Beta
×

Welcome to the Slashdot Beta site -- learn more here. Use the link in the footer or click here to return to the Classic version of Slashdot.

Thank you!

Before you choose to head back to the Classic look of the site, we'd appreciate it if you share your thoughts on the Beta; your feedback is what drives our ongoing development.

Beta is different and we value you taking the time to try it out. Please take a look at the changes we've made in Beta and  learn more about it. Thanks for reading, and for making the site better!

EU Targets Apple In Ebook Investigation

timothy posted more than 2 years ago | from the how-many-eu-commissions-are-there? dept.

Books 99

nk497 writes "The European Commission is investigating Apple and five publishers regarding ebook pricing, after raiding ebook firms earlier this year. 'The Commission will in particular investigate whether these publishing groups and Apple have engaged in illegal agreements or practices that would have the object or the effect of restricting competition,' the watchdog said."

Sorry! There are no comments related to the filter you selected.

duh (2)

apcullen (2504324) | more than 2 years ago | (#38279892)

of course they have. What else do you call it when everybody has to sell things at the same price?

Re:duh (2)

Tharsman (1364603) | more than 2 years ago | (#38280120)

Not sure if there is a name for: "we all buy the book from the same publisher and they charge all of us the same price, so we happen to sell it at the same price to the consumer. Why? Because we happen to have the same percentage commission rate." ... Maybe there is a german word for that.

Re:duh (1)

Anonymous Coward | more than 2 years ago | (#38280224)

Incorrect. These particular publishers will not do business with anyone who does not sell at the *exact* price they set. No sales or discounts allowed.

Re:duh (2)

CastrTroy (595695) | more than 2 years ago | (#38280406)

I agree with this. The publishers can charge whatever price they want for the book. They hold the copyright for the book. It's not like you can just go to some other publisher and get the same book at a lower price. The retailers all have to make money on it. You can only lower your selling price so close to the cost price. Everyone sells XBox 360 (or any other console) at the same price too (at least within a single country), but you don't see anybody crying foul over that.Everybody sells everything at the exact same price for the most part. Rarely do I see a price on a product that is significantly different then what a competitor is selling the exact same product for. Food seems to be the most variable. Whereas electronics/technology, and media (books, cds, dvds) seem to have almost no differentiation at all.

Re:duh (4, Informative)

apcullen (2504324) | more than 2 years ago | (#38280668)

Certainly publishers should be able to charge what they want for a book. The rest of what you say is good only... not true. You can find video games on sale for different prices from different stores. If you don't see different products at different prices, you're just not looking hard enough. Modern warfare 3 sells for $59 most places, but I managed to find it for $52. Lots of things go on sale. I could buy the hunger games trilogy in Hardcover from Barnes and Noble for $30 or from Amazon for $22. But the ebooks were the same price everywhere (and inexplicable more expensive than the hardcovers). Nobody cries foul because for other items because, while everyone buys things at the same price, they don't all take the same amount of profit and resell it at the same price. At least they don't have to. Ebooks are a problem because publishers have contracts explicitly saying how much profit a company can, and has to make (the "agent" model).

Re:duh (2)

Darinbob (1142669) | more than 2 years ago | (#38284778)

That's one thing that's annoyed me about digital purchases, the prices seem to stay higher for a longer period of time. With a book you want to sell it. Every week that you don't sell it you've wasted shelf space. Publishers are wasting storage space holding these books and will eventually remainder them. But online... well there's no inventory pressure on you to drop prices. Same with games; in a month you'll see the price of a game drop already if it's in stores, probably a big drop after holidays, but online it may take several months. You will almost never see an initial digital price be lower than the physical product, the cost savings of cutting out printing/distribution is kept as profit.

Go read competition laws again (0)

Anonymous Coward | more than 2 years ago | (#38280684)

And also contract law (unconscionable terms). And pop over to monopoly abuse (and the laws on what can be done to your copy rights if you abuse them: hint, you can lose them).

Re:duh (5, Informative)

Anonymous Coward | more than 2 years ago | (#38280806)

Maybe there is a german word for that.

Actually, in Germany book sellers are required by law to sell books at the same price (at least those from German publishers). And for that, there is indeed a word: "Buchpreisbindung".

However the sellers are quite creative at it: You may sell damaged books at lower prices, and therefore you quite often find "damaged" books where the only "damage" is the text "Mängelexemplar" ("flawed exemplar") on them.

Re:duh (1)

ScottyLad (44798) | more than 2 years ago | (#38282734)

This was also the case in the UK when the Net Book Agreement [wikipedia.org] was in force in the early 90's.

For a while, everyone played ball, the smaller retailers were able to stay in business because nobody could undercut them, and a book cost the same price no matter where you bought it. Two larger booksellers (Dillons and Waterstones) then started to exploit a loophole by either punching a hole in the cover, or marking the edge of the pages with a pen. Then they could sell books at a discount as they were "damaged goods"

The Net Book Agreement stopped being effective for this reason, and was eventually formally scrapped.

Re:duh (0)

Anonymous Coward | more than 2 years ago | (#38287360)

The Net Book Agreement was a trade agreement that held for almost a century, from 1900 - circa 1992, not just 'in the early 90's'. It was a powerful protection to the publishing of knowledge and resulted in an ecosystem of stockholding bookshops, both chain and independent. In fact, the independents were often better at this than the chains. "Stockholding bookshop" means a shop that will stock more than just the last three months-worth of new releases. It used to be the case that the stock range of a bookshop was only bettered by that of a hardware store. I think a typical figure was something like 30 - 50,000 titles. That means a healthy business of backlist sales, benefitting bookshops, publishers and - especially - authors.

The agreement was indeed broken by a couple of the chains (Dillons first and then Waterstones) who felt that their size would put them at an advantage over the indies if they followed this route. What they failed to work out was that the final benefactor would be the even larger chains of non bookselling supermarkets who were able to take over the sales - and profits - of the top 20 titles from the rest of the industry. Then came Amazon which is busy wiping the lot of them out. Dillons ended up being bought by Waterstone's who subsequently went bust. Borders bought Books Etc and we all know what happened to them. Now Amazon are eating them all for breakfast.

Amazon's strategy is to release a new title at zero or less profit, continue like that beyond the three months a chainstore can typically bear to stock a new slow-selling title, thus wipe out the competition. Then their prices go up to whatever they choose. That is the real monopolistic anti-competitive behaviour in this process. Admittedly the publishers have not caught on to this until perhaps too late (they've been only too glad to sell their paper titles through Amazon, to the destruction of their bookstore customers). But the author will certainly not gain from the rise of Amazon. 'Self-publishing' only works if you have a distributor, and if your only choice there is Amazon you've had it. Authors do need publishers, they need some kind of outside editorial and marketing overview which certainly will never be provided by Amazon who really don't care and which can't be provided by the author who is far to close to their work to take an objective view of it.

Re:duh (1)

CheerfulMacFanboy (1900788) | more than 2 years ago | (#38300768)

Maybe there is a german word for that.

Actually, in Germany book sellers are required by law to sell books at the same price (at least those from German publishers).

Of course they don't have to do that for foreign books, that's why English language books are far cheap..., no wait, they actually cost at least 3 times the UK price printed on them.

Re:duh (1)

fedos (150319) | more than 2 years ago | (#38281058)

But this isn't what happens in the book industry. The next time you purchase a physical book, look around and you will find that the publisher has printed the price on it. Publishers don't sell the books for the same price to all retailers, who all then use the same profit margin to come up with a price point. The publishers instead tell retailers what they can sell the books for. No other consumer market works this way.

What it looks like the EU is complaining about is ebook publishers making agreements with Apple to sell at a price lower than what other retailers can sell the ebooks for. Of course, this is speculation because TFA isn't specific about the EU's allegations.

Re:duh (1)

0123456 (636235) | more than 2 years ago | (#38281104)

The publishers instead tell retailers what they can sell the books for.

So perhaps you can explain why the book store I walked past yesterday had a sign in the window saying '30% off all hardbacks'? Or, indeed, why I almost never see a book on Amazon for sale at the 'retail price' without a discount?

This publisher-set pricing is exclusive to e-books, not to paper books.

Re:duh (1)

lgw (121541) | more than 2 years ago | (#38282638)

The biggest difference here is illustrated by Amazon: they are a physical book retailer, but an ebook publisher. Book publishers always set the prices they charge to their customers - the retailers. But for ebooks the publisher is used to selling directly to you. Apple's idea that the ebooks sales process needs middlemen is the oddball part of all this.

Re:duh (1)

Tharsman (1364603) | more than 2 years ago | (#38282544)

Thats called a "sugested retail price". Comic books do it too. The store can sell it at any price they want, though. However, if the store wants one of those contracts where the publisher will take books back if unsold, they may demand the sugested retail price be used unless otherwise authorized for liquidation purposes.

Next time you go to a Borders.... oh wait... next time you go to a B&B, you may see they put a their own price sticker over the printed price. They mostly repsect the print price, though.

the word is "Marketplace" (0)

Anonymous Coward | more than 2 years ago | (#38282228)

Not sure if there is a name for: "we all buy the book from the same publisher and they charge all of us the same price, so we happen to sell it at the same price to the consumer. Why? Because we happen to have the same percentage commission rate." ... Maybe there is a german word for that.

Apple (iBooks), Amazon (Kindle), et.al. do not buy e-books from publishers and Apple, Amazon, et.al. do not (with a few exceptions such as "Amazon-exclusive authors") sell e-books to consumers.

What they do is operate a Marketplace within which individual publishers can sell e-books directly to consumers. It is hardly a surprise that those publishers sell the same item for the same price in different marketplaces (as long as there are few/no barriers to prevent consumers from selecting which marketplace they shop in).

If these were physical marketplaces located in Spain, France and Italy and Starbucks were found to have higher prices on a "tall latte" in Spain than in Italy or France, there would be no cause for the Commission to take action as the consumer would be (idiotically) presumed to be able to go buy their latte from whichever within-EU marketplace the vendor was offering the lowest prices. I am annoyed as heck that Amazon let publishers use the new Apple iBooks marketplace to change Amazon from an e-book seller into just another marketplace (and the Commission should have investigated whether that was an illegal use of the publishers monopoly on their books), but once that happened there is no justifiable reason for the Commission to complain about the publishers selling their e-books at different prices in different marketplaces.

Re:the word is "Marketplace" (3, Informative)

BLKMGK (34057) | more than 2 years ago | (#38283072)

Amazon ALLOWED?! Wow, way to rewrite history there. Amazon actually went so far as to pull Macmillan books from their store in protest but knuckled under the pressure. Their middle finger at the publishers has been to make sure anyone purchasing from them sees that the price is set by the publisher and NOT by Amazon.

Read this -> http://blog.macmillanspeaks.com/a-message-from-macmillan-ceo-john-sargent/ [macmillanspeaks.com]

Amazon did NOT go quietly on this and went so far as to pull quite a few books from their digital shelves trying to NOT be forced into this but the leverage the publishers held was simply too great. This lawsuit is what should have happened all over the place right then and there, that it's only happening now years later and in the EU is a shame. Why is it that lately the EU seems to be the only place where common sense appears to be spoken?

Re:duh (2)

mjwx (966435) | more than 2 years ago | (#38288440)

Not sure if there is a name for: "we all buy the book from the same publisher and they charge all of us the same price, so we happen to sell it at the same price to the consumer. Why? Because we happen to have the same percentage commission rate." ... Maybe there is a german word for that.

Kollusion?

Re:duh (1)

BasilBrush (643681) | more than 2 years ago | (#38280122)

You'd call it the Net Book Agreement.
http://en.wikipedia.org/wiki/Net_Book_Agreement [wikipedia.org]

It operated from 1900 through to the 1990s in Britain. During this time high street had book sellers of all sizes, from the big chains to the small independents. Since it's demise, independents have trouble competing with the chains, and most have gone to the wall. Now some of the big chains of booksellers are going to the wall because of supermarkets and Amazon. Give it another 10 years and there will be nowhere on the high street where you can go to browse books.

Be careful what you wish for.

Re:duh (0)

Anonymous Coward | more than 2 years ago | (#38280376)

I can't buy buggy whips on the high street either. Eventually the only thing you will buy from a store rather than online will be groceries.

Re:duh (1)

Canazza (1428553) | more than 2 years ago | (#38280598)

My mum buys her groceries online. Gets them delivered.

Re:duh (1)

cayenne8 (626475) | more than 2 years ago | (#38281550)

My mum buys her groceries online. Gets them delivered.

How does that work? Is this just for non-perishable goods? Canned stuff, etc?

If not...I'd have trouble with that. I mean, when I shop I need to be there to pick up and feel and physically examine the produce...to make sure I get the biggest and freshest for my money. I like to look at my meat, beef in particular and try to get the one with the best marbling.

I also tend to look at expiration dates, like on dairy...and get the one with the longest expiration date.

The person picking stuff out for you in the store, would not have these things in their best interest...they'd want to rotate old stock out on you asap....and speed over care in selecting ingredients you know?

I can see for staple, non-perishable items, but I couldn't imagine letting some stranger pickout my perishables...and I do cook more from scratch than using pre-prepared and processed foods.

Re:duh (1)

Anonymous Coward | more than 2 years ago | (#38281808)

My mum buys her groceries online. Gets them delivered.

How does that work? Is this just for non-perishable goods? Canned stuff, etc?

People wouldn't use it if it was as bad as you fear. Many people in the UK, particularly the elderly, get their groceries delivered these days. Including my mother. She's never had an issue with perishables in over five years. The produce is not selected from what's in the store, they take it from their warehouse area.

Keep spreading your childish FUD though!

Well you second-hand experience from your... (1)

CountBrass (590228) | more than 2 years ago | (#38290466)

Well your second-hand experience from your mother is exactly the opposite of mine.

Over about 10 years:

I've tried Tesco and Sainsbury- I got fed up with them because they kept substituting items I didn't want for items I did. And because they expect you to hang around for 2 hour delivery slots.

I then switched to Ocado (Waitrose), who offer 1 hour delivery slots and usually arrive right at the start of the period. But after a year I stopped using them as well.

The reason: their "fresh" food onlyever has a shelf-life of a day or two. Bread, fruit, vegetables. With a few exceptions they're rotting within a couple of days of delivery.

In contrast when I go to the stores I pick the freshest -not the oldest as the delivery firms seem to do- goods and I simply avoid the food that is literally all ready rotting on the shelves (clementines and Christmas and strawberries at any time are the most likely to suffer from this).

Home delivery grocery services are still badly flawed.

Re:duh (0)

Anonymous Coward | more than 2 years ago | (#38283660)

> The person picking stuff out for you in the store, would not have these things
> in their best interest...they'd want to rotate old stock out on you asap....

That doesn't happen because you, the purchaser, can reject anything upon delivery for ANY reason, witha full refund.

So if the vegetables are flaccid and bruised, the store has to take the hit.

Re:duh (0)

Anonymous Coward | more than 2 years ago | (#38283684)

It works because you check the stuff at the dorr when it's delivered to you.

Perishables are in marked bags - as are substituions, making it obvious and easy to see which things need checked.

The bill isn't debited from your account until a day after the delivery and you are only billed for what you accepeted at the door.

Sure it means you have to spend 10 minutes going through a few things on your doorstep - but in a country where not everyone has a car and the closest supermarket is >30 minutes walk away, it's a much preffered method of getting a large monthly shop of heavy items (cans, bottles, cat litter/food etc.) without requiring any form of transport.

Yes I still prefer to go the shops in person for fruit, veg and fresh meat - but thats the sort of stuff you can pick up on the way home from work and easily carry down the road yourself.

Re:duh (0)

Anonymous Coward | more than 2 years ago | (#38280492)

> Be careful what you wish for

Less dead Trees, less buildings, less ink, waaay less ship crap around.

Personally. Sounds good to me.

Re:duh (0)

Anonymous Coward | more than 2 years ago | (#38280934)

No ability to find books by browsing, no ability to lend your friends books, having your books remotely deleted on publisher whim...

Yeah, it sounds great!

Re:duh (1)

0123456 (636235) | more than 2 years ago | (#38281204)

No ability to find books by browsing

I regularly browse through e-books on Amazon, though I wish they'd let you read more than 10% (or is it 20%?) of the book.

no ability to lend your friends books

Amazon, at least, supports limited lending so long as the publisher allows it.

having your books remotely deleted on publisher whim...

As far as I'm aware, Amazon only ever deleted books that the publisher did not have the rights to sell. It kind of sucks, but there's no good solution to that problem.

Re:duh (0)

Anonymous Coward | more than 2 years ago | (#38280400)

What else do you call it when everybody has to sell things at the same price?

Fair

Re:duh (2)

dkleinsc (563838) | more than 2 years ago | (#38280630)

Business as usual.

For companies in an oligopoly basically offering identical products, there are 3 basic ways they can make more money than they do now:
1. The big box retailer strategy: Lower their price, and hope that the extra volume more than makes up for the reduced margin.
2. The airline strategy: Raise their price, and hope that their competitors follow suit.
3. The cell phone strategy: Lower prices on a loss leader to gain customers, lock them in without them noticing, then raise prices and fees and the like.

Re:duh (1)

StikyPad (445176) | more than 2 years ago | (#38280820)

Lock them in without them noticing? When's the last time you signed a contract without noticing? If ever, you have bigger problems to worry about (not to mention said contract is also invalid). The problem isn't that consumers don't notice, it's that they don't care.

Re:duh (1)

dkleinsc (563838) | more than 2 years ago | (#38281070)

There are a couple of ways of doing this:
- Include a clause that allows you to change the terms at any time without notifying customers or providing any sort of consideration. If you look for it, you'll find it buried in the fine print of all sorts of consumer contracts. Yes, this is a stupid contract to be signing, but many people don't read the fine print or don't realize what that clause means if they see it. The courts have sometimes ruled those contracts invalid, but for most people it's more expensive to sue than it is to just pay up.

- Set up a trial plan that's very favorable, allow cancellation at any time, but make the costs to cancellation higher than the consumer realizes. For instance, before the law required cell phone providers to transfer phone numbers, they didn't do so, so in order to cancel your cell phone you had to go through all the work to change your phone number and dealing with the people who called your old number. This takes advantage of the fact that the seller knows much more about the way the market works than the buyer does - the seller is working in that market every day, while the buyer just enters the market in order to get something he wants.

Re:duh (1)

StikyPad (445176) | more than 2 years ago | (#38281528)

Include a clause that allows you to change the terms at any time without notifying customers or providing any sort of consideration. If you look for it, you'll find it buried in the fine print of all sorts of consumer contracts. Yes, this is a stupid contract to be signing, but many people don't read the fine print or don't realize what that clause means if they see it. The courts have sometimes ruled those contracts invalid, but for most people it's more expensive to sue than it is to just pay up.

You can change the terms, but that *always* creates a new contract, and the other party must consent to the new terms. Even if the other party is unaware of the changes (and appears to consent by doing nothing), they could still get out of the contract AND be compensated for the period up until they became aware of the changes, and no company is going to fight them in court because it's a guaranteed losing battle, and it's a losing PR battle even if they won.

Now I agree that people sign stupid contracts, but you can't force people to be responsible with their own money, and willful ignorance is not the same as being duped.

Re:duh (0)

Anonymous Coward | more than 2 years ago | (#38283680)

Capitalist ploys like these make me glad to live in the EUSSR!

Re:duh (2)

Zebedeu (739988) | more than 2 years ago | (#38283110)

Most people don't realize that they're paying a very high monthly fee for that cool new smartphone.

Some of my friends cringe when I say my smartphone cost 500€. It's only natural, since they paid 100-200€ for an equivalent device.
What they fail to understand is that while they're locked into expensive contracts, I'm paying around 10€ per month (8€ internet + admittedly few calls and SMS) on my prepaid card without any sort of obligations.

It's the same way that printer manufacturers realized that they can lose money on the printer hardware and the make up for it on the cartridges.

Re:duh (2)

StikyPad (445176) | more than 2 years ago | (#38283376)

Like I said, the problem isn't that people aren't aware what they're getting in to, it's that they don't care (enough to look into alternatives). Through their actions, people are saying that they care more about convenience (the convenience of the readily available option) than cost. It's not like we live in the dark ages where this information isn't readily available to anyone who cares enough to look.

Hardware too (1)

ISoldat53 (977164) | more than 2 years ago | (#38280964)

It seems the same thing happens with Apple hardware too. Same price everywhere.

Apples and Apples comparison (1)

andersh (229403) | more than 2 years ago | (#38281806)

That's how most companies operate (suggested retail price), however that's just the products of one company, not like the book market where there are several publishers.

Apple competes with HP and many others. Amazon suddenly can't compete with Apple, Kobo or others on books because the publishers don't want to!

This is the publishers doing, never mind Apple.

Re:Apples and Apples comparison (1)

arkenian (1560563) | more than 2 years ago | (#38282782)

That's how most companies operate (suggested retail price), however that's just the products of one company, not like the book market where there are several publishers.

Apple competes with HP and many others. Amazon suddenly can't compete with Apple, Kobo or others on books because the publishers don't want to!

This is the publishers doing, never mind Apple.

This is mostly true, and there's really no question that the publishers are the "Bad guys" here, except Apple probably included a clause which basically said "fine we'll go for the agency model, but in return you have to guarantee that you're not going to undercut us later" (apple is known to have made deals like this in other fora) So, basically, Apple conspired with the five publishers in their scheme to price-fix the e-book market, something the other booksellers such as Amazon and B&N had been unwilling to do. That interpretation assumes, of course, that the EU decides that the contracts were inappropriate. As you say, they may not be. But it could be a very hard sell. The fundamental fact the commission has in evidence is "apple entered the market, prices rose"

Whuh? (0, Redundant)

Moheeheeko (1682914) | more than 2 years ago | (#38279958)

Apple? Practice shady business to limit competition? Nope you must be mistake. St. Jobs the profitable would never allow that.

Re:Whuh? (0)

Anonymous Coward | more than 2 years ago | (#38280188)

Geek filth? Live in an imaginary tech world of angels and demons? Take yet another zero intellect dumb onto the internet?

Re:Whuh? (0)

Anonymous Coward | more than 2 years ago | (#38280318)

Good my young Applrentice. Let the butthurt flow through you.

Re:Whuh? (1)

Theophany (2519296) | more than 2 years ago | (#38280294)

I am not mistake, son. I am disappoint. :/

Welcome to capitalism, by the way. Hope you enjoy your stay. We'll bill your credit card on departure.

Lets not just include Apple (1)

Anonymous Coward | more than 2 years ago | (#38280046)

What about Amazon? Or the other big E-book retailers? How often to e-books go on sale? Discounting? Ever see an e-book for 50% off? Not very often I bet. Consider that an e-book costs mere cents to create and able to offer an unlimited supply surely they should have variable prices.

Re:Lets not just include Apple (2, Interesting)

Anonymous Coward | more than 2 years ago | (#38280084)

The point is that these publishers are dictating the price to Amazon and any other ebook distributors. In order to sell these ebooks, those distributors must sell at the price set by the publisher and are not allowed to give any sort of discount.

Re:Lets not just include Apple (1, Interesting)

slackware 3.6 (2524328) | more than 2 years ago | (#38280368)

Different pricing between e-book distributors would possibly give one platform an advantage. Those evil publishers could very well be balancing out the market so one reader doesn't become the most popular because of book price rather than the readers own merit. And if one reader did get majority market share how long would they keep selling cheap books.

Re:Lets not just include Apple (1)

Anonymous Coward | more than 2 years ago | (#38280560)

I've been reading ebooks since 2002. I can tell you that the Agency pricing model (that sets the book price at the distributor level) has hurt competition. I used to buy my books from fictionwise.com. They were a great company with a loyalty program that kept me buying several books every month. Now I buy from Amazon. Why? Because fictionwise can no longer carry Agency books, since loyalty programs are verboten. Fictionwise sold books in quite a few formats, so I could buy from them without getting stuck in one distributor's platform. Now, I have to choose from one of the big guys and get stuck in their particular platform. I've actually been buying more print books in the last year than I had in almost 10.

Re:Lets not just include Apple (1)

apcullen (2504324) | more than 2 years ago | (#38281086)

That's a really excellent point. But the publishers could get around that by dictating the format their books get published in be readable by different e-readers. Most things seem to be able to read ePUB format. Pretty sure they all read PDFs.

Re:Lets not just include Apple (1)

BLKMGK (34057) | more than 2 years ago | (#38282236)

Well except they want DRM and that's where the platforms all differ. I use Kindle and Caliber, I may buy a Nook soon but it won't ever see a DRM book. I stopped buying from Amazon when their prices shot through the roof as publishers began dictating prices. What I used to find for $9 and often less is now much more and often more expensive than hard copy. That's crap and I welcome this suit as well as the efforts of Amazon to eat the publisher's lunch by publishing themselves. They have to if they want to survive, the publishers want them gone...

Re:Lets not just include Apple (5, Informative)

bkaul01 (619795) | more than 2 years ago | (#38280562)

Paul Thurrott's column [winsupersite.com] on this speaks to that question, and describes the logic of the antitrust investigation pretty succinctly:

Before Apple's entry, publishers set the wholesale price of books, but retailers could determine the final selling price. But Apple changed that, allowing publishers for the first time to determine the final price at which eBooks were sold to consumers. As a result, the average selling price of new eBooks jumped from $9.99 to $14.99.

The EC will try to determine if the firms colluded to fix prices and restrict competition. Both charges should be easily proven.

As I reported in February 2010, while Apple was negotiating with the major publishers, at least one of them, Macmillan, demanded that Amazon raise prices on its Kindle books to match Apple's prices. Amazon, now as then, owns the dominant eBook platform, called Kindle. And Macmillan threatened to pull its books from the Kindle unless Amazon went along with the price hike. After temporarily pulling Macmillan's titles from its store, Amazon capitulated and raised prices as demanded.

"We have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books," Amazon wrote to customers at the time.

Re:Lets not just include Apple (1)

StikyPad (445176) | more than 2 years ago | (#38280968)

"We have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books," Amazon wrote to customers at the time.

That's exactly the same legal argument that didn't work for Psystar in the US. Maybe such reasoning will have better results in the EU.

Re:Lets not just include Apple (1)

gbjbaanb (229885) | more than 2 years ago | (#38282258)

generally producers that are shown to set that price in collusion with their competitiors are guilty of forming a cartel. IANAL but it appears that telling Amazon to raise their prices means Macmillan was choosing to set a price based on what its competitor set (ie the price on Apple's store).

They could have told Apple to reduce their prices and they'd probably be guilty just the same, the idea is that they set the price according to the market - not artificially set the prices outside the consumer marketplace, and certainly not tell a retailer what their margin on the products should be.

It worked against the airlines, they kept prices according to their competitors and engaged in shady deals to keep each other from reducing prices competitively. When the whistle was blown on them, British Airways was fined £271m - in the UK, you'd be fined 10% of turnover if found guilty of price-fixing.

Re:Lets not just include Apple (1)

StikyPad (445176) | more than 2 years ago | (#38282956)

But Apple and Amazon didn't collude.

Re:Lets not just include Apple (1)

BLKMGK (34057) | more than 2 years ago | (#38283136)

Actually Macmillan gave them a choice - they could continue with their existing deal but would find large swaths of their books no longer available to Amazon. They said as much -> http://blog.macmillanspeaks.com/a-message-from-macmillan-ceo-john-sargent/ [macmillanspeaks.com]

Their blog is fascinating as it truly shows just how far their head is up their ass IMO.

Re:Lets not just include Apple (1)

jonbryce (703250) | more than 2 years ago | (#38285106)

Amazon aren't one of the companies being investigated. I guess they are the ones who reported it to the EU and being the first to report it means you get off any fines that are levied.

Meanwhile in the USofA (1)

ThatsNotPudding (1045640) | more than 2 years ago | (#38282776)

All this is perfectly fine with the DoJ and the FTC as it involves a beloved US cash cow. After all, if the founder didn't have to bother with license plates on his car, why should his corporation have to bother with mere anti-trust issues?

Re:Lets not just include Apple (1)

CheerfulMacFanboy (1900788) | more than 2 years ago | (#38300870)

Paul Thurrott's column [winsupersite.com] on this speaks to that question, and describes the logic of the antitrust investigation pretty succinctly:

Before Apple's entry, publishers set the wholesale price of books, but retailers could determine the final selling price. But Apple changed that, allowing publishers for the first time to determine the final price at which eBooks were sold to consumers. As a result, the average selling price of new eBooks jumped from $9.99 to $14.99.

The EC will try to determine if the firms colluded to fix prices and restrict competition. Both charges should be easily proven.

As I reported in February 2010, while Apple was negotiating with the major publishers, at least one of them, Macmillan, demanded that Amazon raise prices on its Kindle books to match Apple's prices. Amazon, now as then, owns the dominant eBook platform, called Kindle. And Macmillan threatened to pull its books from the Kindle unless Amazon went along with the price hike. After temporarily pulling Macmillan's titles from its store, Amazon capitulated and raised prices as demanded.

"We have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books," Amazon wrote to customers at the time.

So instead of Amazon now the publisher has the (price-setting) monopoly on where to get their ebooks. I can see why Amazon doesn't like that.

Re:Lets not just include Apple (1)

Desler (1608317) | more than 2 years ago | (#38281172)

Consider that an e-book costs mere cents to create

This just in: products have more to their cost than just the cost of replication and materials. I'm pretty sure the author(s), editors, typesetters, etc. that have a hand in the creation of the work want to get paid, too, no?

Easy Fix (0)

Anonymous Coward | more than 2 years ago | (#38280106)

And in unrelated news, all the members of the EU will receive groupons for $2 off a shiny new iPad2.

DRM Free to maybe? (0)

SlickNic (1097097) | more than 2 years ago | (#38280512)

They are definitely price fixing, every single time I've checked the price between the nook store and the kindle store they are exactly the same price (granted I have checked maybe 10 books at both stores) so why not include Amazon and BN in the investigation as well. It would also be great if they could force DRM free books and allow a used e-book market... oh right you can wake me up now I'm sure I'm dreaming reasonably priced DRM free e-books so I can resell/loan them when done?

Re:DRM Free to maybe? (1)

marcosdumay (620877) | more than 2 years ago | (#38280578)

Maybe they didn't include Amazon and B&N because that is an european commission, and those distributors don't operate at Europe.

Re:DRM Free to maybe? (1)

donatzsky (91033) | more than 2 years ago | (#38280830)

While B&N doesn't operate in Europe, Amazon most certainly does - in fact the Kindle is absolutely everywhere this Christmas, here in France.

Re:DRM Free to maybe? (1)

icebraining (1313345) | more than 2 years ago | (#38280882)

Amazon certainly does: http://www.amazon.eu/ [amazon.eu]

Re:DRM Free to maybe? (1)

BLKMGK (34057) | more than 2 years ago | (#38282306)

Have you not ever noticed the blurb next to the Amazon price that notes the price is set by the PUBLISHER and not Amazon? Amazon is no longer able to set their own prices, fought this, and lost the fight right after the iPad came out. The result being that blurb to let their customers know who's fucking them - apparently you've not been paying attention....

Re:DRM Free to maybe? (2)

BlackCreek (1004083) | more than 2 years ago | (#38280640)

Amazon was the one setting their own price to the books. The publishers (supported by Apple) demanded (at the time that the iPad came to the game) Amazon to only sell their books at a fixed retail price.

The Agency Model is a racket! (3, Informative)

thesuperbigfrog (715362) | more than 2 years ago | (#38280550)

The Agency Model [zdnet.com] is a racket that takes away a seller's ability to price ebooks how they see fit.

This is bad for the consumer since it means that market forces have less sway and there is little to distinguish one store from another. You will not find ebooks on sale and there is no point in "shopping around" since the price is the same everywhere.

If similar agreements were in place for other products, it would cause lawsuits. Imagine if all of the oil products sold by Shell or BP were given fixed prices. Media companies would love to have their own profit-guaranteed cartel and will push for illegal agreements to defend their aging business model.

Re:The Agency Model is a racket! (1)

MtViewGuy (197597) | more than 2 years ago | (#38289582)

In effect, the Agency Model is illegal price fixing by doing a "de facto" price floor at an unreasonable level, a practice banned by US and European Union antitrust laws. I would not be surprised that as a settlement, the price of new e-books will have a price floor of around US$12 per e-book, not the US$15 to US$16 it is now.

Although a bit offtopic... (0)

Anonymous Coward | more than 2 years ago | (#38280564)

This is another example of why free-market is bullshit. Leave these big players uncontrolled and they will screw everybody over. Even real competitors have more to gain from price fixing then from real competition, and the small folk is always screwed.

Re:Although a bit offtopic... (1)

0123456 (636235) | more than 2 years ago | (#38280754)

This is another example of why free-market is bullshit. Leave these big players uncontrolled and they will screw everybody over.

You think publishing, which relies entirely on a GOVERNMENT-GRANTED MONOPOLY to operate, is somehow an indictment of the free market?

BTW, there are about a bazillion e-books on Amazon for $0.99 if you don't want to pay $19.99 for one from a big publisher.

Re:Although a bit offtopic... (0)

Anonymous Coward | more than 2 years ago | (#38280926)

Neither of your points doesn't disprove the OP's comment.

They were involved in price fixing, which essentially is only illegal because there is government regulation. Without regulation this would happen much more often and on larger scale. The only hand keeping things in check here is the government, faulty and corrupt as it is.

Re:Although a bit offtopic... (1)

0123456 (636235) | more than 2 years ago | (#38281066)

They were involved in price fixing, which essentially is only illegal because there is government regulation. Without regulation this would happen much more often and on larger scale.

Let's try that again.

Publishers only exist because of copyright. Copyright is a government-granted monopoly.

Now explain how publishers would price-fix if copyright did not exist.

When a monopoly exists, it's usually for one of two reasons:

1. Bigger is cheaper. No smaller company can compete because the big company is more efficient and can sell their product for less than any competitor. This is good, because it means customers are paying less.
2. Government is preventing competition. This is bad, because it means customers are paying more than they should have to.

How does a big corporation become a monopoly that can charge excessively high prices without a government to keep competition out of the market?

So you want no copyrights, then? (0)

Anonymous Coward | more than 2 years ago | (#38281228)

Or are you a twat?

Re:Although a bit offtopic... (0)

Anonymous Coward | more than 2 years ago | (#38282036)

You forgot:

3. The network effect. The product is part of a larger infrastructure, and you are at an advantage if you use the same product as everyone else. Initially the product may have been the cheapest and/or best, but as soon as a critical mass is reached, the cost of using something different is high enough that most people will not change to a better product even if it is cheaper, for the simple reason that the new product won't work with the existing infrastructure. At that time, the prices of the monopoly can be raised.

Oh, and about 1 you are also wrong: As soon as the competitors are driven out of market, the remaining monopolist company will raise the prices. As soon as a new competitor comes, they can easily lower the prices again to below the startup's cost (but still more than the competitors, as established companies, would have been able to offer), thus quickly driving the startup out of business. Since potential startup founders know that, they rarely actually have to do it.

Re:Although a bit offtopic... (1)

scamper_22 (1073470) | more than 2 years ago | (#38281126)

Of course it is!
Just like healthcare in the US is heavily regulated and relies on various government monopolies (medical associations, patents...) is an indictment of the free market. It can only be solved with an even greater monopoly by making it a universal national system or a national monopoly.

You don't know anything do you? /s

Re:Although a bit offtopic... (1)

lgw (121541) | more than 2 years ago | (#38282760)

For sure! Whenever the problem is "too much government", it's always clear that the solution is "even more government". Maybe the problems of national healthcare systems could be solved by some sort of international healthcare system! If we just keep trying long enough, we'll surely elect the worlds first non-corrupt politician, and everything will be rainbows and unicorn giggles.

Ebooks are Great (5, Insightful)

thomasw_lrd (1203850) | more than 2 years ago | (#38280802)

Ebooks are slowly changing the way authors sell their books. No longer do you need a publisher to sell you book. Self-publishing is not only a possibility now, but it is also a reality. The only thing you can get from a publisher now is up front fees and marketing. But with the web, you can do much of that yourself.

Step 1. Create a company to help authors promote books
Step 2: ????
Step 3: Profit

Re:Ebooks are Great (1)

Anonymous Coward | more than 2 years ago | (#38281910)

I think that, rather than self-publish, the big opportunity is for small/indie publishers. I've read a few self-published ebooks and I would say that they tend to lack the kind of polish that a good editor can supply. In that sense, I think having a publisher, or at least paying for an editor's services, is essential to the success of these endeavors.

Small publishers have the chance to help create a new model:

1. No more big advances. Instead, offer a larger piece of the royalty pie.
2. Push the quality envelope with better editing; essential to push your writers above the poor to midling self-pulished crap out there. (Hey, I'm guilty of this myself. I wrote a short story and put it up there, just because I could. I know it was crap, but it was a fun exercise.)
3. Sell for less than the big guys. Much less.

I think the big publishers haven't quite wrapped their heads around how different a game the ebook market is. When they sell a print book, they have to look at recovering the cost of that book possibly being loaned out, given away, and/or sold and resold at used book stores. An ebook, OTOH, is a one-shot deal. I buy a book for me and I read it. I recommend it to friends, but they have to go purchase it themselves. I can't offload it to a bookstore or donate it to a library. So, the publisher shouldn't be factoring all that into the cost of my one copy.

Re:Ebooks are Great (0)

Anonymous Coward | more than 2 years ago | (#38283666)

You seem to believe that the price is set to basically cover the costs. Actually the price is set to where they make the most money. The costs obviously enter that equation, but except in a very competitive market, it doesn't determine the price. If they can make more money by rising the price, they will rise the price, no matter how much it already exceeds the cost.

Re:Ebooks are Great (2)

Telvin_3d (855514) | more than 2 years ago | (#38282342)

Yes, all you get from a publisher is up-front fees and marketing. And professional editing. And layout and typesetting.

And the way you say 'marketing' makes it sound like an easy thing. There are a quarter of a million books published every year in North America alone. Writing the first rough draft isn't the hard part. Writing the much better eighth draft is harder. Then getting anyone to read the damn thing, much less pay for it, is hardest.

No one is getting rich in the book industry. No one. Not the publishers, not the editors, not the authors. As an industry it is notorious for how much money it doesn't make.

If there were an easy way to successfully chop out any of the various book production positions it would have already happened long ago. And not years ago but decades ago.

Re:Ebooks are Great (1)

thomasw_lrd (1203850) | more than 2 years ago | (#38282560)

You are correct. The reason why it hasn't happened before is that self publishing was hard 10 years ago. It was even hard 2 years ago. You needed money to pay for everything. Now you only need a way to support yourself until you can get the book written. Once there, you can self promote with websites, blogs, twitter, facebook, so on and so forth. Once authors realize this, the book industry can be profitable more profitable because you are no longer beholden to share holders. An author can now pay an editor a lot more than they were making before. This editor can have a fe typesetters, and whatever else is needed. Once you have one good book, people will probs ln continue to buy anything you write.

Music artists take note. In this day and age of always connected consumers, self promotion is not only done, but easy to do. ALook at Billy Corgan of the smashing pumpkins. His latest release is freely available for download, and I'm assuming he is making a decent living releasing limited cuts of the tracks.

Look at Rebecca Blacks Friday song. She has made a shit ton of money from one single all because of the crowd sourcing effects of YouTube.

Look at open source projects. A lot more people with talent are being discovered this day due to social media, and self promotion. All of which is due in part to better technology. Ebooks are just a small part of this.

Re:Ebooks are Great (1)

Telvin_3d (855514) | more than 2 years ago | (#38283740)

Look at Rebecca Blacks Friday song. She has made a shit ton of money from one single all because of the crowd sourcing effects of YouTube... Look at open source projects.

A shit-ton of money? Seriously? Grand total, before taxes and any cuts she needs to make to management or to pay costs, the song generated between $25,000-$50,000. As a one-hit fluke that's awesome, but a career it does not make. Randomly being the one video in a million that happens to catch on for a moment is not exactly a strategy you can build a life around. Google "Rebecca black sales" if you want to see the numbers.

Can you name two dozen OSS projects that are even paying their contributors living wages? I think I could get about a half dozen before I was really stretching.

For all the hype, our new tech is really not changing the basic economic equations of any industry. Replacing some bits with the new equivalent, but not changing the fundamental equation. Why? Because the costs and limiting factors are almost never related tot he technology, regardless of the industry.

It's like with films, you constantly see the hype about how cheap equipment will free us from the studio system. But the costs of film making have never been the equipment, it's always been paying fifty people who know what they are doing for two months to get a project made. That hasn't changed. Printing costs (the only thing digital eliminates... sort of) have never been the expensive part of bringing a book to market. Duplication costs have not been holding the record industry back for half a century.

Re:Ebooks are Great (0)

Anonymous Coward | more than 2 years ago | (#38282668)

Yes, all you get from a publisher is up-front fees and marketing. And professional editing. And layout and typesetting.

Have you ever read an ebook?

Re:Ebooks are Great (1)

shutdown -p now (807394) | more than 2 years ago | (#38282936)

Have you ever read an unedited manuscript?

There is a writer in Russia who goes through traditional publishing route (both paper and e-books), but puts manuscripts of his works-in-progress online, free for everyone to read. The last thing that he makes available for free is the final version of the manuscript before it goes off to the editor. Sure, you can read them, and even enjoy them, but when you compare them to what is actually published, you quickly understand what is it the publishers actually do, and why you pay them to do that (perhaps that is the whole point of him doing it that way, I don't know).

Re:Ebooks are Great (0)

Anonymous Coward | more than 2 years ago | (#38289692)

Hi, this sound very interesting. Would you mind posting the website of this guy? Is it in Russian?
FYI: What comes to my mind with regards to this is Rudy Ruckers website, where he posts not only the final book but also his diary of the process writing it: http://www.cs.sjsu.edu/faculty/rucker/

Thanks

Re:Ebooks are Great (1)

shutdown -p now (807394) | more than 2 years ago | (#38292396)

It's Andrew Cruz [samlib.ru] . And, yes, it is in Russian.

The benefit he gains from it is that there are enough fans who rush to read the manuscripts even in their raw form, and effectively serve as additional pre-screening before proper editing. For his books, it can matter because he's a prepper, and his books tend to be pretty heavy on description of weapons and other survivalist equipment. Regular editors generally don't know enough on the topic to correct any factual mistakes he might made, but the fans do.

Re:Ebooks are Great (1)

thejynxed (831517) | more than 2 years ago | (#38282922)

Tell me again why an eBook needs anything more than A) an author B) an editor (editors can do layout) C) distributor? Well, granted, some books may need illustrations and some people may fuss about making an un-needed "cover".

Typesetters though? For an eBook? REALLY? Because, I honestly thought that every single text editor out there allows you to, you know, change your own font and font size/style. Even Notepad.

Re:Ebooks are Great (2)

Telvin_3d (855514) | more than 2 years ago | (#38283516)

'Changing the font and size' is about the least part of what a typesetter/layout person does. And it's a job that is particularly important for digital media where consciously choosing how things are displayed makes a massive difference to the readability. What font gets used? How large are the indents and how will the book treat text-wrapping for long lines? How are chapters and other headings handled? Are there quotations or other types of inset text?

God help you if you are doing something actually complicated with illustrations or funky layout tricks.

These things are what separates a professional book from a wall of text. And you have never noticed them in your life because they are always done long before it sees your hands. Go read some of the 'self-published' stuff on Amazon and try and figure out why the reading experience feels so clunky.

Re:Ebooks are Great (0)

Anonymous Coward | more than 2 years ago | (#38282716)

Step 2: create horse_ebooks on twitter

I realized this (1)

esocid (946821) | more than 2 years ago | (#38282402)

When I wanted to buy a book, and discovered that the hardcover was cheaper than the e-book....So I bought the hardcover.

There is no _reasonable_ explanation as to why a physical book should be cheaper than 1s and 0s.

Re:I realized this (1)

lgw (121541) | more than 2 years ago | (#38282832)

There is no _reasonable_ explanation as to why a physical book should be cheaper than 1s and 0s.

Sure there is. The cost the physical ink an paper is maybe 15% of the cost of publishing a book, so you're starting from about the sam eplace price-wise. (Charlie Stross has a great write up on this, at length http://www.antipope.org/charlie/blog-static/2010/04/common-misconceptions-about-pu-1.html [antipope.org] ) Retailers will discount physical books to shift inventory off shelves, something irrelevent to ebooks. Of course, you'd think the publisher would want to discount the ebooks to help build a buzz for a book (since there are always extra ebooks to sell, but a spike in demand for physical books just leaves shelves empty), but most publishers are still stuck in a 20th century mindset with ths stuff, something Charlie Stross also explains at length.

Re:I realized this (1)

esocid (946821) | more than 2 years ago | (#38283924)

My thought was more towards inherent costs, and artificial supply/demand. Physicals carry not only costs to print, bind, but to distribute. Shipping 12 crates of books should cost more than uploading an e-book to a source. When the book is in short supply, and it is in demand, the cost should go up. That is practically an impossibility for an e-book. I'm not sure exactly where you're pointing me. I read through the ebook section and only saw this bit:

At the same time, something's going to have to give on pricing. Treating ebooks as a parallel imprint, equivalent to hardcovers or paperbacks, is insane. Rather, we need ebooks with variable pricing — moderately cheaper than the corresponding paper edition (to reflect the reduced cost of production), and dropping steadily over time.

I completely understand its more from publishers and retailers that this cost comes, and that what I'm specifically addressing/complaining about. Something which _should_ have less overhead, _should_ cost less. Even 2$ less would convince me to not buy in print. And again, that _should_ give more money to authors, although I doubt it does.

Re:I realized this (1)

jonbryce (703250) | more than 2 years ago | (#38285188)

Printing and shipping dead tree books is not that expensive. Setting up a data centre and all the associated payment and fulfilment stuff to run an e-book store doesn't come free. Us slashdotters do like to be paid for our efforts.

Re:I realized this (1)

lgw (121541) | more than 2 years ago | (#38286364)

My thought was more towards inherent costs, and artificial supply/demand. Physicals carry not only costs to print, bind, but to distribute. Shipping 12 crates of books should cost more than uploading an e-book to a source.

This is the most common misperception about publishing. Read his first couple of essays for a thorough cost breakdown, if you doubt it. The total "physical cost": printing, binding, shipping, etc, is only 10-15% of the cost of publishing a typical book (at least, a novel, nonfiction is different). 85%-90% of the cost is paying the author, the various proofreaders, the typesetters (yes, ebooks also have typesetters), the marketing spend, and on and on.

Something which _should_ have less overhead, _should_ cost less. Even 2$ less would convince me to not buy in print. And again, that _should_ give more money to authors, although I doubt it does.

Except that's where you're off - there isn't much less overhead for the ebook, because most of the costs are the fixed costs, not the per-unit costs. And the author (usually) has no special control over or different profits from an ebook - when you sell your book to your publisher, you sell the license to the ebook format as well, no choice there unless your among th handful of authors big enough to make their own rules. This is why ebooks tend to be regional from a sales perspective, eben though that makes no sense on the internet, the publishing contracts work that way.

Re:I realized this (1)

esocid (946821) | more than 2 years ago | (#38290728)

I don't doubt it, it's just counter-intuitive. Thanks for the source, I'll check it out.

Unfortunately (0)

Anonymous Coward | more than 2 years ago | (#38284362)

Unfortunately there appear to be an astonishing number of people (idiots) who are willing to buy a digital copy for the same price or even more than they would pay for an actual physical copy. Until this changes, there is little or no reason for any company to lower their prices. Let's face it, if you are (for example) a painter, and you find out that people are perfectly willing to pay the same amount for a picture (print) of your painting, why charge less for it. If people want to be idiots let them, it's better for you. Now that doesn't happen in the case of fine-art vs. the prints of them, but the analogy is reasonably sound. People have proven willing to pay far more than they should for eBooks; that's the reality of it. It's unfortunate for those of us who use our brains, you know, to decide things, rather than just running about willy-nilly buying whatever big companies want us to and whatever prices they suggest. But those companies don't care about us because the vast majority of people prove over and over again that they are incapable of making rational purchasing decisions.

Ebook price comparison search engine (1)

Man Eating Duck (534479) | more than 2 years ago | (#38286194)

Slightly OT, but as many reading this probably care about ebook prices: Try the legal search engine in the open source Calibre [calibre-ebook.com] . Besides being arguably the best library management software available it's got a comparison search (called Get Books in the toolbar) which is the most comprehensive I've seen. It'll provide hits from a lot of different stores, but you can configure which ones. Or, if you're comfortable with liberating your legally bought books from their DRM shackles, I heard of this guy called Apprentice Alf who can help you, in which case your choice of store and DRM scheme doesn't matter all that much :)

If you're on Linux I recommend the binary install of Calibre as most distros have old-to-archaic versions in their repos.

Check for New Comments
Slashdot Login

Need an Account?

Forgot your password?