because they were so cheap I didn't care if they were immortal literature or not. Very little of my purchase decision was based on what "should be" the cost of producing them.
Books are not commodities. A work by Terry Pratchett probably costs no more to produce than a bodice-ripper from Harvey Snorkwacker. Less, once purchase volumes start kicking in. However, Pratchett's work has more intrinsic value, and that's something worth paying a premium for. At least as long as it's not too high a premium. The old-fashioned "sell it hardback for a year at a high price first" model doesn't work for me. Even when it was the only game in town, I waited for the lower-cost paperback edition.
To be fair and clear, publishers are scum and this seems to be consistent regardless of the material being published -- research/scholarly journals, books, music, movies/TV and video games.
They are in the business of selling someone else's work and occasionally giving some of that money back to the people who created the content. For the publishers, it's "Money forever" but for the creators, it's "work for hire" and so they don't get money forever unless they somehow managed to cheat the publishers out of it. This type of capitalist vampirism should be outlawed as they don't "represent" the content creators as they so often claim. What we need are agency type arrangements where the publishing agencies can only get like 10 to 15%.
Condoming an island country could prove to be extraordinarily difficult.
It might be easier if it were a penisula.
-- This and all my posts are in the public domain. I am a lawyer. I am not your lawyer, and this is not legal advice.
The publishers were doing fine, and continue to do fine. They still continue to make most of their profits from physical books, btw, which they seem to have no problem selling through Amazon and allowing Amazon to set the price for. In the vast majority of e-book listings, in fact, the PHYSICAL PAPER BOOK COSTS LESS THAN THE E-BOOK, and yet e-book sales account for only 25%-30% of publisher profits.
How exactly, does that work btw? I can buy a CD for $15, but download the album in MP3 format for $9.99. A DVD costs $20, buying the download is $15. Yet only in books is the digital copy routinely priced higher than the physical copy. Yet you want to tell me the publishers are going bankrupt? The same publishers who would gleefully close down all public libraries and have openly accused them of theft? How do you defend these a-holes and feel good about yourself?
Printing Geek here: Paperback book would be roughly $0.01 or LESS per text page (depending on the run length of total copies) and $0.04 per cover. All of this includes binding and shipping. So, let's look at a 300 page paperback: about $3.10 per printed copy. Now, think of a large run book with text page cost at $0.005 or $0.0025 per page: ~$1.54 or ~$0.79 per copy. I think the lower range of prices is even more likely considering the junk paper stock and black ink only for paperbacks.
Keep in mind these cost are assuming domestic US production of books! I don't think I can pick up one of my kids books and not see "PRINTED IN CHINA" on the back.
Funny story, this is completely wrong. I've seen everyone saying that's how it works in comments, but if you actually look into what they're being accused of, this isn't it. You could still set your own prices to whatever you like, but after doing so Apple will lower their prices. The thing that apparently makes this non-competitive is that Apple still gets their 30% instead of taking the cut that you would have to in order to sell the book for less. From all of the actual facts I've been able to find, other retailers could still actually set whatever price they wanted. Of course, you could only find this out by actually reading whole articles, which apparently nobody does because at the end of articles explaining this, readers still claim it's what you describe. It's kind of scarey how many people think they fully understand the case but have no idea what an MFN clause actually is or how Apple included it in their contract. Most people even assume a MFN clause is illegal, which isn't true unless it violates other laws, same as any other clause of a contract. Apple just took it from the usual wholesale system and applied it to the agency system they wanted to use, and this supposedly makes it illegal. Mind you, the most important piece of evidence in the case I've been able to find is a quote from Jobs' biography that doesn't admit to any wrongdoing or collusion at all, it only shows how they felt about Amazon's price model and what they wanted to do themselves.
Hahahahaha, you mean scanning the paper version and stuffing it into a .mobi file after some dodgy OCR?
A lot of the legitimate ebooks I've seen should be returned as unfit for purpose.