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Judge OKs Class Action Suit Against Apple For E-Book Price Fixing
An anonymous reader writes "Reuters reports: 'A federal judge in New York granted class certification on Friday to a group of consumers who sued Apple Inc for conspiring with five major publishers to fix e-book prices in violation of antitrust law....The plaintiffs are seeking more than $800 million in damages.' The trial will probably be in July or September. The judge who granted class certification, Denise Cote, ruled in 2013 that Apple was guilty of colluding with other publishers to raise the price of e-books and to force Amazon.com to do the same."
The fact that anybody can't is quite disturbing. Obviously there is a major problem with the system and a class action lawsuit should go forward. The publishers who are forcing DRM and giving discriminatory pricing should be prohibited.
Anyone you accuse of participating in a cartel should be sued for dissolution, not monetary damages.
So how do I sign up for my $1.00 iTunes credit?
Despite the legal action (and victories) by the DoJ it doesn't seem to me like we've had any price drops to reurn us to the pre-cartel pricing. So apparently these guys get a slap on the wrist and will get to keep the fruits of their bad behaviour?
How is setting the minimum price of books different than setting the minimum price of apps?
There was no "pre-cartel" pricing. There was only Amazon selling at a loss to drive every other ebook store out of business. They failed to do that, though they have been successful at getting the courts to go after everyone else in retribution.
from http://www.justice.gov/atr/cas... "On January 27, Jobs launched the iPad. As part of a beautifully orchestrated presentation, he also introduced the iPad’s e-reader capability and the iBookstore. He proudly displayed the names and logos of each Publisher Defendant whose books would populate the iBookstore. To show the ease with which an iTunes customer could buy a book, standing in front of a giant screen displaying his own iPad’s screen, Jobs browsed through his iBooks “bookshelf,” clicked on the “store” button in the upper corner of his e-book shelf display, watched the shelf seamlessly flip to the iBookstore, and purchased one of Hachette’s NYT Bestsellers, Edward M. Kennedy’s memoir, True Compass, for $14.99. With one tap, the e-book was downloaded, and its cover appeared on Jobs’s bookshelf, ready to be opened and read.
When asked by a reporter later that day why people would pay $14.99 in the iBookstore to purchase an e-book that was selling at Amazon for $9.99, Jobs told a reporter, “Well, that won’t be the case.” When the reporter sought to clarify, “You mean you won’t be 14.99 or they won’t be 9.99?” Jobs paused, and with a knowing nod responded, “The price will be the same,” and explained that “Publishers are actually withholding their books from Amazon because they are not happy.” With that statement, Jobs acknowledged his understanding that the Publisher Defendants would now wrest control of pricing from Amazon and raise e-book prices, and that Apple would not have to face any competition from Amazon on price."
Amazon, using its monopoly power in ebooks, kept prices artificially low. When Apple entered the market, Amazon lost some of its monopoly power and publishers used this event to increase eBook prices across the board.
From http://www.justice.gov/atr/cas... Page 160 "Amazon screwed it up. It paid the wholesale price for some books, but started selling them below cost at $9.99. The publishers hated that — they thought it would trash their ability to sell hardcover books at $28. So before Apple even got on the scene, some booksellers were starting to withhold books from Amazon. So we told the publishers, “We’ll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that’s what you want anyway.” But we also asked for a guarantee that if anybody else is selling the books cheaper than we are, then we can sell them at the lower price too. So they went to Amazon and said, “You’re going to sign an agency contract or we’re not going to give you the books.”"
Minimum price agreements were widely used in the heyday of CDs. The practice was upheld by courts.
I noticed this gets modded up as fact...the truth is a little more interesting http://www.stereophile.com/new... this is an article from 2000 where the Big Five got in trouble with the Federal Trade Commission for "Minimum Advertised Pricing on CDs" where retailers were forbidden to *advertise* CDs below an established minimum. Unlike Apple they had heard of Sherman Antitrust Act
She went into the first trial having announced her prejudice, and now she's just doubling down on her abuse of power because she's in a snit over Apple pushing back on the shakedown.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
I don't have any.
Litigation hurting them is a positive in my mind. However, they probably won't get fined enough money to really hurt them.
Unlike CDs, Apple only set a *maximum* price. The eBook publishers were free to set any price they wanted, even $1 a book. The reason prices went up to that maximum is because eBooks were more valuable than the wholesale or lower price Amazon was selling them for.
At the time she made her statement she had seen all documented evidense. She had all the depositions, paperwork, phone records, and emails. Based on that she warned Apple that there was actual evidense against it. The only extra evidense that occured during the trail was witness testimony and cross examinations. The witnesses stated the same things in their depositions. Your just demonizing a judge for disagreeing with you.
To dramatize the immediate increase in the price of e-books that the Publishers could achieve under the Apple agency agreement, and to assure each Publisher Defendant that it was being treated no differently than its competitors, Moerer sent a table of proposed book prices to them in identical e-mails on The Draft Agreement capped e-book prices at $12.99 for New Release titles with hardcover list prices of $30 or under, and set a $14.99 price tier cap for New Release titles with hardcover list prices above $30, with incremental price tier increases for every $5 increase in the hardcover list price above $30. For books other than New Releases, the price cap was set at $9.99. The January 4 term sheet had set a price cap at $14.99 for any book with a hardcover list price above $35, and $12.99 for any hardcover book listed below $35. The Draft Agreement, by contrast, set the demarcation between $12.99 and $14.99 at $30, allowing for higher e-book prices in relation to a title’s hardcover list price. the same day Apple sent out the Draft Agreements. The table showed fiction NYT Bestsellers from every member of the Big Six. It listed the book’s title, author, and publisher. It showed each title’s hardcover list price, followed by its retail prices when sold as an Amazon hardcover book; Amazon e-book; Barnes & Noble e-book; and finally, as a proposed iTunes e-book. The proposed prices under the iTunes column were always either $12.99 or $14.99, and were always several dollars higher than the then-existing e-book price at Amazon and Barnes & Noble. In some cases, the iTunes e-book price was even higher than the Amazon hardcover price.31 Sensitive to the fact that the table looked like an Apple retail price list, Moerer clarified in a follow-up email to Shanks that the prices in the table’s final column designating the “iTunes eBook Retail Price” are the “top price tier we’ve proposed” and that “[i]n the agency model, Penguin would set retail prices at its sole discretion, at this price or any lower price, with Apple acting as your agent.” While the final column would only display Apple’s e-book prices for titles published by the particular Publisher receiving that version of the table, the layout made it easy for the Publishers to see that they were all being treated identically
You disagreed with a claim that Apple was only setting a *maximum* price by posting a long quote that boiled down to: "[i]n the agency model, Penguin would set retail prices at its sole discretion, at this price or any lower price." Umm, yeah. Each individual publisher got to set its own price, with Apple saying "If you want us to sell your books, they can't cost more than X. And if you give someone else a deal, you agree to give us the same deal." In no way does that drive up the price of ebooks with the exception that it stopped Amazon from selling at a loss (illegal dumping that was screwing with the market).
I'm normally the first up for Apple bashing but I actually find myself defending Apple in this case.
I think Apple would have to do more than some back-room deals to ensure that it's "absolutely impossible" for other resellers to sell their books cheaper than Apple. You'd need a pretty potent police state to effectively block the act of creating and selling a book for a low price.
If Apple and several big publishers want to form a cartel then let them. Higher than necessary book prices will be an incentive for small/new publishers to enter the space and bring books to people at lower prices. If an author is unhappy with their publisher, they'll publish new books with a better company.
Sueing Apple for price fixing is, in my opinion, unethical.
The whole issue is largely moot anyway. Many of the most popular books can be downloaded for free with a very low probability of legal reprecussions.