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Supreme Court Rejects Apple eBooks Price-Fixing Appeal (reuters.com)

chasm22 writes: The Supreme Court on Monday declined to hear Apple Inc's challenge to an appellate court decision that it conspired with five publishers to increase e-book prices, meaning it will have to pay $450 million as part of a settlement. The court's decision not to hear the case leaves in place a June 2015 ruling by the New York-based 2nd U.S. Circuit Court of Appeals that found Apple liable for engaging in a conspiracy that violated federal antitrust laws. Apple, in asking the high court to hear the case, said the June appeals court decision that the company had conspired with the publishers contradicted Supreme Court precedent and would "chill innovation and risk-taking." The 2nd Circuit's ruling followed a 2013 decision by U.S. District Judge Denise Cote that Apple played a "central role" in a conspiracy with publishers to raise e-book prices. The Justice Department said the scheme caused some e-book prices to rise to $12.99 or $14.99 from the $9.99 price previously charged by market leader Amazon.com Inc. "Apple liability for knowingly conspiring with book publishers to raise the prices of e-books is settled once and for all," said Bill Baer, head of the U.S. Justice Department's antitrust division.
Perhaps Congress should change the price fixing laws... What about Amazon? Just trying to anticipate the response from Apple.

84 comments

  1. Anyone know how the voting went? by rsilvergun · · Score: 3, Interesting

    I'm wondering if Scalia's death caused them to lose. Apple was probably counting on his vote when they first agreed to pursue the litigation instead of settling for $70 mil. It's amazing how much of affect SCOTUS has. Probably too much...

    --
    Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
    1. Re:Anyone know how the voting went? by Etherwalk · · Score: 5, Informative

      I'm wondering if Scalia's death caused them to lose. Apple was probably counting on his vote when they first agreed to pursue the litigation instead of settling for $70 mil. It's amazing how much of affect SCOTUS has. Probably too much...

      No. It take four justices to agree to hear a case, which means that if Justice's Scalia's death made a difference in terms of whether they would hear the case, then they would have only had four justices on their side and would not have been able to win at the Supreme Court anyway.

      Realistically, the Supreme Court very rarely takes cases to begin with. Big name parties like Apple makes them more likely to be heard, because the justices may be more interested and they will hire good experts to write the briefs and get amici on-board and the like, but it is still very unlikely. But complicated cases like in-depth patent or anti-trust cases are usually bad cases for making new case law, and they take up a lot of time, so the Supreme Court usually doesn't hear them anyway.

    2. Re: Anyone know how the voting went? by Anonymous Coward · · Score: 0

      The last big trust/patent case that reached SCOTUS was the Spider-man one. I recall their opinions, concurrences and dissents featuring phrases like "superpowered patent law" "doesn't need a superhero" and the like. An answer to the age old question: Do lawyers, in fact, posses a sense of humor? The answer being yes, just obscure and possibly only in SCOTUS judges.

    3. Re:Anyone know how the voting went? by goombah99 · · Score: 1

      Justices never change their minds? then why do they even present the case. Just let them decide.

      --
      Some drink at the fountain of knowledge. Others just gargle.
    4. Re:Anyone know how the voting went? by vilanye · · Score: 1

      I don't think it is a given if a justice agrees to hear a case, he/she will vote on the side that is bringing the case to SCOTUS.

    5. Re:Anyone know how the voting went? by Etherwalk · · Score: 1

      It's not a given, but there is a reasonably high liklihood that if someone would vote on the side of the petitioner *and* thinks a majority of the court would also side with petitioner, then they would vote to approve the petition--so Scalia's absence is very unlikely to have made the difference. I'll grant it's not an absolute, though--sometimes they would side with petitioner if the case came before them, but don't think the case is important enough to spend their time on.

    6. Re:Anyone know how the voting went? by Etherwalk · · Score: 2

      Justices never change their minds? then why do they even present the case. Just let them decide.

      They do. Rarely. But let us pretend for a moment that we are not programmers who look for the exception to every rule.

      It is a rare enough occurrence that when the Supreme Court votes in their first round, there is no discussion--they just go around the table saying how they are going to come out, IIRC in order of seniority, and the Chief Justice assigns the opinions. There can be some changed minds during opinion drafting.

    7. Re:Anyone know how the voting went? by Rob+Lister · · Score: 1

      Just posting to correct an errant mod

    8. Re:Anyone know how the voting went? by Robotech_Master · · Score: 2

      No one will ever know "how the voting went." SCOTUS doesn't elaborate on its certiorari decisions. All we know is that they couldn't scrape together four judges who were interested enough to want to hear it.

      Taking a wild-assed guess, the reason for this is probably that it was basically a bog-standard antitrust case, with no new and interesting issues for the court to resolve, and no obvious mistakes made by a lower court for SCOTUS to resolve. (Apple and its advocates threw up a lot of fuss, but every antitrust defendant thinks they're a special case—and it usually turns out that they aren't.) The Court has better uses for its time than rehashing decisions the lower courts got right.

      --
      Editor Emeritus and Senior Writer, TeleRead.org
  2. What price-fixing laws? by Etherwalk · · Score: 5, Informative

    Perhaps Congress should change the price fixing laws...

    There aren't really "price-fixing laws." The Sherman Anti-Trust act prohibits "restraint of trade," which is written by Congress to allow courts to develop antitrust law however they want. Technically every contract made could be "restraint of trade," but the courts generally only apply it to certain pretty explicit anti-competitive behavior, such as explicit price-fixing with competitors. You are still allowed to do other things which discourage competition, like integrating vertically within an industry.

  3. Maybe now ebooks will be cheaper then paper? by dczyz · · Score: 5, Interesting

    That would be a nice change. Its the biggest reason why I dont really read many ebooks. I can get the paperback version much - much cheaper then the ebook version.

    1. Re:Maybe now ebooks will be cheaper then paper? by 110010001000 · · Score: 4, Funny

      I know where you can get e-books for $0.

    2. Re:Maybe now ebooks will be cheaper then paper? by Anonymous Coward · · Score: 1

      Agreed. Once you purchase something with your hard-earned money it should be "yours". You determine if you want to keep it forever or bequeath it to another. The e-books are higher priced and you have no control of it beyond the initial purchase. There is a reason that my Kindle (and my Ipad) have very few books on them...

    3. Re:Maybe now ebooks will be cheaper then paper? by squiggleslash · · Score: 2

      The funny thing is there is some price differentiation with eBooks, I'm not sure why. I think for the most part the price fixing thing concerned some top titles.

      I'm surprised nobody's noticed that movies seem to cost exactly the same price from Google, Amazon, and Vudu. (Presumably Apple too, but I don't ever check Apple.)

      --
      You are not alone. This is not normal. None of this is normal.
    4. Re: Maybe now ebooks will be cheaper then paper? by Anonymous Coward · · Score: 0

      But still $1.and-change at a Red Box! I agree with your statement, by the way, which is why I still own a DVD player and go to red box for new/semi-new releases.

    5. Re:Maybe now ebooks will be cheaper then paper? by Jack+Griffin · · Score: 1

      Agreed. Once you purchase something with your hard-earned money it should be "yours". You determine if you want to keep it forever or bequeath it to another.

      Including slaves? (that was a joke BTW...)

    6. Re:Maybe now ebooks will be cheaper then paper? by KGIII · · Score: 2

      You're not purchasing it. You're licensing it. Hopefully you can find someone to sell it to you (not license it to you) at a price you and they can agree on. Note the difference in verbiage. That's essential and important to understand.

      When you "buy" a track at iTunes then you're not buying it, you're licensing it. Your OS is probably licensed and not purchased. Even in Linux that is somewhat true. I do not own the code on my computer. If I did own it then I could close it up.

      Now, please don't hate me for bringing you this news. I am not the person in charge. I am not the boss. That's just how it works and I would like to see it done differently, at least to some extent.

      You don't buy a book. Even before, you didn't buy the contents of the book. You paid for the book. You never had ownership of the content. You had a license to use the content. You were free to trade or sell the contents. I suspect that one could transfer ownership of the device the e-books are loaded onto and win that battle in court. You can, almost certainly, loan it - irrespective of the EULA terminology.

      But, even with a book, you've never owned it. If you did own it (it'd be a work-for-hire) then you'd be able to make as many copies of it as you want AND sell those copies. You were, even back in the day, licensing the content. Back on dead-tree, you owned the medium but licensed the content and I'm going to guess (I don't think it has been tried) that e-book readers have the same rights. In other words, you can probably transfer ownership of the device - including loaning it. If they change their username and whatnot, that's not really the same device.

      Wow, that's clear as mud. I hope you can parse it better than I can write it. However, the important thing to realize is that you're licensing and not buying. You can make of that what you will but those are factual statements and are upheld by the highest courts in the land.

      Again - I'm not saying that I agree with this situation, it's just that that's how the situation is. Most things are like a pendulum. At some point, it swings back. I have no idea how much more trouble they'll add on top of the current regulations/system before that pendulum swings back.

      --
      "So long and thanks for all the fish."
    7. Re: Maybe now ebooks will be cheaper then paper? by Anonymous Coward · · Score: 0

      You know that redbox has blu-rays, too. If you don't care about "owning" then what does it matter whether the rental media have DRM or not?

    8. Re:Maybe now ebooks will be cheaper then paper? by Anonymous Coward · · Score: 0

      Wrong. I can burn a cd of my iTunes and keep as long as optical media lasts, then burn another copy. Approx every 40 years I need new. Distinguish this from ownership.

    9. Re:Maybe now ebooks will be cheaper then paper? by cpt+kangarooski · · Score: 2

      Back on dead-tree, you owned the medium but licensed the content

      No, you're wrong.

      The way it works is that copies (i.e. tangible media in which a work can be fixed, such as paperbacks, hard drives, or flash memory) are ordinary personal property. Creative works (i.e. intangible stories or pictures, separate from the media that contain them) are not any kind of property at all. And in order to create an approximation of what it would be like if creative works were even capable of being property, we may grant copyrights pertaining to those works, which limit what people can do with them or copies containing them. However, copyrights are really quite limited themselves, and only prohibit a few (admittedly desirable) things that can be done with works or copies thereof. Mostly they prohibit people from fixing the works into more copies, from distributing copies containing the works, from preparing new works derived from preexisting works, and from publicly performing or displaying certain works.

      The other important thing to understand is that a license is fundamentally just a promise not to sue someone. If Alice and Bob are neighbors, Alice doesn't need a license from Bob in order to go into her own home, eat her own food for dinner, and sleep in her own bed. However, Alice needs some form of permission from Bob (or an applicable exception) to go into Bob's home, eat Bob's food, or sleep in Bob's bed.

      So the way this all works is, copyright does not apply to the mere ownership of a work or a copy, or to the mere use of a work or a copy. If you legitimately own a copy of a work (i.e. the paperback), the copyright does not prohibit you from owning it just because it has a work in it, and does not prohibit you from using that work, e.g. by reading it. Since the copyright holder can't stop you, he has no ability to grant you a license; he might as well grant you a license to breathe air.

      This doesn't mean that you own the copyright. Nor does it mean that you own the work, since no one can own that. It just means that owning a copy automatically brought along the right to read that copy more as a consequence of personal property law and the right of free speech.

      If you wanted to make a new copy, however, that would infringe on the copyright, if there is one. Ownership of a copy does not automatically confer the copyright.

      The basis for claiming that e-books are licensed really has to do with a way in which they are unlike printed books. Basically, it's that in order to get one, you have to download it, which involves fixing it into some storage medium, and therefore making a new copy, which is something that copyright does prohibit, and therefore requires a license or exception in the law. OTOH, if you went to the bookstore and could buy a pre-written flash card with the book on it, and slot that into your reader, you wouldn't need a license, and it would work fine as a simple sale transaction.

      The idea of end-user licensing really didn't start at all until the late 1970's with software, and it has been totally unnecessary there for over 30 years. But it's quite favorable for the developers and publishers, so they keep pushing that model and sadly it's spreading.

      --
      -- 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.
    10. Re:Maybe now ebooks will be cheaper then paper? by Mark+Shewmaker · · Score: 1

      You're not purchasing it. You're licensing it. Hopefully you can find someone to sell it to you (not license it to you) at a price you and they can agree on. Note the difference in verbiage. That's essential and important to understand.

      The US Supreme Court already heard a case where a publisher made that same claim, with the publisher even putting a note in the front of their book saying that it was licensed and not sold. The US Supreme court ruled that that claim was invalid, and the the book *was* sold, with the purchaser being able to do what he wanted with it, hence the "First Sale Doctrine" that we have today, (afterwards codified into US copyright law.)

      I don't see where there's any difference when the book is printed using a new and improved paper that will last longer, or if it's a magazine that's being sold, or if it's an electronic document.

      I see a claim by publishers saying that we can't resell electronic documents the same way I see claims by printer manufacturers that their printers work best with paper made by the same manufacturer--complete marketing nonsense (read lies) designed to fool us into over-purchases of their products.

    11. Re:Maybe now ebooks will be cheaper then paper? by Robotech_Master · · Score: 2

      No, they won't. Really, this case isn't going to change much of anything; it's been so long since the original circuit decision that the clock ran out on the cooling-off period and publishers were allowed to renegotiate their contracts. After some long and arduous negotiations (perhaps you remember hearing about the big Amazon/Hachette feud a year or so back?) they reimposed agency pricing, legally this time.

      Don't expect Big Pub to lower its e-book prices any, either. They're still too intent on trying to strangle the e-book market in its crib, for the sake of protecting the remaining paper bookstores.

      --
      Editor Emeritus and Senior Writer, TeleRead.org
    12. Re:Maybe now ebooks will be cheaper then paper? by Anonymous Coward · · Score: 0

      https://www.gutenberg.org/wiki/Main_Page

  4. Consumer refunds? by Anonymous Coward · · Score: 1

    Any how much of this will trickle down to the people whom bought books from Apple while prices were being fixed?

    Is it too much to dream that consumers who are victims of corporate mis-understandings of the law to be refunded for what should not have been charged for every purchase? In this universe, on this planet, at this time... sadly yes it is to much to ask for all ill gotten gains to be un-gained.

    1. Re:Consumer refunds? by Robotech_Master · · Score: 1

      Given that the publisher settlement was a bit less than half as big as Apple's, expect to get back a little over twice the amount you got back from the publisher settlement. It depends how many e-books you bought. I got like $15 or so last time around, I think.

      --
      Editor Emeritus and Senior Writer, TeleRead.org
  5. Not very Green of you by Anonymous Coward · · Score: 0

    1) a tree died to make the book
    2) fuel was used to transport the tree to the paper mill
    3) electricity was used to pulp the paper
    4) more electricity used to print and bind the book
    5) fuel used to transport the book to the store
    6) more fuel used to go get the book from the store

    that is *really* selfish of you and all for a few extra bucks

    1. Re:Not very Green of you by Anonymous Coward · · Score: 0

      a child slave made that ebook
      a child slave dug the battery components
      enjoy your epeen

    2. Re:Not very Green of you by sexconker · · Score: 1

      On the other hand, the physical book will outlast the kindle and digital account and digital "license" to the content, probably be a century or so, maybe for millennia.
      How many trees are killed and shit pumped into the environment to produce 1 Kindle? How many physical books can you get for that cost?

      Weigh those books and their lifetime against the books a typical Kindle device and the "licenses" you get.

    3. Re:Not very Green of you by Plus1Entropy · · Score: 1

      1) a tree died to make the book

      Trees used for paper are a renewable resource. They are grown in plantations for the specific purpose of being made into paper. No one is cutting down forests to make books.

      --
      Only crack the nuts that crack. You don't put the ones that don't crack in the sack.
    4. Re: Not very Green of you by Anonymous Coward · · Score: 0

      Slave children are fully biodegradable.

  6. *Once and for all* What a fantastic concept! by fustakrakich · · Score: 1

    It's just like *Happily ever after*

    --
    “He’s not deformed, he’s just drunk!”
  7. Yet another reason not to do business with Apple by jbn-o · · Score: 3, Interesting

    Apple makes so much money yet has such an ugly history of mistreating the people with whom they do business in a variety of ways large and small: Mistreatment of workers who build their products (continuing in 2015 only changing due to activist and journalists compelling them to), copyright infringement, ebooks that won't work on jailbroken iThings, turning a blind eye to environmental degradation, making it needlessly hard for owners to take apart their products, teaching store staff twisted psychological manipulation, avoiding US corporate tax (which is already quite low), and more. Now we can add conspiring to fix prices. Hardly surprising given how unethical, illegal, and pernicious Apple has been.

  8. Apple did this for a reason. by tlambert · · Score: 2, Interesting

    Apple did this for a reason. It's not the reason people are claiming.

    The problem is that the text to speech that's disabled by the DRM on eBooks means that blind people can't read eBooks. Or of they get an audio book for an eBook, it always comes a lot later, and at a much higher price, if at all.

    There's no reason for this, but in order to get the DRM removed, they kind of need to be able to cut the same kind of deal with the eBook publishers that they cut with the music labels to get the DRM the hell off of music.

    What this is about is that Amazon, Barnes and Noble, and the now-defunct Borders, make a large amount of money on the margins on the audio books. Mostly on the backs of people who listen to them while they drive or exercise -- or on the backs of the disabled.

    1. Re:Apple did this for a reason. by Anonymous Coward · · Score: 0

      Citation needed!

    2. Re:Apple did this for a reason. by bws111 · · Score: 3, Informative

      Ha ha! Good one! Apple did it so they didn't have to compete on price, and for no other reason.

    3. Re:Apple did this for a reason. by Anonymous Coward · · Score: 0

      If theres DRM on ebooks then blame the publishers for it being on there, not amazon, borders, barnes and noble etc. Trying to make it sound like the other stores are screwing disabled people is WEAK.

      Fact is what apple did raised the price of ebooks for everyone including audio ebooks. By letting market forces run, stores can compete on price on audio ebooks and bring down their prices for disabled people. What apple did screwed over everyone including the disabled.

    4. Re:Apple did this for a reason. by tlambert · · Score: 1

      If theres DRM on ebooks then blame the publishers for it being on there, not amazon, borders, barnes and noble etc. Trying to make it sound like the other stores are screwing disabled people is WEAK.

      The problem is that the other distributors failed to band together with each other in order to assert collective bargaining against DRM in eBooks in the first place.

      As long as there was one distribution channel where it was possible for them to distribute the book with DRM, any distribution channel that decided that it would not distribute DRM'ed eBooks, got screwed by not being able to distribute ANY eBooks: the publishers could force DRM on the one because the others would not stand with them against DRM.

      If, on the other hand, there was a strong economic interest that the publishers had to "play ball", then the distributors could dictate terms to the publishers.

      Terms like "No DRM!".

      This whole thing blew up in the first place because the publishers realized that this is what was coming down the road, and were fearful of it. The other distributors became fearful of it at the same time, mostly because the publishers told them that it would threaten their margins on the audio books. Instant firestorm controversy. Boom!

    5. Re:Apple did this for a reason. by cpt+kangarooski · · Score: 1

      Nonsense. Apple doesn't give a crap about ebooks. They did it because they were worried about the Kindle harming iPad sales. The rest follows from that.

      --
      -- 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.
    6. Re:Apple did this for a reason. by Solandri · · Score: 1

      Oh please. Apple started doing this in 2009 - before the iPad was even released. They didn't even know if their ebook reader was going to be a success. They did this for one and only one reason - to ingratiate themselves with the publishers so the publishers would line up to provide iPad versions of their books and magazines so it would have a large library for people to buy when released.. As a side effect, once the publishers were making the "best" version of their publications for the iPad, the fixed price industry-wide meant that all other ebook readers and tablets would be at a competitive disadvantage against the iPad version. You could get the "good" version on the iPad, or pay the exact same price for an inferior version on any other device.

  9. Re:CHICKENSHIT MODERATOR ABUSING POWER by Anonymous Coward · · Score: 0

    Mod-martyrs always deserve their downmods. No exceptions.

  10. Re:Yet another reason not to do business with Appl by Anonymous Coward · · Score: 0

    Much good as Richard has done in bringing the world emacs and being one of the most prominent and effective advocates for free software, one thing you can not accuse Richard Stallman of is being unbiased , balanced and fair in his critique.

    Most of what you site is either directly from Richard's site, or merely quoting it. Some, not all of this has been widely discredited, or the headlines are contradicted by the very articles that are cited.

    So taking factory conditions from one of the articles you cite, as an example :

    "This is very far from being only Apple's problem, of course. Foxconn manufactures parts for just about every other consumer tech firm too (the company's most recent corporate social responsibility report from 2010 cites 935,000 employees, so it is enormous), including HP, Sony-Ericsson, Amazon and Dell. It makes the Kindle and Wii as well as iPhones and iPads, and until recently made Xbox consoles."

    Does any one of those other manufacturers provide a supplier responsibility report that is comparable in detail to what Apple provides, and your activists and journalists quote from ?

    Now it depends on your accusations is around the existance of the issues versus relative uniqueness of the issues with respect to Apple. If you drill down on it, they have their good points, and bad points, but they are better than many of their competitors on many of the issues you cite by a significant margin.

    There is ugliness in all large organisations. Why ? Because if you put enough people in a room, there will be a fair chunk of arsehats.

  11. Um no by goombah99 · · Score: 1

    I don't understand how Apple fixed prices. It's not like two different book makers sell the same book. Apple just let the book owner set the price. Amazon dictates prices. Just because they sell for lower now is no indication they will sell lower later. One can see how they used their marketplace power to cow some publishers into selling at a lower price. This can be used for good or evil. It's not the same as competition which is what the apple model used.

    --
    Some drink at the fountain of knowledge. Others just gargle.
    1. Re:Um no by bws111 · · Score: 5, Informative

      Amazon does not dictate price. Amazons buys books from the publisher and resells them for whatever price Amazon wants. They can buy a book for $5 and sell it for $10, or they can buy it or $5 and sell it for $2. And all of their competitors can sell books for whatever price the competitors want. The pressure Amazon can exert is on the publishers, to get the best price. But the competitors are still free to set their own prices, even if it may be painful to compete with Amazon.

      Of course, this model is intolerable to Apple. There is no shiny to be sold with an ebook. A book purchased from Amazon is indistinguishable from one purchased from Apple! The only way for Apple to compete would be on price! The horror!

      So, what Apple did was go to the publishers and get them to change to the agency model. No longer would the publishers sell to the retailers with the retailers setting their own prices. The PUBLISHER would set the price to the CONSUMER, and the retailer would get a cut of that. Apple would get its 30%. So far, no real problem. Here is where the problem occurs - Apple made deals with the publishers that NOBODY could SELL a book for less than Apples price. Even if a competitor was willing to take a smaller cut the price to the consumer could not fall, the publisher just kept more. Prices were, wait for it, fixed.

    2. Re:Um no by gumbi+west · · Score: 1

      That's called a most favored nation contract and I thought it was pretty typical. The USG demands it in several arenas.

    3. Re:Um no by Anonymous Coward · · Score: 0

      Apple let the book owner set the price, as you say. That's resale price maintenance, which is illegal in most jurisdictions since it is considered to be bad for the consumer. Once I buy something, it's mine and I should be able to sell it for whatever price I like, including for a loss. You shouldn't be able to tell me what I can sell it for. You may observe that Apple seems to be able to do this with their hardware in many countries. I will leave as a matter for the reader to decide whether this practice is legal where they live, and how Apple manage to get away with it.

    4. Re:Um no by bws111 · · Score: 4, Insightful

      It is pretty typical to have a MFN clause for things you BUY. This tends to lower prices. Apple arranged for MFN on things it and its competitors SOLD. This raises prices because it is IMPOSSIBLE, not merely painful, for anyone to compete on price.

    5. Re:Um no by gumbi+west · · Score: 1

      I don't understand. In a deal there is always a buyer and a seller.

    6. Re:Um no by bws111 · · Score: 2

      In a normal MFN deal between Apple and a publisher, the only two parties affected by the deal are Apple and the publisher. In this scheme, Apples MFN contract controlled the price that a consumer had to pay Amazon to buy a book, even though neither one of them was party to the contract.

    7. Re:Um no by Anonymous Coward · · Score: 0

      Case wasn't about the MFN contract so much as the coordination between the publishers and Apple to raise prices. Evidence was presented showing the publishers were meeting together and discussing prices. It isn't legal for competitors who represent 80% of the best seller market to do that. The case hinged on if there was enough evidence that Apple was aware of these meetings. It would be a weird case for SCOTUS to take as it would have no effect on future cases.

    8. Re:Um no by Anubis+IV · · Score: 1

      I agree with your assessment that Apple engaged in price-fixing (which, admittedly, contradicts some of my earlier stances on this subject, including ones I've posted here), but I wanted to touch on one point you glossed over.

      The pressure Amazon can exert is on the publishers, to get the best price.

      Antitrust laws are designed to cover and protect both the consumer and the producer. When there's a single seller of a good, we call it a monopoly, and we all have a quick reaction against that situation, since it immediately affects our ability to purchase goods at fair prices. When there's a single buyer of a good, we call it a monopsony, but we as consumers tend to not be quick to protest monopsonies, since the prices we end up seeing are quite often artificially deflated by the situation. That said, the end result is an unsustainable business for the producers, which eventually leads to long-term harm for everyone as the producers go under, with the monopsonistic business quite often sucking up the remains for itself, leaving it with a monopoly at that point.

      As you said, Amazon was able to exert pressure on the publishers, and not just a little pressure, but a lot, since they controlled over 90% of the market at the time that Apple entered. They were using their monopsonistic position to push the publishers into giving them better and better prices, to the point that the publishers were very quickly reaching the point of unsustainability. Meanwhile, Amazon was setting up its own self-publishing tools and ways for authors to deliver content directly to readers without going through the publishers. Amazon was leveraging their dominant position to try and force the publishers out of business so that they could become the publisher. They were using their monopsony to try and become a monopoly.

      At the end of the day, I can't say I feel too sorry for the publishers, given that they're dinosaurs in a modern era, but at the same time, I can't condone what Amazon was doing either. And while Apple was in the wrong legally speaking, I do think that the changes they helped bring about were for the betterment of the industry in the end.

      This whole situation just leaves a bitter taste in my mouth.

    9. Re:Um no by bws111 · · Score: 1

      Read the court documents. While Amazon may have WANTED the publishers to sell to them at a lower price, the publishers REFUSED to do so. The beef the publishers had with Amazon was that Amazon's ebook prices made it harder for the publishers to sell HARDCOVER books. Well, so what? What 'right' do the publishers have to sell a desired quantity of hardcover books? Amazon did not get people to switch to ebooks by doing something illegal or shady, they did it by offering a better product. Nothing wrong with that at all.

      Anti-trust laws have nothing to do with protecting someones desired business model, they are not primarily about consumers, and they have nothing to do with protecting producers. They are there to ensure that competition can exist (not that it DOES exist, just that it CAN). Amazon did nothing to ensure competition could not exist. It may be HARD to compete with Amazon, but it is not impossible. What Apple did was to ensure that there was no possibility of competition.

    10. Re:Um no by Anubis+IV · · Score: 1

      While Amazon may have WANTED the publishers to sell to them at a lower price, the publishers REFUSED to do so.

      Once they began colluding with Apple, yes. I was speaking of prior to that.

      And I do agree with you that antitrust laws have nothing to do with protecting a business model. That said, just as Microsoft got slapped for using its dominance in the OS selling business to push its browser, so too do I believe that Amazon should have been slapped for using its dominance in the ebook buying business to push its publishing business that was in direct competition with the publishers it was buying from. It was using its dominance in one business to force its way into another business entirely by pushing its competitors into unsustainable positions. That's at the core of what antitrust laws are designed to prevent.

    11. Re:Um no by bws111 · · Score: 1

      Again I say, READ THE DOCUMENTS. The only reason the publishers met with Apple at all was because they hated Amazon's $9.99 price for ebooks, because it was a threat to their hardcover sales. That 'threat' is called competition. Far from LOWERING the price to Amazon, they RAISED the price above $9.99 in an effort to force Amazon to raise prices, which they did not do. This was BEFORE they ever talked to Apple.

      Microsoft did NOT get in trouble for using its dominance in OS to push its browser. It got in trouble for anti-competitive behavior when it had a dominance in one area (OS) to gain dominance in another (browser). In the MS case, the anti-competitive behavior included things like changing the Windows APIs and not telling the competitors until after MS had a head start on its browser, using undocumented APIs to improve the performance of their browser while withholding that info from the competitors, etc. MS totally controlled the fate of their competitors.

      Amazon being a seller AND a publisher is in no way an anti-trust violation, unless there is some anti-competitive behavior. 'Hey authors, let Amazon do your publishing, we will give you a better deal' is COMPETITIVE. The other publishers are free to sweeten their deals, Amazon is not in control. If all the authors leave their publishers, tough. They have been out-competed. 'Hey authors, unless you let Amazon publish, your books will not be sold in the worlds largest bookstore' is ANTICOMPETITIVE. The other publishers can do NOTHING to counter that. THAT is illegal.

      Putting your competitors in unsustainable positions is most certainly NOT what anti-trust laws are about. That is just competition. Putting competitors in positions where you have CONTROL of the competitor is what anti-trust laws are about. Amazon has done nothing to suggest they are in control of their competitors.

    12. Re:Um no by gumbi+west · · Score: 1

      All MFN contracts affect everyone who trades. That's what's great/awful about MFN contracts.

      Example: the company that made the lead additive for gas added a MFN clause to all of it's contracts--looks like it's screwing itself, right? But no, then when someone tries to negotiate a lower price they say, "we would be we have all of these MFN contracts out there, you're stuck at the asking price."

    13. Re:Um no by bws111 · · Score: 1

      You are still not getting it. In the example you gave, everyone who purchased that additive was able to set their OWN price when selling the gas to their customers. Some retailers may have marked up the price of the additive 30%, some 50%, some 10%. The MFN contracts did not control what the retailers could do. Regardless of whether or not the retailers all paid the same price they could COMPETE with each other on price.

      The Apple MFN contract did not do that. The Apple MFN contract fixed the price at which ALL retailers could SELL their goods, not the price at which they could BUY them. The retailers no longer had control of their own businesses, that control had been taken away by a contract they were not even a party to. That contract ELIMINATED the possibility of any price competition.

  12. What about Amazon? by Anonymous Coward · · Score: 0

    Amazon cannot fix ebook prices. Other sellers, publishers are free to sell at the price that they want. People will buy where they get the ebooks that they want at the best prices. Yes, Amazon has a big head start on the others, but they are not a monopoly, nor are they colluding with other sellers to fix prices.

    All of that having been said, publishers are keeping ebook prices higher than they should be, considering that they are as high if not higher in many cases than the mass-market paperback price, yet cost much, much, much less to produce per copy!

  13. Does SCOTUS vote to hear cases by Anonymous Coward · · Score: 0

    Or do they just need one or two justices to agree to hear the case?

    1. Re:Does SCOTUS vote to hear cases by gumbi+west · · Score: 1

      When there are 9 justices they need 4 to vote for it. I don't know about when there are 8.

  14. Can we just let the market work? by trout007 · · Score: 4, Funny

    Reminds me of the Walter Block joke.

    There are three prisoners in the U.S. They were all in jail for economic crimes of violating monopoly laws. First guy said that he charged higher prices than anyone else and the government then accused him of price gouging and profiteering. Second guy charged lower prices than anyone else and they accused him of predatory and cutthroat pricing. And the third guy said that he charged the same prices as everyone else and they accused him of collusion and price fixing.

    --
    I love Jesus, except for his foreign policy.
    1. Re:Can we just let the market work? by gumbi+west · · Score: 1

      The only one I know of that people get in trouble for is the third one and the standard is that there has to be evidence that there was communication along the lines of, "hey, let's jack up the price of A to $B."

      In this case Apple had written communication about the deals it was cutting.

    2. Re:Can we just let the market work? by Anonymous Coward · · Score: 0

      The second guy could also get into trouble if he raised his prices once his competitors went out of business.

    3. Re:Can we just let the market work? by Anonymous Coward · · Score: 1

      Copyright prevents the formation of a free market. The holder has every legal right to set the price to whatever they want. It's difficult to introduce market effects to an industry where products are both unique, but easily reproduceable.

    4. Re:Can we just let the market work? by Anonymous Coward · · Score: 0

      It's difficult to introduce market effects to an industry where products are both unique, but easily reproduceable.

      Not true, it is only difficult to introduce market effects to such an industry when we start with the assertion that the producers deserve to get paid well above marginal rates.

    5. Re:Can we just let the market work? by Anonymous Coward · · Score: 0

      I know people who've been pulled over for driving too slow, people who've been pulled over for driving too fast and someone who was pulled over for driving the speed limit. If you're smart you'll realize the circumstances of each were very different. If you're not smart, you'll think there's a problem with monopoly laws.

  15. Re:CHICKENSHIT MODERATOR ABUSING POWER by KGIII · · Score: 3, Insightful

    A couple of things...

    I do not moderate -- ever. Even though I can, I do not. I have my reasons.
    Moderators can moderate however they see fit. You do not get to tell them how to spend their points.
    Get an account if you don't want to be rate-limited.
    While they both are about Apple, your comment is off-topic, at best. Trolling at worst. You were +1 at the time, that's overrated.

    I do notice a trend. You seem to think others are obligated to behave in a manner that suits you - without regards for others feel on the subject. You seem to think you've got both power and insight. You seem to have an ego larger than its worth. You don't get to decide how someone moderates your post. You don't get to pick how often you're allowed to post. You don't get to change the subject to what you want to discuss as opposed to the topic.

    In short, you're basically saying, "Don't tell me what to do." While, at the same time, saying, "Do what I say." Whatever makes you think you're entitled to be given consideration? I can assure you, you're not special nor are you in charge. You're a guest on someone else's hardware, act like it.

    Well, act like it if you want to be heard. Just get a damned account if you want your posts seen.

    --
    "So long and thanks for all the fish."
  16. Re:Yet another reason not to do business with Appl by jbn-o · · Score: 2

    Yes, the list of why not to do business with Apple comes from Richard Stallman's personal site stallman.org. There are other articles there too like why not to do business with Amazon, and an updated list of other pointers to political stories.

    As to your question: it seems you failed to see that the /. story headline comment already predicted the sycophantic distraction of trying to dilute responsibility with 'what about other manufacturers' excuses. Other manufacturers aren't responsible for Apple's choices, Apple is.

  17. BTW... by tlambert · · Score: 1

    BTW... if you don't think that, for example, Amazon, would be perfectly happy to load other people's eBooks on the Kindle, and then make them look not as nicely formatted as the ones you buy from Amazon, if that meant selling a Kindle, and enabling future Amazon sales as a result -- think again.

    And don't think that B&N wouldn't do exactly the same thing to a Nook: it's more important to them that your library be portable *to* a Nook, than it is that they themselves might accident have book sales that were displayed on a Kindle instead of a Nook.

    Where Amazon and B&N agree however, is this: Apple is better at presentation graphics than either of them, and so they might not be able to sell their readers any more. The readers (at present, thanks to DRM) are all about having a loss leader that then results in future book sales (which they might or might not get anyway, if they were DRM free), but the DRM means that once you commit to a vendor, you commit to their ecosystem. It's about customer lock-in.

    Their worst nightmare may well be people buying books from them, and deciding to read them on their iPad (which they can do with Apps from both companies anyway), and then having to compete on book price, which is a race to lower margins, if someone decides to hold a price war.

    Apple isn't the danger -- it's not like Apple gives discounts on most things anyway -- it's that Amazon and B&N are afraid of each other for that reason.

    It's a mess which was (somewhat) on its way to being fixed until this case was raised.

  18. Another failure by the court. by jcr · · Score: 2

    The fact is, Apple broke up Amazon's monopoly in that market. The charge was bullshit from the get-go.

    -jcr

    --
    The only title of honor that a tyrant can grant is "Enemy of the State."
    1. Re:Another failure by the court. by Anonymous Coward · · Score: 0

      jcr.MAC@com

      fanboy alert.

    2. Re:Another failure by the court. by Richard_at_work · · Score: 1

      Prior to Apple getting involved, I was buying ebooks from several sources - and had never bought one from Amazon. Today, its Amazon or Apple - and both are more expensive than the old services.

      So no, Apple didn't break Amazons monopoly, they bullied their way into the market and made it so everyone else had to get more expensive - that killed off a lot of smaller providers which were doing fine alongside Amazon.

      Oh, and with Amazon I can read my ebooks on Windows, Linux, OSX, iOS, Android, Windows Phone and other platforms. With Apple, its Apple kit and thats it. So fuck Apple, they deserve this.

    3. Re:Another failure by the court. by Robotech_Master · · Score: 2

      Now let's be fair. Amazon earned its monopoly (or near-monopoly) legitimately. They didn't muscle anyone else out of the market; they built an amazing product—the proverbial "better mousetrap." No one before or since has managed to make buying and downloading e-books as pushbutton-simple as the Kindle. You push a button, you get an e-book on your device—no fiddling around with sideloading or copying files necessary. That moved e-books from being a super-geek early adopter's toy into something Grandma and Grandpa could enjoy.

      The late Justice Antonin Scalia wrote the decision in a landmark antitrust case that explains that companies may legally have monopolies if they earned them fair and square, through their own products or infrastructure—and they can't be compelled to share the fruits of their labor with anyone else.

      But even then, I didn't buy from Amazon myself. As one of those super-geek early adopters, I was a member of Fictionwise's Buywise discount club that let me get some great deals on books. But agency pricing effectively killed that club dead, and then killed Fictionwise itself dead, and Barnes & Noble was nice enough to let me copy most, not all, of the e-books I'd bought and paid for over to its servers. (Thank goodness for Apprentice Alf!) And they weren't the only smaller competitors to get knocked out of the market, either.

      All because Apple wanted to sell e-books for its iPad, but didn't want to have to wrestle in the low-margin dirt with Amazon. I only wish they'd had to suffer a harsher penalty for it in the end.

      --
      Editor Emeritus and Senior Writer, TeleRead.org
    4. Re:Another failure by the court. by Anonymous Coward · · Score: 0

      There's no "somebody else has a monopoly" exemption for price-fixing. It's per se illegal, whatever the goals, whether or not the colluding parties exert monopolistic power, and whether or not it is successful. And this was absolutely textbook price-fixing, down to explicit statements in communications between the conspirators that it would raise prices and that raising prices was a desired end.

      The only "bullshit" in this case is the DoJ was too cowardly, given such a blatantly open-and-shut case, to file criminal charges instead of bringing only a civil suit. There are a bunch of blatantly criminal corporate executives who should be in prison for this.

    5. Re:Another failure by the court. by Robotech_Master · · Score: 1

      It's not that the DoJ was too cowardly to file criminal charges, per se, it's that criminal antitrust charges are usually reserved for when the collusion involved other crimes than just the antitrust violation. For example, out-and-out bribery, bid-rigging, forgery, or other skullduggery. But everything the publishers did would have been legal if Apple hadn't coordinated it, so it only merited a civil penalty.

      --
      Editor Emeritus and Senior Writer, TeleRead.org
    6. Re:Another failure by the court. by Anonymous Coward · · Score: 1

      Amazon was not earning it's monopoly legitimately though - they were consistently selling ebooks below cost. This case brought Amazon's data to light: the wholesale cost of the books they were selling at $9.99 was typically $12.99. That's predatory pricing meant to knock others out of the market (or make it difficult for newcomers to come in). The most ridiculous part was that the courts cited this $9.99 price as the proper market value for ebooks when determining that the "price fixing" had raised prices across the board. But that price was never a real market price to begin with - it was only possible because Amazon was bleeding money subsidizing their books for their predatory pricing scheme.

    7. Re:Another failure by the court. by Anonymous Coward · · Score: 0

      Amazon did not have a monopoly. I purchased all my ebooks and books from B&N during that period. I still purchase my ebooks and books from B&N.

    8. Re:Another failure by the court. by bws111 · · Score: 1

      Selling below cost is not predatory pricing. Predatory pricing is setting the price below cost to force others out of business so that you can RAISE prices in the future. Amazon's low prices may indeed keep competitors out of the business NOW, but that is not in any way illegal, it is just competition. Since there is almost no barrier to entry at all in the ebook retailing business, the moment Amazon tries to raise prices competitors will appear. Since they are effectively prevented from significantly raising prices in the future, predatory pricing can not be claimed.

      Selling below cost happens quite often. Actual predatory pricing is quite rare.

    9. Re:Another failure by the court. by bws111 · · Score: 1

      If someone is willing to buy a book for $9.99, and someone else is willing to sell it for $9.99, then by definition the market price is $9.99. There is no requirement at all that the seller makes money (or even breaks even) on the deal.

    10. Re: Another failure by the court. by Robotech_Master · · Score: 1

      Amazon actually sold very few of its books below cost. Even of the $9.99 titles, most were at or slightly above cost. And all the backlist titles were definitely above cost. Amazon representatives testified to that under oath, and the DoJ investigated them and found no wrongdoing. Amazon wasn't losing money to force competitors out of business; its ebook business was "consistently profitable" overall.

      --
      Editor Emeritus and Senior Writer, TeleRead.org
    11. Re:Another failure by the court. by Anonymous Coward · · Score: 0

      wow

      that's the most disconnect from reality I've seen outside North Korea

      well done

    12. Re:Another failure by the court. by jcr · · Score: 1

      There's no "somebody else has a monopoly" exemption for price-fixing.

      WHAT price-fixing?

      Everyone selling books (or anything else) through any of Apple's online stores sets their own price, and Apple takes a fixed percentage of that price. Apple doesn't set prices at all.

      Apple did nothing wrong, and you're full of shit.

      -jcr

      --
      The only title of honor that a tyrant can grant is "Enemy of the State."
  19. Re:CHICKENSHIT MODERATOR ABUSING POWER by Rob+Lister · · Score: 1, Insightful

    What KGIII said +plus+ don't take it so personally. Especially since you post as a very impersonal Anonymous Coward. Besides, it could be that someone was trying to up-mod you and just down-moded you by accident; it is easy to do given the way the mod selections are arranged in the mod dropdown: underrated is right below overratted, for example. I think they should be rearranged so that all the up mods are at the bottom [or top] and all the down mods are at the top [or bottom]. And once done it can't be easily corrected. When I err that way I usually just say, 'fuck em'.

  20. Re:Yet another reason not to do business with Appl by Anonymous Coward · · Score: 0

    Lol. I picked one of your links at random - the Gizmodo article about what apple teaches it's store staff. "Emotional and psychological manipulation" is a fucking laugh. It's typical sales tactics, like any other retail store. To make it out like Apple is perpetuating some kind of crime against humanity... Well, I simply can't take your outrage seriously.