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Apple E-book Price-Fixing Trial Begins

timothy posted about a year ago | from the arrogance-of-power dept.

Books 213

An anonymous reader writes "Technology giant Apple is to begin its defence against charges by the US government that it tried to fix the prices of e-books. The iPad-maker is accused of working with publishers in 2009 to set prices in an effort to compete in the e-book market dominated by Amazon. Quotes from Steve Jobs' official biography have been cited as evidence in the case."

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213 comments

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GIVE APPLE THE NEEDLE !! (-1)

Anonymous Coward | about a year ago | (#43894219)

Don't need their kind round here no more !! No more !!

Re:GIVE APPLE THE NEEDLE !! (3, Funny)

Big Hairy Ian (1155547) | about a year ago | (#43894329)

Ah In Jobs we trust :)

Re:GIVE APPLE THE NEEDLE !! (1)

Lumpy (12016) | about a year ago | (#43894945)

I know it's trendy to hate apple, but the fault lies at the feet of the extremely greedy publishers.

An e-book should be MAX 50% the price of the paper book.

Re:GIVE APPLE THE NEEDLE !! (1)

Anonymous Coward | about a year ago | (#43895231)

Apple approached the publishers not vice-versa, look it up on your ipad fanboi.
They are a greedy self-serving company more than most, there charitable donations until recently were an extremely low percentage for a company of their size.

 

Re:GIVE APPLE THE NEEDLE !! (0)

Anonymous Coward | about a year ago | (#43894411)

After they pay their taxes and return the money to people who bought overpriced eBooks.

Re:GIVE APPLE THE NEEDLE !! (0)

Anonymous Coward | about a year ago | (#43894643)

And overpriced devices.

Re:GIVE APPLE THE NEEDLE !! (2)

HappyPsycho (1724746) | about a year ago | (#43894707)

Books I understand, the people who bought iDevices paid a premium fully knowing cheaper "viable" alternatives existed. I don't follow why they should get anything back, those were fully informed decisions.

P.S. I prefer android personally.

Re:GIVE APPLE THE NEEDLE !! (1)

Anonymous Coward | about a year ago | (#43894503)

"Technology giant Apple is to begin its defence against charges ..."

Doesn't the prosecution present their case before the defence begins?

Re:GIVE APPLE THE NEEDLE !! (2, Interesting)

Plumpaquatsch (2701653) | about a year ago | (#43894615)

"Technology giant Apple is to begin its defence against charges ..."

Doesn't the prosecution present their case before the defence begins?

Normally yes, but the DOJ has already presented its case to the public, and the judge has already decided. Might as well go right for the appeal.

cheaper books? (5, Insightful)

zappa88 (2938615) | about a year ago | (#43894259)

Yes please.

Re:cheaper books? (0)

Anonymous Coward | about a year ago | (#43894285)

Here ya go. [kat.ph]

Re:cheaper books? (0)

zappa88 (2938615) | about a year ago | (#43894305)

that's just theft , at least with apple the writers get a cut of the $

Re:cheaper books? (3, Informative)

Anonymous Coward | about a year ago | (#43894361)

No it's not, it's copyright infringement.

Re:cheaper books? (1)

loonycyborg (1262242) | about a year ago | (#43894389)

Don't be so sure about $.

Re:cheeper bookes? (-1)

Anonymous Coward | about a year ago | (#43894441)

PH is Vietnam. Expect it. No. Demand it. Damn it? Any who do not condom island country. It is not like it has a choice. Is it not better to steal from rich and give away than to not and pay? Obladiobladumlifegoesondadadadada.

Re:cheeper bookes? (4, Informative)

marsu_k (701360) | about a year ago | (#43894743)

I think the word you're looking for is "condone". Condoming an island country could prove to be extraordinarily difficult.

Re: cheeper bookes? (2)

niftydude (1745144) | about a year ago | (#43894815)

Condoming an island country could prove to be extraordinarily difficult.

How hard could it be? It's a reasonably small island, and latex grows on trees!

Re: cheeper bookes? (4, Funny)

enrevanche (953125) | about a year ago | (#43894893)

It would be easier if it was hard!

Re:cheeper bookes? (1)

moronoxyd (1000371) | about a year ago | (#43895061)

What island country are you talking about?
If you mean Vietnam, let me be the first to tell you that Vietnam is not an island. Vietnam lies on mainland asia, just south of China.

They'll be fine. (1)

Nerdfest (867930) | about a year ago | (#43894307)

They'll be fine, with maybe a small fine of much less than the money made from the deals. At least they won't likely get their 'pet' judge this time.

publishers (-1)

Anonymous Coward | about a year ago | (#43894349)

are evil scum

Still confused (2)

MatthewCCNA (1405885) | about a year ago | (#43894363)

If Apple doesn't set the prices, how can they fix the prices?

Re:Still confused (5, Insightful)

bloodhawk (813939) | about a year ago | (#43894373)

They set an artificial floor price through contracts that ensured they can't be undercut by the competition. Price fixing doesn't just refer to the actual price, it refers to setting/fixing of minimum or maximum prices in an industry as well.

Re:Still confused (-1, Offtopic)

roman_mir (125474) | about a year ago | (#43894451)

Just another case of government shakedown. It's amazing how easy it is to manipulate the public [latimes.com] to make the public believe that there is anything behind any of this than just a case of politicians forcing a company to pay more bribes through the legalised bribery system.

This is about bribes, corruption, government corruption, politicians fishing for money by using the power that they are not actually authorised to have at all. There is no place for government in the market place telling others how to price anything.

How about DOJ actually looks at the REAL PRICE MANIPULATION AT THE FEDERAL RESERVE BANK?

The money. The real price manipulation. Half of every transaction is fixed at an artificial level by the government and you all are confused into thinking that this illegal (AFAIC, because it's unconstitutional) shakedown is something to concentrate on.

Pathetic.

Re:Still confused (3, Funny)

Anonymous Coward | about a year ago | (#43894577)

Wrong choir, son.

Re:Still confused (5, Insightful)

Teun (17872) | about a year ago | (#43894689)

There is a place for government (you and me!) in the market place, it's about assuring fair play, a level playing field and preventing abuse by monopolies.

Would you leave it to companies like Apple or Google they could, like in this example, brute force their ways on smaller business partners.

When you don't trust your politicians, don't complain here but go voting.

Re:Still confused (0)

Anonymous Coward | about a year ago | (#43894933)

When you don't trust your politicians, don't complain here but go voting.

And if your not given options of politicians you trust? I have not had the option of a politician I like in well over 2 decades... What is the point of voting if your only options are bad and worse?

Re:Still confused (0)

roman_mir (125474) | about a year ago | (#43895009)

No, I completely disagree with you, there is no place for government in any price setting decisions and schemes.

It's not up to the government to fix any of these real or perceived problems, it is up to the market place. If Apple truly charges 'too much', then it is nothing but an opportunity for an enterprising individual to start a competing business and provide better prices.

At the end of the day, if everything else fails that's what illegal sharing of copyrighted materials (piracy) is for, and again, government must not be allowed to make it illegal in the first place.

Copyrights and patents are the real monopoly provided by the governments.

The so called 'anti-monopoly' stance by any government in the world at any moment in time is nothing but corruption and abuse of power.

Re:Still confused (0)

Anonymous Coward | about a year ago | (#43895433)

No, I completely disagree with you, there is no place for government in any price setting decisions and schemes.

You disagreement is irrelevant. What places government have is also decided by the market, not the decree of roman_mir.

If Apple truly charges 'too much', then it is nothing but an opportunity for an enterprising individual to start a competing business and provide better prices.

Likewise, if government is sticking its head into places "too much", an enterprising individual would start a competing government. Or they pick up arms and take down the oppressive government. Or some other government invades.

It is only naive idealism to think that the least meddling government will always win. In fact, most of the time it doesn't. Even the glorious 19th century US succumbed to market forces where the people say they prefer security and bread & circuses over freedom.

Not about damages (1)

ZombieBraintrust (1685608) | about a year ago | (#43895447)

The Department of Justice is not seeking financial damages from Apple if the government wins the case.

http://www.tuaw.com/2013/06/03/apple-doj-ebook-price-fixing-trial-begins-today/ [tuaw.com]
Not really a shakedown for bribes. Your forgetting government power also include contract law. Apple was seeking to control prices with contracts. If the courts enforced those contracts then they would be shutting down competition.

Re:Still confused (0)

Plumpaquatsch (2701653) | about a year ago | (#43894657)

They set an artificial floor price through contracts that ensured they can't be undercut by the competition. Price fixing doesn't just refer to the actual price, it refers to setting/fixing of minimum or maximum prices in an industry as well.

Which makes Amazon just as guilty, because they use the same clause - only more bend to their favour.

Re:Still confused (3, Insightful)

Anonymous Coward | about a year ago | (#43894677)

You won't get any argument from me that Amazon isn't just as bad, but this isn't kindergarten and hence a valid excuse isn't "but muuuuum he did it first". Apple are guilty as hell here and need a huge kick in the arse, Amazon most likely need the same.

Re:Still confused (4, Insightful)

Richard_at_work (517087) | about a year ago | (#43894739)

The difference is, there is no evidence Amazon was telling the publishers they couldn't sell their books cheaper elsewhere - that's the crux of the issue with the way Apple was doing it here.

Re:Still confused (1)

Sockatume (732728) | about a year ago | (#43895513)

Precisely. In the EU, Apple and the publishers have settled to the authorities' satisfaction without having to do away with the agency model. The model itself is not the issue.

Re:Still confused (5, Informative)

Sockatume (732728) | about a year ago | (#43894387)

Apple's iBook publishing deals included a clause that no other eBook outlet could get a better price than Apple. So, yes, they were engaged in price-fixing that directly favoured them as a seller. In a wholesale bookselling model that's not quite so terrible - you can compete by eating into your margins - but in an agency model where the selling price is set by the publisher isn't allowed to be any lower than on iBooks, you're fucked.

Re:Still confused (-1)

Anonymous Coward | about a year ago | (#43894449)

Apple's iBook publishing deals included a clause that no other eBook outlet could get a better price than Apple. So, yes, they were engaged in price-fixing that directly favoured them as a seller.

The case has nothing to do with that. Do you really think that going to a supplier and saying "I'll buy huge quantities at a reasonable price, but if you sell to someone else for less then I instead get that price" is in any way illegal or even unreasonable?

Re:Still confused (5, Insightful)

Yoda's Mum (608299) | about a year ago | (#43894469)

Except that's not what's happening here. It's "I'll sell quantities at a higher price you choose at a fixed margin, but you can't sell via anyone else at a lower price or better margin". That's why it's anti-competitive; the new system they put in place prevents their retail competitors from ever competing on price. To me, that seems entirely unreasonable.

Re:Still confused (0)

Anonymous Coward | about a year ago | (#43895283)

How is one competitor demanding price agreements anti-competitive? Are sales anti-competitive?

Could the book mfgrs just walked away? Yes, yes they could have. But Apple offered them a better deal than any other retail outlet was and they jumped at it. That's actually called competition.

Re:Still confused (3, Insightful)

Anonymous Coward | about a year ago | (#43894487)

Actually yes it is illegal and unreasonable. You can't set contract terms that prevent your competition from undercutting you with a better deal or from them being willing to make less money than you. You are in effect by establishing such a contract engaging in price fixing as you are setting a minimum price.

Re:Still confused (1, Interesting)

Plumpaquatsch (2701653) | about a year ago | (#43894863)

Actually yes it is illegal and unreasonable. You can't set contract terms that prevent your competition from undercutting you with a better deal or from them being willing to make less money than you. You are in effect by establishing such a contract engaging in price fixing as you are setting a minimum price.

http://feldmanfile.blogspot.de/2012/04/most-favored-nation-landmine.html [blogspot.de]

It's very important to understand that Apple isn't the only eBook retailer with a "Most Favored Nation" clause; both Amazon and Barnes & Noble have them as well. In fact, Amazon is far more aggressive at exercising its clause than the other two retailers. Amazon regularly scans the prices for eBooks at competitive websites and will automatically drop the price of any title that it finds lower at another site, without giving notice to the publisher (or, for a self-published eBook, the author.)

... Just getting Apple to get rid of its "Most Favored Nation" clause without doing something about Amazon and Barnes & Noble isn't going to fix the problem.

Re:Still confused (1)

Anonymous Coward | about a year ago | (#43894913)

you don't justify one evil by showing similar evil being committed by others. They all need to be crucified. Apple is first, the others need to follow.

Re:Still confused (0)

Anonymous Coward | about a year ago | (#43895321)

Pretty sure your order of companies is ass backwards. Apple is late to the ebooks game.

Re:Still confused (5, Informative)

Daemonik (171801) | about a year ago | (#43895139)

For non-agency titles (in other words, titles that Amazon purchases to sell under the wholesale model,) Amazon reserves the right to set and change the price as it sees fit, although it will still remit the same wholesale amount back to the publisher or author. If Amazon drops its price for a title below that of Apple or Barnes & Noble, even without the knowledge of the publisher or author, Apple and Barnes & Noble have the right to match Amazon's price.

Read that through again. The blogger you are sourcing is misrepresenting what a "Most Favored Nation" agreement is. When a retailer, such as Amazon, buys a product at wholesale, either a book or a pipe fitting, they have the right to set whatever price they wish for that item. If they're cutting into their own profit that doesn't matter and is not illegal, the manufacturer/distributor/publisher was paid their asking price. This is not a MFN clause, it's standard retail practice. Apple's deal changed that. Retailers could no longer set their own prices. If they didn't charge the price the publishers demanded then they would not be sold any books, and several publishers did withhold books from Amazon until they agreed to their scheme. They could no longer use pricing as a competitive tool against Apple, which is why Apple is in court and not Amazon.

Re:Still confused (1)

moronoxyd (1000371) | about a year ago | (#43895155)

Amazon regularly scans the prices for eBooks at competitive websites and will automatically drop the price of any title that it finds lower at another site, without giving notice to the publisher (or, for a self-published eBook, the author.)

Ok... can you explain how Amazon cutting their own profit is price fixing?

And why Amazon should give the publisher notice?
I assume that with the big publishers, Amazon has a deal where the company pays a fixed price for any sold book.

This is different with books self-published through Amazon. Those authors probably get a percentage of the profits. In this case (and only in this case) Amazon hurts the profits of the authors.

Re:Still confused (1)

Sockatume (732728) | about a year ago | (#43895541)

I don't think you know what a most-favoured-nation clause is.

Re:Still confused (5, Insightful)

Rockoon (1252108) | about a year ago | (#43894545)

The case has nothing to do with that. Do you really think that going to a supplier and saying "I'll buy huge quantities at a reasonable price, but if you sell to someone else for less then I instead get that price" is in any way illegal or even unreasonable?

Apple didnt organize fixed wholesale pricing with publishers. They organized fixed retail pricing via publishers.

Not just illegal.. obviously illegal. The fact that you dont see that tells us something about you...

Re:Still confused (0)

Anonymous Coward | about a year ago | (#43895345)

Every comment says 'obviously illegal'.

No comment actually says why.

Re:Still confused (1)

Sockatume (732728) | about a year ago | (#43894639)

In that it sets a single price across the market, it's obviously anticompetitive. Now, whether anticompetitive actions are a bad thing may be a matter of debate for you, but that's not the issue at hand.

Re:Still confused (3, Interesting)

Daemonik (171801) | about a year ago | (#43894641)

Don't forget that Apple controls the apps through their app store and competing book reading apps can't purchase e-books through their app like Apple's, you have to open a web browser and go to their webstore to make a purchase.

Re:Still confused (3, Informative)

Sockatume (732728) | about a year ago | (#43894687)

You can, in principle, sell content through your app using the in-app-purchasing API*, but Apple has to get a 30% cut. Under most "agency model" ebook deals, the publisher gets 70% of the purchase price, leaving the retailer with zero. (This is why the only thirdparty content stores you'll find on the App Store are publisher outlets like Dark Horse, and not retailers/resellers.)

*The IAP API is horribly unsuitable for that purpose, but that seems rather moot.

Re:Still confused (1)

the_B0fh (208483) | about a year ago | (#43894733)

You do realize that Amazon is paying $12.99 for new ebooks, and selling them at $9.99 right?

So... what changed now that Apple has a deal with the publishers to sell the book for $12.99 and gets 30% of it?

Can amazon stop selling it at $9.99 regardless of what they paid for it? Or did something else change?

Re:Still confused (1)

Sockatume (732728) | about a year ago | (#43894857)

Yes, something changed. Previously Amazon had a "wholesale" contract with most ebook publishers, meaning Amazon buy the books for $X and sell for $X+Y. The publisher gets $X, and the retailer gets $Y. After meeting with Apple, all of the major publishers - all of them - went to Amazon and stated that their ebooks would only be available on the "agency model" from then on. Under the agency model, the publisher sets a price of $Z, and the retailer and publisher each receive a share of that price (typically 30% and 70% respectively).

Re:Still confused (0)

Anonymous Coward | about a year ago | (#43895381)

That doesn't sound illegal, anti-competitive or wrong. The publishers wanted to change the terms because one of their retailers pointed out the stupidity of the way they were doing business.

If $X+$Y=$Z, then there's no actual difference.

Or is the agency model illegal? Unlike it has been for the last 50+ years.

The real problem is that the other retailers are pissed they didn't think of it first.

Re:Still confused (5, Insightful)

Sockatume (732728) | about a year ago | (#43895461)

I can't believe I need to integrate these ideas for you, but here we go: because the publishers set the price in the agency model, and because all of the major publishers colluded to switch to an agency model simultaneously, and because Apple's deals mandated that Apple always receive the best available price, it was no longer possible for Amazon to ever sell an eBook at a price lower than that offered by Apple.

That is an illegal anticompetitive action that reduces competition.

Re:Still confused (1)

moronoxyd (1000371) | about a year ago | (#43895181)

You do realize that Amazon is paying $12.99 for new ebooks, and selling them at $9.99 right?

Nope. Amazon sells *some* eBooks for less than cost. With most eBooks they make some profit.

Please stop spreading the misinformation that Amazon sells all eBooks below cost.

Re:Still confused (2)

Thruen (753567) | about a year ago | (#43895467)

I keep reading comments from people claiming it was a clause in the contract, but I haven't seen any such thing in actual news articles. I admit, I haven't read them all, but that's the type of thing I'd expect to see in every article about it given the general anti-apple tone I normally see. Instead, I keep seeing them quoting Steve Jobs' biography as evidence. A book published by the industry that supposedly engaged in this collusion written at the request of and about the founder of the company they colluded with is some of their strongest evidence. What the hell? From what I've seen for actual facts, it looks like Apple definitely encouraged publishers to increase prices. It also looks like publishers were already quite displeased with Amazon's practice, and that's what Apple was primarily looking to stop. I don't see any evidence that Apple went beyond encouraging publishers to do something immoral.

I'm not saying this is alright, it sounds like it's pretty shady to me. Even if Apple didn't technically break any laws, they engaged in unethical activities to boost their own profits and hurt consumers in the process.

That said, I question the ethics of Amazon's own pricing plan if it caused such a problem for publishers, and I find it hard to believe that something like that wouldn't have damaged consumers as much if not more in the long term. Here's my reasoning: Amazon, as we all know, was willing to sell titles at a loss to maintain their low prices. This sounds great for consumers, because we save money right away. But over time, the businesses that can't afford to sell titles at a loss go under. Amazon no longer needs that super-low price to be the lowest price around because their price is the only price, now they can finally sell it for a profit without fear of consumers just walking to a book store or clicking over to the next site. Book prices go back up, competition is gone with little hope of return, and Amazon stands over the corpses of Borders and B&N triumphantly.

It sounds crazy and unreasonable, until you realize we were halfway there before Apple even got into the ebook market. I know the internet spells the end for many brick-and-mortar establishments, no getting around that. What I'm trying to illustrate is that both Apple and Amazon engaged in immoral activities to create an unfair advantage for themselves. I'm actually all for punishing Apple for what they've done, as long as they did technically break the law, but people looking at them as the big kid on the playground bullying poor little Amazon have some serious tunnel vision. Amazon was the bully just a few years ago, and now Amazon and Apple are competitors. There have been plenty of times when Apple is obviously the bad guy, the same can be said for most successful businesses, I just don't think this is as cut-and-dry as people make it out to be.

DISCLAIMER: I'm not an expert. I like Apple products, but I prefer the Amazon store for anything other than music. I know I can come off as a fanboy, but that's probably because every other post that's been modded up has already found Apple guilty.

Re:Still confused (2)

VortexCortex (1117377) | about a year ago | (#43894431)

If Apple doesn't set the prices, how can they fix the prices?

Furthermore, for the sake of argument: What if Apple Loses? They'll be ordered to ... what? Fix the prices?

Re:Still confused (4, Interesting)

Sockatume (732728) | about a year ago | (#43894445)

If it's anything like Europe, Apple will be required to end their most-favoured clause immediately, and publishers will be required to offer Amazon discounted prices on their books for a few years to offset the elevated prices that they'd been forced to accept under the anticompetitive regime that existed.

Re:Still confused (2)

Plumpaquatsch (2701653) | about a year ago | (#43894883)

If it's anything like Europe, Apple will be required to end their most-favoured clause immediately, and publishers will be required to offer Amazon discounted prices on their books for a few years to offset the elevated prices that they'd been forced to accept under the anticompetitive regime that existed.

In reality what has happened in Europe was that Apple had to give up their most-favoured clause immediately, while Amazon got to keep theirs. And that's all that has happened.

Re:Still confused (1)

Sockatume (732728) | about a year ago | (#43894891)

It is the nature of punitive action that it will tend to favour the transgressor rather than the transgressed, yes. What "most-favoured" clause of Amazon's are you talking about?

Stupid case (0)

Anonymous Coward | about a year ago | (#43894369)

In other words Apple tried to do what they did with music , open up a market and allow everyone to make money and be of benefit to the users.

what I can't understand is the problem of stopping amazon from bankrupting all the publishers. Of course they couldall just decide to tell amazon to go stuff themselves and not allow their books to be sold their and set up their own site, see how amazon likes that.

Re:Stupid case (3, Insightful)

Sockatume (732728) | about a year ago | (#43894383)

That Amazon's business model is anti-publisher does not excuse an alternative business model that is rabidly anti-consumer. They're both garbage.

Re:Stupid case (4, Interesting)

Daemonik (171801) | about a year ago | (#43894809)

Prior to e-books, when a publisher stopped printing a book, their profit from that book was done. If it was a very popular book they might order more printings, but again, when the printing stopped so did that books revenue stream. This was a problem for the publisher, the author and the reader. The publisher and author's side is easy to understand; no new income, but consider also the reader that didn't know about that author at the time, it's been 20 years and they just read an author's newest novel which is part of a series and they feel a desire to read their older books. If they are lucky they might be able to track down a copy from a library or hunt through a few used book stores for one, neither of which gets any profits back to the author. Or conversely they found a dog eared used copy in a flea market and want to read more of that author's works, but the author died and all their books are out of print.

E-books, and Amazon created a new revenue stream for publishers, buying up books at wholesale (for which they paid what the publishers asked! how is that anti-publisher??) and selling those e-books below their own costs to expand a market from a niche curiosity into every day ubiquity. E-books continue to generate revenue long after the printing presses shut down, unlike paper books. So these poor, taken advantage of publishers went from zero profits after print to "some" profits. Oooo, evil Amazon, how could you mistreat them so???

It was the publishers with Apple's help that decided "some" profit wasn't enough, they wanted moar! So now you get numerous cases where the e-book's price is HIGHER than the paperback!! I've seen e-books listed for the hardcover price years after the book was released and used paperback copies were selling for $1 right beside it.

I swear, the only publisher that ever really understood e-books was Baen. Give the old books away for free as advertising for the new books, it's not like they were making money sitting on a hard drive waiting for a new print run!

Re:Stupid case (0)

Anonymous Coward | about a year ago | (#43895455)

A business model that keeps publishers in business, and thus ebooks flowing, doesn't really seem anti-consumer.

Yes, yes, some authors publish their own ebooks. So what? They wouldn't be affected by this. Most authors still go through publishers for the up-front payday. You want ebooks? Keep publishers in business.

Re:Stupid case (4, Interesting)

Daemonik (171801) | about a year ago | (#43894713)

First off, Amazon built the e-book market. When e-books started they were just niche amusements people got for their Palm Pilots and Windows PDA's. Publishers didn't care about them at all and made zero effort to establish them.

Amazon laid the groundwork, connected their store to a decent e-book reader and made e-books into the market it is today.

They were also not bankrupting any publishers. They paid the wholesale price for the books that the publishers asked for and then CUT THEIR OWN PROFIT MARGIN by selling lower than what they paid. The publishers already made a profit off the hardcover, the paperback and the e-books.

The problem wasn't that publishers were getting paid, in fact e-book sales were keeping alive books that were decades out of print and creating new profit where none had existed before. It was that they didn't feel they were getting enough. These are the same publishers that have said publicly that Libraries are stealing profits from them, btw. They are the reason an e-book now retails the same price as the hardcover even when the paperback is being sold simultaneously. Publishers are the reason an e-book can retail for $9.99 when the paperback sells for $7, if it's still even in print.

The publishers jumped into Apple's arms when they proposed their deal because it gave them a way to increase their profits and if it wasn't shady they wouldn't have all settled with the government rather than stand with Apple in their defense.

Re:Stupid case (1)

the_B0fh (208483) | about a year ago | (#43894747)

Apple's point was that they had no deal at all in the shady part, the publishers colluded among themselves.

Re:Stupid case (1)

Daemonik (171801) | about a year ago | (#43895165)

Except Steve Jobs approached the publishers and suggested the arrangement to begin with.

Re:Stupid case (1)

rwise2112 (648849) | about a year ago | (#43895217)

Apple's point was that they had no deal at all in the shady part, the publishers colluded among themselves.

Ignorance is no excuse for breaking the law!

Re:Stupid case (1)

moronoxyd (1000371) | about a year ago | (#43895205)

In other words Apple tried to do what they did with music , open up a market and allow everyone to make money and be of benefit to the users.

This model kept the ebook prices artificially high and removed competition on price.
How would that be to the benefit of the users?

Comments (4, Interesting)

puddingebola (2036796) | about a year ago | (#43894371)

Fascinating comment at the end of one of the stories linked to here. The writer claims that Amazon's model is unsustainable and equivalent to the Standard Oil play of selling at a loss to drive competitors out of business. In his opinion, Apple should be commended for raising prices by a few dollars per book? What say you Slashdot? What I have trouble determining in this shift from physical media to digital is how the artists are making out in this brave new world.

Re:Comments (3, Insightful)

Sockatume (732728) | about a year ago | (#43894401)

Amazon's ridiculously thin margins aren't a short-term tactic to eliminate competitors. If they were, Amazon would've started hiking up prices in things like books and videogames where they've all but eliminated the competition. Slim margins are the entire (incredibly dubious) business model, and they'll continue with that process, bringing in fractions of cents of profit per dollar of sales, indefinitely.

It ain't healthy for anybody.

Re:Comments (3, Insightful)

Anonymous Coward | about a year ago | (#43894529)

Ii all Amazon are ever interested in doing is making purchasing / delivery ever more efficient, then isn't that what we'd like to happen? [I don't believe they will restrict themselves to that, but it's pretty hard to see why it would be a problem if they did.]

If not can you explain
-what is the problem
-what you want to see happen
-what does Amazon have to do with it?

Is it "damage to competitors"? The public prefer to buy things for cheaper. The value of a shop floor where they can see or try certain goods is not enough to buy the public's loyalty or to use your loyal core of customers to offset the higher costs. For items which ship in standard sizes/qualities or guessable forms it's even less of a deal (you don't need to "try" a book by your favorite author, just pick paper or hardback).

Is it "the high street"?
For all of the supposed value middlemen always claim they add, a lot of retail stores do or did add add little value - high prices, nothing in stock, little knowledge about their products , crap environments to visit, no used etc - they deserve to go bust. Who should miss years of being gouged on simple things, and paying list price for stuff simply because manufacturers wouldn't ship products or their glossy catalogues direct to consumers?

Is it "warehouse/retail/packing jobs"?
If we end up needing less manual labor - it's hardly fair to blame Amazon, or to expect them to subsidise non-jobs simply because their competitors are crap. We don't need people to carry shit in wheelbarrows through city streets any more either, and I can't see anyone misses that.

Is it a general antipathy towards large corporations? If so it's perfectly understandable, but please don't claim that makes it correct, reasonable, or actionable.

Re:Comments (4, Insightful)

Sockatume (732728) | about a year ago | (#43894633)

Monoculture, essentially, is the issue. If Amazon was one of a half-dozen ultra-low-margin online retailers, we wouldn't be having this conversation.

Re:Comments (1)

fuzzyfuzzyfungus (1223518) | about a year ago | (#43894711)

Monoculture, essentially, is the issue. If Amazon was one of a half-dozen ultra-low-margin online retailers, we wouldn't be having this conversation.

What I find curious, given the fear of monoculture, is how publishers continue to let fear of pirates(who, at last writing, don't seem much deterred by current DRM schemes, and who often have access to scanned versions in any case) drive them right into the same mistake that Team Music made.

While there effect on pirates is muted, DRM schemes certainly do help encourage a winner-take-all market by tying a customer more heavily to a given store the more he has used it in the past. With computers and high-capability tablets it's more of a nuisance(since most of the DRM flavors have clients for them, and you have the resources to run 6 different shitty storefront apps if that's what it takes); but the e-ink reader market is damned barren unless you either have a DRM-free format or are using the vendor's own store.

Re:Comments (1)

Sockatume (732728) | about a year ago | (#43894737)

No argument here.

Re:Comments (2)

Plumpaquatsch (2701653) | about a year ago | (#43894899)

Amazon's ridiculously thin margins aren't a short-term tactic to eliminate competitors. If they were, Amazon would've started hiking up prices in things like books and videogames where they've all but eliminated the competition. Slim margins are the entire (incredibly dubious) business model, and they'll continue with that process, bringing in fractions of cents of profit per dollar of sales, indefinitely.

It ain't healthy for anybody.

So it's actually a long-term tactic to fuck over their shareholders. And I wouldn't call losing 20% on most ebook sales "slim".

Re:Comments (1)

Sockatume (732728) | about a year ago | (#43894939)

It would not surprise me if a majority of Amazon's sales on everything came out at a loss, with enough big profit items to shift it back across the other side of the line. They're playing a dangerously volatile game.

Re:Comments (0)

udachny (2454394) | about a year ago | (#43895355)

Oh really? They are a profitable company, saying that what they are doing 'isn't healthy' is just another way to say that you can't compete.

That's exactly what was done to Standard Oil, Alcoa Aluminium, etc. who were always lowering prices, once they were eliminated, the prices never went down again.

Here is the good thing: if Amazon fails, you don't have to bail them out, if they don't fail, they are providing the consumers with lowest prices available.

The idea that this is 'not healthy for anybody' is something from an alternative universe of the bizarro world, yet it is sold successfully to the public at large by charlatans running the biggest monopoly and ponzi scams on this planet at the time - central banks and governments.

Re:Comments (3, Informative)

Daemonik (171801) | about a year ago | (#43894903)

" What I have trouble determining in this shift from physical media to digital is how the artists are making out in this brave new world."

A couple of artists that sell e-books direct through Amazon have become millionaires actually. http://blog.nathanbransford.com/2011/03/amanda-hocking-and-99-cent-kindle.html [nathanbransford.com]

The problem with e-book prices, in the main, is the perception of value. When they are listed next to the retail prices for the paperback version and it's still cheaper to have a paperback shipped to your home, then something is very very wrong. When the e-book version of a book that has been out of print for a decade or more hits the market for $9.99, you know that's not a fair price.

Re:Comments (1, Insightful)

udachny (2454394) | about a year ago | (#43895319)

Standard Oil NEVER SOLD AT A LOSS, it's a fairy tale for the ignorant and unintelligent. Standard Oil operated for half a century, lowering prices from about 60 cents to under 6 cents in that time period, the same exact time period that made Rockefeller one of the wealthiest people that ever lived (equivalent of 600,000,000,000 dollars).

I comment on this site that government is the only entity that truly creates monopolies and all of its activities aimed at supposedly 'making market fair' are just corruption and racketeering. [slashdot.org]

I get moderated 'off-topic', that to me is fascinating.

Re:Comments (3, Interesting)

bws111 (1216812) | about a year ago | (#43895417)

Standard Oil didn't get in trouble because they had low prices, they got in trouble because they created a trust. They not only sold oil, but they either owned or controlled most of the oil transportation system. Because of that control, nobody could compete with them in the oil market because it would have been too expensive for a competitor to build their own transportation system. Therefore, competitors could not arise, and SO could in fact raise prices to very high levels.

Ebooks are not remotely like that. Sure, Amazon could drive competitors out of the ebook market by having very low prices, but as soon as they try to raise prices competitors will pop up, as it is stupidy cheap to retail ebooks.

i wonder how the defense will play out (0)

Anonymous Coward | about a year ago | (#43894519)

"We decided Amazon had an illegal monopoly, so we illegally conspired to set prices instead of talking to the DoJ. The increase in our 30% cut didn't hurt either."

Who is the victim here? (0)

trout007 (975317) | about a year ago | (#43894525)

I can never understand laws like this. In every voluntary trade each side benefits otherwise there would be no trade. If Apple wants to set up deals with publishers to set prices nod the customers agree to pay those prices who is actually the victim? If you don't want to pay the price the seller is asking there is no sale. The only argument I might understand is that since they get a monopoly via copyright they are subject to regulation. But that is just another reason to get rid of IP laws entirely.

Purchasers. (1)

Anonymous Coward | about a year ago | (#43894565)

You. Unless you get more money from the publishers than you spend on books.

Because the contract is that the publishers cannot sell to a distributor without telling the distributor that they cannot reduce their prices.

So unless Apple are having a sale on some book, nobody else can have a sale on that book.

Which means that you pay more, because there's no point to shopping around looking for a better deal.

Re:Purchasers. (2)

trout007 (975317) | about a year ago | (#43894629)

They could price the book at $10,000 if they want I don't have to buy it. If I agree to buy something only to find it cheaper elsewhere doesn't mean I was ripped off.

Re:Purchasers. (1)

Sockatume (732728) | about a year ago | (#43894669)

The point is that under Apple's iBooks publishing contracts, you're not supposed to be able to get it cheaper elsewhere. (As an ebook, anyway.)

Re:Purchasers. (0)

Anonymous Coward | about a year ago | (#43894697)

Don't waste your time. Trout007 is an Apple apologist and will never see the company in a bad light, no matter how obviously illegal and anti-consumer their behavior is.

Re:Purchasers. (1)

trout007 (975317) | about a year ago | (#43894813)

I'm not an Apple apologist I just don't see a problem with this.

Re:Purchasers. (1)

Sockatume (732728) | about a year ago | (#43894881)

You don't see the problem with publishers being able to directly set a single price for their product across all retail outlets? A product for which no secondary market exists?

Re:Purchasers. (1)

trout007 (975317) | about a year ago | (#43894981)

That's what you get when you allow the monopoly of IP.

Re:Purchasers. (1)

Sockatume (732728) | about a year ago | (#43895111)

I would love for you to explain how that argument makes the least bit of sense.

Re:Purchasers. (0)

Anonymous Coward | about a year ago | (#43894695)

The point is that noone else is allowed to offer a lower price. You are a supplier that paid 3 dollars for a book, I want to pay you 5 dollars, you want to accept it, but we are not allowed to make the deal because of a price fixing agreement.

Re:Purchasers. (1)

trout007 (975317) | about a year ago | (#43894829)

You are not allowed to make the deal because you previous agreed not to. You had a contract to do something so if you violate it you are subject to whatever is in the contract.

Re:Purchasers. (0)

Anonymous Coward | about a year ago | (#43895239)

I think as others point out you are clearly an apple fanboi but i will try to enlighten you anyhow.

You do realize that these sort of "deals" are against the law dont you?

It doesn't matter if you agree with why its illegal or not, the fact is under the current framework it is. If you (Apple) disagree there are mechanisms to have the laws changed but collusion isn't the right way. and this is collusion plain and simple. In fact its so clear that EVERYONE else involved has already settled for millions of dollars.

Also this isnt about "IP", its about price fixing, a law which has existed for a very long time.

This is about Apple making sure they get their 30% margin. Whereas Amazon is able to compete by lowering its margins on some books Apple wont consider this option and elected for collusion and price fixing instead.

Re:Purchasers. (3, Insightful)

bws111 (1216812) | about a year ago | (#43895539)

Wrong. You can't make the deal because APPLE has a contract with the publishers that prevents YOU from setting your prices.

You: Mr Publisher, I would like to lower the prices to my customers. To do this, I will take only a 20% cut, you will still make the same money.

Publisher: No can do. We have this deal with Apple that says nobody gets a lower price than their customers. However, since you offered to take only 20%, you will get only 20%, but your customers will pay the same. We will keep the difference.

Re:Who is the victim here? (0)

Anonymous Coward | about a year ago | (#43894587)

There is also another side. People who are screwed.

Re:Who is the victim here? (4, Interesting)

ledow (319597) | about a year ago | (#43894715)

Smaller competitors who want to get into the market. Effectively, price controls like this will freeze out the competition. How? Well, say Apple are making 200% profit on everything they sell because they have price-fixed. You now can sell at 200% profit and compete with them (and thus become part of the cartel yourself), or you can try to undercut them. But they have a huge market, to themselves, with huge profit margins, complete control of the market (because they are all agreeing to price at whatever they want) and lots and lots and lots of spare cash to keep you out / buy you up.

Because of this, you also get a lack of competition (what's the point of competing if you can all agree to just set prices to X and no-one "wins" the market for having a better product?), the market stagnates and the customer gets screwed - not by the raised prices (as you say, that's up to the customer) but because the market is so closed that they either pay lots or DON'T get the products at all. It's also a pretty good way to kill off the technology and (thus) competitors who rely on book sales to sell reading devices, etc.

A company sets its own prices. That much is certain. But they should not be getting into groups and DECIDING how much the customer pays between them collectively, with no reference to how much it costs to supply the product itself, and no consumer interest. It's illegal for a reason. It destroy markets, stifles innovation, removes competition, and makes everything a big game to make money with no regard to consumers at all. And, at the end of the day, it becomes "pay lots, or get nothing", which isn't a technique that benefits taxpayers either. Yes, you get greater tax revenue from profits (you hope!), but you also get less people spending money and less money available to spend on other things for those that do.

The point is that the market is bigger than a company, even a government. Harming the market DIRECTLY harms the stability of the economies of world governments. Thus it is illegal.

There's nothing stopping a company with a patent licensing its patent ONLY for 10 bajillion dollars even though it costs next to nothing to manufacture. That's just business. Nobody's stopping that. But colluding with competitors to price other competitors and your own customers out of the market is in nobody's interest - not even the companies that do it, or their shareholders!

Re:Who is the victim here? (2)

Rockoon (1252108) | about a year ago | (#43895005)

In every voluntary trade each side benefits otherwise there would be no trade.

True.

If Apple wants to set up deals with publishers to set prices nod the customers agree to pay those prices who is actually the victim?

Everybody but Apple.

The reason its not so simple is because its not a single-variable problem. The optimal price for each retailer to sell at is different.

A simple example of this sort of thing are price differences between the prices at convenience stores and grocery stores.

What Apple was doing was conspiring with the publishers so that the minimum price that anyone could sell at was a close approximation of only Apples optimal price. The publishers have already plead guilty. Apple is trying to claim innocence. Fuck Apple.

Apples price fixing (0)

Anonymous Coward | about a year ago | (#43894777)

This just reinforces my belief that ownership of any Apple device is an indicator of low intelligence.

Name any Apple product over 20 seconds old and you can go buy three of the competitor's product and use two of those for target practice and still come out cheaper with a better product that you don't have to load media through their stupid iStore (is that what it's called?)

Apple products are NOT immune to virus infections, either.

Can you say "Pirate Bay"? I knew you could!

Good! Now what abut banks? (2)

mauriceh (3721) | about a year ago | (#43894807)

Glad to see they have enough evidence to go after Apple.
It seems fairly obvious that they are guilty.

Now how about some banks?

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