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Apple Fires Back At DoJ Over eBook Price Fixing

Soulskill posted about 2 years ago | from the best-defense-is-a-good-offense dept.

Businesses 311

An anonymous reader writes "CNN takes a look at Apple's response to the Department of Justice's investigation into eBook price fixing. The filing 'cuts the government's case to shreds' while at the same time not bothering to defend the five publishers also under investigation. Apple said, 'The Government starts from the false premise (PDF) that an eBooks "market" was characterized by "robust price competition" prior to Apple's entry. This ignores a simple and incontrovertible fact: before 2010, there was no real competition, there was only Amazon. At the time Apple entered the market, Amazon sold nearly nine out of every ten eBooks, and its power over price and product selection was nearly absolute.'"

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311 comments

I only download free books (1, Informative)

Anonymous Coward | about 2 years ago | (#40129441)

Support the Gutenberg Project. Don't pay for your ebooks. Download them for free from http://www.gutenberg.org/

Re:I only download free books (3, Insightful)

Anonymous Coward | about 2 years ago | (#40129511)

Project Gutenberg is great, and I'm sure many would say there are plenty of great 100yo books to keep you busy for a lifetime. But some of us like to read newer stuff too, and just sometimes, an ebook is nicer to deal with than a real book.

Personal preference and all that.

Re:I only download free books (0)

Anonymous Coward | about 2 years ago | (#40129555)

If you don't fight you can't win. The point is to give up some of our desires for the eventual potential benefits. It is this refusal to reconcile your own actions are harmful that are the problem.

Re:I only download free books (4, Interesting)

MrHanky (141717) | about 2 years ago | (#40129583)

It's harmful to pay for books?

Re:I only download free books (5, Insightful)

ticker47 (954580) | about 2 years ago | (#40129643)

Yes, because you know that those books available on Project Gutenberg were never sold, no one tried to buy one and it was only when they were available online for free that people tried to read them.

Re:I only download free books (2)

Anonymous Coward | about 2 years ago | (#40129667)

I don't have a problem supporting authors I like.

Re:I only download free books (1)

Anonymous Coward | about 2 years ago | (#40129755)

Gutenburg books are just out of copyright, or never had copyright. It does NOT mean they were never sold.

All of Mark Twain's books are on there. You think he never had copyright and never sold them?

The site has very few unique books.

Re:I only download free books (0)

Anonymous Coward | about 2 years ago | (#40129839)

Certainly is if it's Apple you're paying to!

Re:I only download free books (3, Insightful)

Lumpy (12016) | about 2 years ago | (#40130073)

from a publisher? yes.

from a writer? no.

most authors wold KILL to get $2.00 per book sold. everything else goes to the publisher that is whoring the writers

Re:I only download free books (1)

MrHanky (141717) | about 2 years ago | (#40130147)

Whatever. Most decent writers seem to prefer to go the route through the publisher instead of self-publishing, for reasons which seem obvious when you've actually published something. A publisher does a fair bit more than just marketing and pressing Ctrl-P.

Re:I only download free books (4, Interesting)

artor3 (1344997) | about 2 years ago | (#40129683)

I want you to lose. I think that authors deserve to earn a decent living. So I'll keep buying books and supporting authors I enjoy.

Re:I only download free books (1)

Anonymous Coward | about 2 years ago | (#40129701)

Horrible writers earn a good living too. Doesn't mean they deserve though.

Re:I only download free books (2, Interesting)

Anonymous Coward | about 2 years ago | (#40129753)

No, they don't. A writer must sell a great many books to earn a good living; this can be done by writing books you do not like, but it cannot be done by a horrible writer. If you think you've read a published book by a horrible author, then you haven't seen the stuff they're rejecting.

Re:I only download free books (2)

artor3 (1344997) | about 2 years ago | (#40129877)

So what? No writer should earn a living because there are some bad ones? There are bad engineers too, should we stop paying all engineers? For that matter, there are bad teachers, and construction workers, and doctors, and every other profession you care to name. I guess we should just stop paying everyone.

Re:I only download free books (4, Insightful)

Man On Pink Corner (1089867) | about 2 years ago | (#40130149)

If only there were some sort of mechanism, some sort of economic framework for commercial activity between willing parties, that could be used to sort out the question of who deserves how much money.

Re:I only download free books (-1)

Anonymous Coward | about 2 years ago | (#40129781)

I bet you're a smelly OWS drop-out loser.

Re:I only download free books (1)

noh8rz3 (2593935) | about 2 years ago | (#40129791)

If you don't fight you can't win.

if you can't win, then don't fight! pick your battles.

Re:I only download free books (2)

GodfatherofSoul (174979) | about 2 years ago | (#40129725)

Heaven forbid artists and authors get rewarded for their creativity.

Re:I only download free books (3, Insightful)

Anonymous Coward | about 2 years ago | (#40129757)

I create copyrighted material all day long, yet for some reason it is normal and expected for me to only get paid while I am creating and a corporation to get all of the ongoing profits.

Perhaps writers and artists would be happier if we changed their "advances" into "wages" or "contract fees".

Re:I only download free books (0)

El Torico (732160) | about 2 years ago | (#40129857)

Perhaps you should strike out on your own and freelance?
[Crickets]
I didn't think so.

Re:I only download free books (2)

schnell (163007) | about 2 years ago | (#40129943)

I create copyrighted material all day long, yet for some reason it is normal and expected for me to only get paid while I am creating and a corporation to get all of the ongoing profits.

Is this a serious statement? You may want to read up on the definition of "work for hire" versus "authorship" for copyright purposes.

You get paid a salary day in and day out to do this, no? Authors and musicians do not. Unlike you, their success is entirely dependent on the purchase of their works.

Re:I only download free books (2, Insightful)

Anonymous Coward | about 2 years ago | (#40129855)

Heaven forbid that artists and authors do a single piece of work and then get paid for it (and some corporation get paid for it) 70+ years *after they are dead*. That is completely f*cked up.

Re:I only download free books (1)

Anonymous Coward | about 2 years ago | (#40130033)

Authors shoud be rewarded but that doesn't mean I shoud be paying $8 for an ebook written50 years ago by someone no longer around.

the end of the advance? the end of the book tour? (2)

goombah99 (560566) | about 2 years ago | (#40130111)

while apple is filling many of the publisher's roles taking on some of it's costs and slightly more of its profits. If everything stayed the same then this would mean less money left over for author development via advances and promotion. Apple uses none of it's income for that.

But it may be the case the market for reading increases. That's not clear. The public can only read so much. But maybe they might consume (without reading) more if it is made easy. In which case they offset the profits they remove by expanding the pie.

The people getting hurt are definitely the brick and mortar stores. Which is sad if you are a bibliophile. browsing is wonderful and so is talking to a shrewd librarian or bookstore person about what you might like to read next. I suspect that recommendation systems on online can't match that.

I suspect we will see two divergent phenomena. A narrowing of general tastes while at the same time an enlargement of specialized tastes. That is, fewer books will be read a lot by mainstream readers while rare titles will become more available to those seeking them.

In such a case there is less incentive for the advance or the book tour for marginal authors.

Re:I only download free books (2)

xyzzyman (811669) | about 2 years ago | (#40129925)

If this was about television, movies or music, people would be on here preaching about how you should pirate what you want to see. So anonymous coward, next time an article such as those comes up, I ask you to come back and ask people to support sites with free music & video for download.

A lot of words (5, Informative)

Anonymous Coward | about 2 years ago | (#40129447)

That's a lot of words that don't change the fact that virtually every eBook you could ever want to buy costs more now than it did before Apple entered the market, which is the actual problem that the DOJ case intended to address.

Re:A lot of words (4, Interesting)

sribe (304414) | about 2 years ago | (#40129475)

That's a lot of words that don't change the fact that virtually every eBook you could ever want to buy costs more now than it did before Apple entered the market, which is the actual problem that the DOJ case intended to address.

Except that if you actually read the words, they claim the exact opposite. I have no data to offer about their claims, but you haven't offered any either. In fact, you seem to be offering what the DOJ offered, anecdotes involving the prices of a tiny number of books, with no analysis at all of the overall market.

And remember, Apple exerts almost zero (the exception being the so-called "most favored nation" clause) control over book prices.

Re:A lot of words (0)

Anonymous Coward | about 2 years ago | (#40129593)

And remember, Apple exerts almost zero (the exception being the so-called "most favored nation" clause) control over book prices.

Seems like this article is in reference to the DOJ's disagreement with your statement. If Apple colluded to fix the prices, they had complete control over the book prices. Derp.

Re:A lot of words (4, Insightful)

PhrostyMcByte (589271) | about 2 years ago | (#40129691)

And remember, Apple exerts almost zero (the exception being the so-called "most favored nation" clause) control over book prices.

Though the result is that consumers got screwed because of it, this is my understanding of it as well.

What I remember is that Amazon basically had the publishers by the balls, dictating somewhat more reasonable prices for ebooks. When Apple came to the market, they specifically worked with the publishers saying "hey, we'll let YOU set the price, so long as you always offer us the best one". The end result is that prices skyrocketed overnight, and today are still far higher than they once were.

Re:A lot of words (4, Interesting)

teg (97890) | about 2 years ago | (#40130023)

Amazon wasn't as much dictating more reasonable prices (for your definition of "reasonable") as "selling at below cost" [salon.com] to build a dominant market position.

Besides, one vendor being able to dictate prices in the market is hardly seen as a healthy market.

Re:A lot of words (5, Interesting)

Richard_at_work (517087) | about 2 years ago | (#40129823)

Before iBooks, I bought a lot of stuff from Ereader.com, and here are some of my comparisons (in GBP)

Revelation [Mass Effect Series Book 1] £2.99 - iTunes price £4.99
Ascension [Mass Effect Series Book 2] £2.99 - iTunes price £4.99
Pandoras Star £4.99 - iTunes price £8.99
Judas Unchained £4.99 - iTunes price £8.99

Those examples were purchased in 2008, the iTunes prices are right now. I could go rough the other 50 or so books I purchased if you wish?

None of the purchases I made on Ereader are currently available for new purchase - I can still download my purchased copies under my account, but you couldn't buy them now.

I think the DOJ have a fairly decent case here.

Re:A lot of words (-1)

Anonymous Coward | about 2 years ago | (#40130151)

Really, all you've proven is that you have terrible taste :p

Re:A lot of words (3, Interesting)

Anonymous Coward | about 2 years ago | (#40129883)

I don't intend to waste my time pulling up research to prove what is already obvious to me. I've been buying ebooks for years. Before the agency model, books were cheap. After it, they were not. Every single book on my 100+ book wishlist on Amazon that has the prices set by the publisher (agency model) is $10+; every single book on my 100+ book wishlist on Amazon that has the prices set by Amazon (pre-agency model) is $7 or less. These are all full length books, and most either literary classics or science fiction.

The DOJ and Apple can headbutt each other in court to actuall prove the claim, but I don't need to do so to know why I would side with.

Re:A lot of words (1)

teg (97890) | about 2 years ago | (#40129969)

That's a lot of words that don't change the fact that virtually every eBook you could ever want to buy costs more now than it did before Apple entered the market, which is the actual problem that the DOJ case intended to address.

Except that if you actually read the words, they claim the exact opposite. I have no data to offer about their claims, but you haven't offered any either. In fact, you seem to be offering what the DOJ offered, anecdotes involving the prices of a tiny number of books, with no analysis at all of the overall market.

And remember, Apple exerts almost zero (the exception being the so-called "most favored nation" clause) control over book prices.

The details of the MFN would be interesting... if it is "you can't sell it cheaper to anyone than to us", it can be defended. That's the publisher's problem if they want to agree to such clauses. However, if they let Apple set the resulting pricing - "noone can sell it cheaper than in the iBook store" - that would be problem; it should certainly be possible for other retailers to demand less than Apple's 30% cut.

Re:A lot of words (0)

Anonymous Coward | about 2 years ago | (#40129989)

And remember, Apple exerts almost zero (the exception being the so-called "most favored nation" clause) control over book prices.

Not yet. But if they could control prices, the prices would go up and you would only be able to read what Apple tells you that you can read. And finally, the authors would get near-zero royalties, the same as artists get with their music. There isn't an shred of benevolence to be found at Cupertino.

Ebook Sales Data (1)

ZombieBraintrust (1685608) | about 2 years ago | (#40130031)

They are not trying the case in the public. When it come time for the trial Amazon will hand over its records and they will clearly show what occurred. They can also go and get B&N and Sony's sales records. Apple is the least likely company to have data on ebook sales prior to the switch to the Agency model. They didn't enter the market till 2010 and they were never a big player in the market afterwords.

Re:A lot of words (5, Interesting)

DesertJazz (656328) | about 2 years ago | (#40129503)

Unfortunately I think the argument that Apple itself isn't responsible will probably be considered true in the end. The book publishers on the other hand can, and should, still get nailed to the wall. Charging as much for an ebook as a physical book is completely off-base. You still have to make the money back on editors, artwork, advertisement, etc., but the physical print, transportation, and storage costs should cause those books to be discounted a good amount. As it is, much of the time you can buy a print edition cheaper than an eBook version on new releases...

Apple certainly deserves some of the blame, but I just can't see the DOJ managing to make it stick against them in this case.

Re:A lot of words (1)

Anonymous Coward | about 2 years ago | (#40129605)

If it weren't for the BS about not being allowed to sell books cheaper through other sources, then it might not be such a big deal. I think that is where Apple might get some blame. It should also be noted that Apple is trying to force retail outlets like Target from carrying the Kindle. Seems pretty anti competitive to me.

Here is a simple question (0)

Anonymous Coward | about 2 years ago | (#40129641)

Even if the claims about Apple were true, how can that be translated to collusion to keep prices high??

How is having a contract that says that if you sell cheaper to other, you must sell cheaper to me in any way keeping the price high? Apple is not the one setting the price at any time.

Re:Here is a simple question (2)

homey of my owney (975234) | about 2 years ago | (#40129805)

Isn't that the EXACT conditions of placement in the US Gov GSA catalog? Promise us best price or you don't get to play.

Re:A lot of words (1, Insightful)

cpu6502 (1960974) | about 2 years ago | (#40129715)

>>>not being allowed to sell books cheaper through other sources..... Apple is trying to force retail outlets like Target from carrying the Kindle. Seems pretty anti competitive to me.
>>>
I other words they are guilty of price-fixing what other stores may sell the ebooks for, PLUS anticompetitive behaviors such as blocking amazon from target. Guilty guilty guilty. I'd like to see Apple gets slapped by the DOJ, even if it's just "Don't do that again," and a 5 year cease-and-desist order like they did with Mcirosucks.

Re:A lot of words (0)

Anonymous Coward | about 2 years ago | (#40129621)

We have a saying in my country : "They are both guilty - the one killing the cow and the one holding it to be killed". Apple became the enabler to make the Agency model real and allow the publishers to raise prices. And that is the key to the case as far as I can see it from above.

The result: After apple, the same kind of e-books had higher prices than before Apple entered the market as prognosticated by Steve Jobs.

To me, that is proof enough, case closed.

Re:A lot of words (4, Insightful)

jbolden (176878) | about 2 years ago | (#40129635)

Book publishers can't afford to get nailed to the wall. A few more pushes and we lose the industry. They are shrinking rapidly and having a tough time staying afloat. They need either:

a) Very high margins on books selling 2k-50k copies
b) Lots of inexpensive books selling 100k copies

instead the market is moving towards a few books selling millions and many books selling hundreds of copies.

Re:A lot of words (2)

dark12222000 (1076451) | about 2 years ago | (#40129735)

Book publishers can't afford to get nailed to the wall. A few more pushes and we lose the industry. They are shrinking rapidly and having a tough time staying afloat

Is this actually surprising? This is sort of how it works. Publishers fail to adapt to a new market, they fall under the bus and get pulled apart. Adapt or die.

This doesn't mean there won't be publishers in the future. It means there will be new publishers who understand the new market.

That being said, I haven't seen a lot of proof of publishers having any trouble, beyond a lot of them saying "We need more money! Give us your money!". Even the smaller publishers have been hanging around just fine as far as I can tell. If anything hurt them, it was Borders going out of business and leaving behind a lot of debt.

Re:A lot of words (5, Insightful)

ColdWetDog (752185) | about 2 years ago | (#40129737)

There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary to public interest. This strange doctrine is not supported by statute or common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back.

R.A. Heinlein

Re:A lot of words (2)

cpu6502 (1960974) | about 2 years ago | (#40129761)

>>>instead the market is moving towards a few books selling millions and many books selling hundreds of copies.

False.
  ebook market leads to more equal distribution across many, many books.

Re:A lot of words (1)

teg (97890) | about 2 years ago | (#40130041)

False. ebook market leads to more equal distribution across many, many books.

[citation needed].

Re:A lot of words (2, Informative)

Telvin_3d (855514) | about 2 years ago | (#40129673)

You still have to make the money back on editors, artwork, advertisement, etc., but the physical print, transportation, and storage costs should cause those books to be discounted a good amount.

How much do you think it costs to print a book? Let's look at it this way. You can go out and buy a laser printer that will do 5c/page for double sided text. Each double sided paper equals four pages in a hard cover book. 400 pages in a typical book, or printing costs of about $5. Done at home on consumer equipment. Yes, you still need binding and shipping and such but I have to figure that a professional print house can do the actual printing for cheaper than I can do it at my computer desk so it would all balance out.

So the total cost savings for a publisher by going digital is likely more than $5 but certainly less than $10. And most digital copies tend to be about $5-$10 cheaper than the hardcover. Yes, there are exceptions but on the whole I'd say it tracks pretty well.

Re:A lot of words (1)

cob666 (656740) | about 2 years ago | (#40129717)

Forget about comparing the price of hard cover books to ebooks, try comparing the cost of paperback books to ebooks. In almost EVERY case the ebook will cost more than the paperback book, that is just absurd.

Re:A lot of words (0)

Telvin_3d (855514) | about 2 years ago | (#40129773)

I agree that comparing paperbacks to e-books is absurd. Even considering it is silly.
Paperbacks only get published if a book has already made a profit on the hardcover. No one makes their money on the paperback. It is simply a way to soak up a little extra profit after the bills have been paid.

Paperbacks are a secondary market. E-books are a primary market. There can be no comparison.

Re:A lot of words (2)

cpu6502 (1960974) | about 2 years ago | (#40129873)

Then I'll sell my kindle and just buy cheaper paperbacks from now on. The ebook market can die-out if they're going to charge hardcover prices for them.

Re:A lot of words (1)

Telvin_3d (855514) | about 2 years ago | (#40130117)

Fine. You can wait a year or so and pay less to read copies of those books that make it to paperback. Some of us will buy the books that interest us as they come out for somewhat more. Books that enough of us early readers like will eventually filer down to you. Everybody wins.

Re:A lot of words (2)

cob666 (656740) | about 2 years ago | (#40130115)

When a book is available in paperback, why should I be expected to pay hardcover prices for the ebook. That's what I was referring to and if the paperback actually IS available then you SHOULD make the comparison between the two.

Re:A lot of words (1)

donny77 (891484) | about 2 years ago | (#40129841)

Why do hardbacks cost more than paperback? The extra cost of the "cover" is probably less than a dollar, yet you've had no problem paying it before and never complained. Why? Maybe because the hardcover book will last LONGER than the paperback and is easier to take care of. Just like the ebook. You are paying more for a better product. Production costs are largely irrelevant.

The question is, are they charging more than a fair price? I think the answer to that is they are not. So what is the problem? Our economy has gone down the tube because everyone is hung up on price. We complain when they ship our jobs overseas, but we want to pay fractal pennies on the dollar for every item in profit. I see no collusion in ebook pricing. I see a wide range of prices for ebooks. If you are unhappy with the pricing, don't buy them.

Re:A lot of words (1)

BradleyUffner (103496) | about 2 years ago | (#40129881)

Why do hardbacks cost more than paperback? The extra cost of the "cover" is probably less than a dollar, yet you've had no problem paying it before and never complained. Why? Maybe because the hardcover book will last LONGER than the paperback and is easier to take care of. Just like the ebook. You are paying more for a better product. Production costs are largely irrelevant.

Hard covers are also generally larger in size, which means more paper for the pages. This also increases the physical volume which increases the transportation and storage costs. They are also heavier, which increases the transportation costs even more.

Re:A lot of words (1)

assassinator42 (844848) | about 2 years ago | (#40129919)

It remains to be proven that eBooks will last longer.
If your eReader breaks and the seller has gone out of business or just decided to not let you download the books anymore, you loose the books completely.

Re:A lot of words (0)

Anonymous Coward | about 2 years ago | (#40129789)

You left out costs for the physical bookstore, which are included in the price of a physical book.

Re:A lot of words (1)

Telvin_3d (855514) | about 2 years ago | (#40129869)

Not really. Apple and other sellers take 30% of the sale price. Can't be that much different than the margins/costs for a physical bookstore.

Re:A lot of words (0)

Anonymous Coward | about 2 years ago | (#40129973)

That's because Apple is easier to pick on than Amazon. Amazon has years and years of experience of dealing with government bureaucrats and the DOJ going after Amazon would be extremely humiliating to them.

Re:A lot of words (1)

Pinky's Brain (1158667) | about 2 years ago | (#40130037)

Yeah sure, the 30% cut being exactly the same as Apple wants on everything else sold through them is a complete coincidence ... the fact that items sold through other venues can't be offered cheaper exactly like their policy for apps in their appstore with in app purchasing ... all a complete coincidence.

The agency model has DESIGNED BY APPLE all over it ...

Re:A lot of words (2)

Ungrounded Lightning (62228) | about 2 years ago | (#40130055)

Charging as much for an ebook as a physical book is completely off-base. You still have to make the money back on editors, artwork, advertisement, etc., but the physical print, transportation, and storage costs should cause those books to be discounted a good amount.

On the other hand, a hardcopy book is an asset on which the publishers and booksellers can be charged an inventory tax. Thus it is often to their financial advantage to actually destroy them rather than hold them in the hope of future sales. Holding them effectively becomes a liability rather than an asset (though the tax man doesn't see it that way). This is one reason it becomes hard to find many books after a year or so. It's also a reason for deep discounts on books to clear inventory.

(Interestingly: Science Fiction is an exception. It has a track record of slow long-term sales - for decades - that makes it advantageous to hang on to physical copies for future sales.)

Electronic books don't have this problem. The publisher has only one copy (plus backups) and creates additional copies for sale on-the-fly.

As it is, much of the time you can buy a print edition cheaper than an eBook version on new releases...

When the value of the hardcopy book has actually gone negative, selling it for any price above the transaction cost is better than pulping it. Meanwhile, operating a major Internet-connected business server operation is not cheap.

Eliminate the inventory taxes on books, bringing the cost of holding onto a book until it sells down near the cost of the storage space and environmental control, and you should see a drastic change in hardcopy book availability and pricing structure. (Assuming electronic books haven't substantially displaced hardcopy by then.)

Re:A lot of words (4, Interesting)

cpu6502 (1960974) | about 2 years ago | (#40129579)

The DOJ will demolish Apple's filing by saying, "That means 1 in 10 ebooks were not sold in Amazon, but on other magazine and book websites. So there was a healthy market of multiple e-stores competing with one another to lower the prices of this product, until Apple arrived on the scene and colluded with the publishers to engage in price-fixing" --- When the record companies tried this with CD sales, the case found Walmart was part of the collusion, and just as guilty of the crime. Same applies to Apple mart.

Re:A lot of words (2)

Znork (31774) | about 2 years ago | (#40129613)

That's entirely possible, but in that case it's because Apple brought a higher end market with them. Revenue with monopoly pricing is maximized by setting prices in relation to what the market can bear. Copyright is not a free market and filing antitrust suits over pricing or price collusion is specious; there is no free market pricing, there is no competition and that is by design.

If the DOJ was at all interested in competition they'd work to abolish copyright and let the Pirate Bay put some competetive pressure on the market.

Re:A lot of words (1)

cpu6502 (1960974) | about 2 years ago | (#40129899)

>>>Copyright is not a free market and filing antitrust suits over pricing or price collusion is specious

It worked well when they sued the record companies for violating Sherman Antitrsut law on price-fixed *copyrighted* CDs. The record companies were punished. So the lawsuit is not "specious"

Re:A lot of words (1)

Anonymous Coward | about 2 years ago | (#40129615)

Actually, no. The DOJ set out to see if Apple did something illegal. It doesn't matter if ebook prices went up or not if Apple didn't do anything illegal.

Re:A lot of words (5, Insightful)

k4hg (443029) | about 2 years ago | (#40129671)

The books were cheap because Amazon was selling them at a loss to prevent the entry of competition. Amazon has a long-term strategy to work on razor-thin margins driving out all competition. In the last quarter they made about 1% of gross- they made a penny out of every dollar people spent. No small or medium business in their right mind would enter a market like that. So overall Amazon does not turn a lot of profit, but their stock is valuable (much more than their profit would justify) because investors expect that once they have completed driving all their competitors out of business they will raise their margin (meaning the prices you pay go up). So you are going to pay more, a little bit now because of the agency model and most favored nation status thanks to Apple, or a lot more later when no one but Amazon has physical or electronic books to sell you.

Re:A lot of words (0)

cpu6502 (1960974) | about 2 years ago | (#40129937)

>>>to work on razor-thin margins driving out all competition

So? It is not illegal to operate a monopoly based-upon selling lower prices than any one else. In fact that's how the market is supposed to work: Competition acts like an invisible hand to lower prices & benefit the consumer.,

It is only illegal to use the monopoly to drives prices higher and rape the customer. There is ZERO evidence that amazon will or ever has done that.

Re:A lot of words (0)

Paradise Pete (33184) | about 2 years ago | (#40129739)

It wouldn't have lasted. Amazon was going to sell at a loss for only as long as it took to drive other sellers out of the market. Then things would get much worse.

If, for instance, China did the same thing until US companies collapsed, the government would be doing everything it could to stop it. But instead they are taking the other side.

It was not a legitimate market before. Now it is. Amazon is not at a disadvantage, they simply have lost their stranglehold. They wanted to do what people scream about Walmart doing. Now they can't.

Re:A lot of words (1)

cpu6502 (1960974) | about 2 years ago | (#40129945)

>>>mazon was going to sell at a loss for only as long as it took to drive other sellers out of the market. Then things would get much worse.

So you wan to file a lawsuit against Amaozn on theBELIEF iof some future event? You have some Precrime telpaths stashed-away somewhere? You cannot punish a company for thigns they have not done yet, you stupid fuck.

Re:A lot of words (0)

Anonymous Coward | about 2 years ago | (#40130121)

GP isn't talking about punishing Amazon.

Not a defense. (0)

Anonymous Coward | about 2 years ago | (#40129455)

Apple also ignores the fact that in a price fixing case, you do not have to show any level of market power, competition, or monopoly existence, thus making Apple's response irrelevant.

"This ignores a simple and incontrovertible fact" (0)

Anonymous Coward | about 2 years ago | (#40129481)

Namely that Ananymous Reader is an astroturfer.

Bullshit (0)

Anonymous Coward | about 2 years ago | (#40129509)

The publishers could have entered the market at any time and competed with Amazon directly, the fact that they want to go through gateways is their own problem and doesn't excuse price fixing.

Re:Bullshit (0)

Anonymous Coward | about 2 years ago | (#40129587)

Companies don't move unless they see a market. Amazon started a market, and Apple built on it. Now that a market is made, companies want to move in. Thus is the issue here. It isn't as easy to move in as they want and claim foul.

Small publishers needed (3, Interesting)

utkonos (2104836) | about 2 years ago | (#40129549)

We need some independent publishing houses, and we need them fast. The content distribution should not be that difficult, as long as these indie publishers are able to publish DRM-free books in multiple formats. Make your books available in all the major formats (kindle/epub), and you will kill Amazon, Apple, Google, and anyone else. The question is, what will those companies do to stop you?

Re:Small publishers needed (2)

jbolden (176878) | about 2 years ago | (#40129657)

There are plenty of independent publishers, though the number os shrinking. The content distribution isn't difficult people know how to create DRM free versions of books.

To kill Amazon, Apple, Google they would need to sell a very very large number of copies. What evidence do you have that DRM free mid quality books will do that.

Re:Small publishers needed (2)

Telvin_3d (855514) | about 2 years ago | (#40129729)

Independent from what? Even the biggest publishers have a fairly flat structure and if there is ANY media industry known for it's small time producers it's the publishing industry. If they can convince someone that there is readership (or are willing to put up their won money) anyone has been able to get anything published since as long as the printing press has existed. There are no gatekeepers in publishing and never have been.

And the publishers running their own stores is a bad idea in the same way that one of the music labels deciding to sell only through their own outlets would be a dumb idea. No one cares who publishes a book. They simply have the (reasonable) expectation that they can find it in a book store.

For that matter, how would a publisher run their own personal book store any different than Apple is? They already decide what content to list and set their own prices.

Oxford Comma matters (2, Interesting)

nastav (2611511) | about 2 years ago | (#40129595)

From Page 6, Bullet #7 (emphasis mine) "This lawsuit wrongly seeks to condemn Apple based on the Government’s apparent dissatisfaction with the impact of competitive entry, demand stimula- tion and innovation (ignoring significant indicia of consumer and market benefit), not based on any anticompetitive conduct by Apple. This is contrary to law and sound economic policy." "This is contrary to law and sound economic policy" means ( "This is contrary to law" ) AND ( "This is sound economic policy" ) When written correctly, with the Oxford Comma in place, it would have the intended meaning: This is contrary to law, and sound economic policy Yeah, parts of Oxford University don't use the serial comma any more, and some even actively recommend against it's use [mediabistro.com] . Doesn't mean they are right though.

Re:Oxford Comma matters (0)

cpu6502 (1960974) | about 2 years ago | (#40129693)

Who is to say what is "right"? I can't help wondering if you would be one of those who reads Chaucer or other Mid-English works and complain that the writers shoud not be using double negatives. Or that he misspelled wife as "wyf". English mutates over time, and is not fixed like math.

If it was me, rather than using a comma per the dictators at stuck-in-the-past Oxford..... a comma that could easily be overlooked by the reader..... I'd use this alternate: "This is contrary to law and to sound economic policy."

Re:Oxford Comma matters (2)

nastav (2611511) | about 2 years ago | (#40129759)

Who is to say what is "right"?

When something can be interpreted in two different ways, with each of those interpretations implying a diametrically opposite meaning, it's reasonably characterized as "wrong". Clarity and unambiguity are two ways to be "right" - there should be no dispute as to these. If there are many ways to attain clarity and precision, then they may all very well be "right", but they aren't all equal. Some would be clearer and more precise than others, and it would suit us well to choose those.

English does change over time, so judging old writing based on today's standards doesn't make sense. But it's ok to judge today's writings based on today's notions of clarity and precision.

I'd use this alternate: "This is contrary to law and to sound economic policy."

This alternate is certainly better, IMO, than my own recommendation to use the Oxford Comma.

Re:Oxford Comma matters (0)

artor3 (1344997) | about 2 years ago | (#40129909)

While I agree with you on the Oxford comma, there's a better way of fixing this sentence: get rid of the over-reliance on parallelism. As it stands the "This is contrary to" is mirrored across both halves of the phrase, but readers might only apply it to the first half. So reduce the paralleled phrase by one word, making the sentence "This is contrary to law, and to sound economic policy." Now there's no way to misread it.

Re:Oxford Comma matters (0)

Anonymous Coward | about 2 years ago | (#40130085)

There are possible ambiguities with or without the serial comma, and both options are considered correct. What is not ambiguous is that you are a pedantic pain in the ass.

Re:Oxford Comma matters (0)

jcorno (889560) | about 2 years ago | (#40130093)

1) That's not an Oxford comma.

2) Your "corrected" sentence makes the problem worse, since it seems like you should pause at the comma.

If you're going to make an off-topic grammar rant, at least make sure it's correct.

Publishers accused Amazon of predatory pricing (0)

Anonymous Coward | about 2 years ago | (#40129723)

In an ordinary, competitive market, a producer wholesales a good to multiple retailers and the retailers resell the good at an above-wholesale price. The wholesalers used to be barred from setting the price the retailers could price the good at though that's changed somewhat over the past 30 years.

In the eBook market, Amazon controls a majority chunk of the market since they were the first to provide a reader at a price most people were willing to pay. Prior to Amazon, Sony and a few other manufacturers were selling readers at substantially higher prices and few people were buying.

Amazon did something else. To promote the Kindle, they sold eBooks at below wholesale prices. Amazon is no stranger to this strategy as it views the loss on each sale as the cost of building their brand. Moreover, Amazon is in a position to underwrite losses in the eBook market with profits made from sales of other goods on their website.

The publishers view Amazon as a direct threat to their business. No business wants to have a single customer and if Amazon destroyed the brick and mortar business and destroyed any online competition, eventually the only place you could buy a book would be Amazon.

When Apple came along the publishers thought they might be able to build a defense against Amazon.

The irony of course is Apple is doing the exact same thing to software publishers that Amazon is doing to book publishers - squeezing them out.

Cory Doctorow's essay A whip to beat us with [publishersweekly.com] describes how DRM is screwing publishers and consumers alike.

Look out (1)

PopeRatzo (965947) | about 2 years ago | (#40129889)

The Department of Justice better be careful. Apple can buy or sell them anytime it wants.

What's that? "Too late", you say?

What was the original submitter smoking (0, Flamebait)

bl968 (190792) | about 2 years ago | (#40129967)

I can see by this submission the Apple's law firm reads Slashdot. The submissions text is so far out in left field It's not even funny! Reading the actual court filings you don't come up with the fact that Apple tore anything to shreds, much less the government's case. Apple does try to defend itself and its actions but that is to try to defend the indefensible. The government has damning words by Apple's own Steve Jobs and in spite attempts by Apple to minimize the effect of those words. The real world results prove the governments case. In my opinion.

Apple deliberately misleads the court in its filings claiming that Amazon Kindle owners can only buy books from Amazon. This is the same as suggesting that iPad owners can only buy books from Apple. Apple ignores and myriad of smaller e-book competitors, I guess they just beneath Apple's notice. I have purchased e-books from many sources as sometimes the book I'm looking for is not simply not available from Amazon, so I have to use the excellent Calibre program to convert and manage my non-Amazon e-book purchases, as well as to load the books onto my device. It serves this function quite well.

Even when Amazon was the primary large e-book vendor on the Internet, there was nothing preventing publishers from maintaining their own storefronts for people to buy their e-books directly from them at close to the wholesale price that they charge Amazon, indeed, this would've made a lot of sense.

I've written on Slashdot in the past that the price of electronic goods are much less than those of physical goods. With electronic goods. You don't have the rights of printing, binding, shipping, and handling returns. While yes, the publishers who have cost in editing a manuscript, creating artwork, these costs, they would've paid anyway for the print version of the book. Once a single e-book is created by the publisher. You can distribute it an unlimited number of times. So the publishers make nearly a 100% profit on electronic sales. Consumers instinctively know this, and expect to pay much less. this desire for higher prices rivaling those of print or electronic version has significantly impeded the vibrant and competitive e-book marketplace consumers should have been able to expect.

The real crime that the publishers feel that Amazon has committed and needed punishment for was by providing a mechanism for small independent authors to get their works to market. I have read many of these $1-$2 e-books, and despite a few disappointments have been relatively happy with the experience.

What Apple has done with their anti-competitive in spite of their claims to the contrary, most-favored-nation status is to ensure that publishers must control the prices that they charge other vendors for the books, in order to account for Apple's most-favored-nation status and agency fee. This has the intended effect of raising the costs for e-books for consumers by preventing publishers from being able to choose to discount the retail price on new release books and in doing so causing harm to consumers. Which is the heart of the government's case. Walmart was found guilty a price-fixing, along with music publishers; and Apple will be too. I can't wait!

Re:What was the original submitter smoking (0)

bl968 (190792) | about 2 years ago | (#40129985)

Sorry for the typos the few spots are used to my voice dictation software to write this, still got a lot to learn about using it.

It's all about the martket (1)

jdkc4d (659944) | about 2 years ago | (#40130043)

You know, All of this is kind of silly. We all know what's going to happen here. The printers raise their rates to handle the reduced amount of printing they are doing. In order to cope, they publishers have to raise their rates. If they raise the price on the paperbacks, no one will buy them, so they raise the price of the ebooks, driving folks to buy more paperback books cause they are cheaper. As people make the switch back to paperbacks, the cost of the ebook will go down for the same reason.

We are talking about a market that in the grand scheme, is really just starting. Think about how long books have been around, how long people have been selling books. Books won't be going anywhere for a long time. I think that a few things need to happen yet with ebooks before we can really see a change. A universal reader needs to be created and a universal drm free format needs to be created. I need to be able to walk into any store, and purchase an ebook, and that book needs to be able to open on any and all devices that I have. And a real method needs to be created for sharing ebooks. Finally, I think all these technology companies apple and sony, and google, need to get their hands out of the book/ebook market and get back to making devices and let the booksellers publishers figure this one out.

At the end of the day, people as a species will always love stories, and people will continue to consume stories in which ever way they are most comfortable with. If it were up to me, I'd say, just price them all the same. Hardback, paperback, ebook, audio book, whatever. And lets see where the market takes us.
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