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Court Bars Apple From Making Industry-Wide E-book Deals

Soulskill posted about 8 months ago | from the play-nice-with-others-or-else dept.

The Almighty Buck 130

itwbennett writes "The federal judge presiding over the U.S. electronic books case against Apple has barred the company from striking deals that would ensure that it could undercut prices of other retailers in the e-book market and also prohibited Apple from letting any one publisher know what deals the company is striking up with other publishers. For its part, Apple said it plans to appeal the ruling (PDF), denying that it conspired to fix ebook pricing. Meanwhile, Amazon is alerting customers of their potential payout, which could be as much as $3.82 for every eligible Kindle book."

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130 comments

Different Deal Per Publisher (0)

Anonymous Coward | about 8 months ago | (#44777959)

Apple will just make a different deal per publisher. Unless, of course, the publishers create their own e-pub organization that then strikes a deal with Apple.

Re:Different Deal Per Publisher (-1, Flamebait)

Anonymous Coward | about 8 months ago | (#44778091)

Apple has been robbed of justice. Amazon is behind this and they are the ones that should be convicted!

Re:Different Deal Per Publisher (3, Informative)

Anonymous Coward | about 8 months ago | (#44778277)

Apple has been robbed of justice. Amazon is behind this and they are the ones that should be convicted!

Robbed of justice? You know that one of the reasons they were convicted were that they had an email from Steve Jobs confirming illegal price fixing?

Re:Different Deal Per Publisher (0)

Anonymous Coward | about 8 months ago | (#44778589)

Weren't the prices of books from the itunes store cheaper than comparables at Amazon?
Not sure how that would be price fixing if the price actually costs less to the consumer.
But maybe I just haven't paying attention very well.

Re:Different Deal Per Publisher (5, Informative)

Anonymous Coward | about 8 months ago | (#44778629)

According to Jobs they were not cheaper:

'We'll go to the agency model, where you set the price, and we get our 30 percent, and yes, the customer pays a little more, but that's what you want anyway.'"

Re:Different Deal Per Publisher (2, Informative)

Anonymous Coward | about 8 months ago | (#44778819)

You weren't paying attention at all. Ebook prices went up after the iBooks thing started, both from Apple and Amazon.

That's the first hint that something shitty is going on, when you have more competitors in a market and yet the price goes up.

Re:Different Deal Per Publisher (0)

Anonymous Coward | about 8 months ago | (#44778287)

Wait what? I was under the impression that it was Apple and not Amazon that attempted to raise prices.

Re:Different Deal Per Publisher (-1)

Anonymous Coward | about 8 months ago | (#44778325)

Since this is all about distribution of mostly non-free books I would prefer if they just stopped distributing them at all. Distributing non-free books is unethical.

Yay for monopoly! (-1)

SuperKendall (25149) | about 8 months ago | (#44778033)

I'm glad I like the Kindle system (and I really do like it, having a lot of Kindle books), what with the government curb-stomping any possible competition for what was already by far the largest e-book publisher at the time of the events the Apple trial was about...

A nice touch Amazon forcing the publishers to cough up dough for daring to try and limit the ability of Amazon to set prices to whatever they like regardless of publisher wishes.

Re:Yay for monopoly! (5, Insightful)

king neckbeard (1801738) | about 8 months ago | (#44778087)

There's nothing illegal about being by far the largest e-book publisher. There is something illegal about conspiring with the majority of an industry to collude in price fixing. Also, I'm amazed at the gall of being upset that an illegal conspiracy against customers is actually leading to said customers being compensated.

Re:Yay for monopoly! (1)

Anonymous Coward | about 8 months ago | (#44778425)

I do not understand. Price fixing is saying, here is the price, no one go under this price. Apple said,here is what i am paying, if you let someone else get the book for less, then this is the new price I am paying.

Re:Yay for monopoly! (4, Insightful)

Anonymous Coward | about 8 months ago | (#44778513)

Really? That is what apple said? The publishers were unhappy with Amazon discounting the books for a while but were unable to do anything individually. Apple came around and said we can work on this with you. The 5 publishers all got on-board and then gave amazon an ultimatum. change your model to agency or be excluded from the market.

Apple also said this:
'We'll go to the agency model, where you set the price, and we get our 30 percent, and yes, the customer pays a little more, but that's what you want anyway.'"

See the part where Jobs acknowledged the customer (thats you and me) pays more?
Is that how competition should work?

Re:Yay for monopoly! (0)

Anonymous Coward | about 8 months ago | (#44778599)

Actually apple came in and offered a way to break the amazon monopoly. Apparently the apple lawyers sucked in the case. This will be interesting to see how the appeal plays out.

Competition is good...Cartels not so much (3, Insightful)

tuppe666 (904118) | about 8 months ago | (#44778693)

Actually apple came in and offered a way to break the amazon monopoly.

Apple Didn't offer DRM free ebooks at lower prices than Amazon...you know compete. Apple formed a price fixing cartel with publishers which is bad for consumers, and removing the ability to compete with Apple(Even if you are not buying Apple products)...the reason why Monopolises are bad.

Steve Jobs should have gone to jail.

evil of AAPL vs evil of AMZN (0)

Anonymous Coward | about 8 months ago | (#44779281)

Actually apple came in and offered a way to break the amazon monopoly.

Apple Didn't offer DRM free ebooks at lower prices than Amazon...you know compete. Apple formed a price fixing cartel with publishers which is bad for consumers, and removing the ability to compete with Apple(Even if you are not buying Apple products)...the reason why Monopolises are bad.

Steve Jobs should have gone to jail.

Is this better or worse then the situation before, where Amazon was basically acting like a monopoly?

Re:evil of AAPL vs evil of AMZN (3, Insightful)

king neckbeard (1801738) | about 8 months ago | (#44779337)

Worse, because Amazon was acting like an efficiency monopoly, not a coercive monopoly. It's like complaining about Google's dominance in search when it was due entirely to being better.

Re:Competition is good...Cartels not so much (0)

Anonymous Coward | about 8 months ago | (#44779719)

Does anybody on this forum actually understand that Apple's role here was to _reduce_ prices from what Amazon was charging? It's an odd kind of price-manipulation to be criticized for.

Re:Competition is good...Cartels not so much (0)

Anonymous Coward | about 8 months ago | (#44780725)

You can post your "apple was the good guy" stuff all you want. Facts state otherwise and so perhaps it is you who fails to understand Apple's role.
Steve Jobs says:

"We told the editors, 'We will adopt the agency model, where you set the price and we have our 30%, and yes, the customer will pay a little more, but anyway this is what you want."

So, they wanted to "reduce" prices over what Amazon had by charging the customers more?
Price manipulation pushes prices UP, and is against the law. Why did the publishers all opt to settle instead of going to court?

Re:Yay for monopoly! (0)

Anonymous Coward | about 8 months ago | (#44779051)

What monopoly was that? Having the best website and selling the most products because you were first to market and gave the cusstomer what they wanted doesn't make you a monopoly...

Conspiring to price fix, that is more monopolistic behaviour....

Re:Yay for monopoly! (1)

ynp7 (1786468) | about 8 months ago | (#44782457)

That actually can make you a monopoly. It's just that being a monopoly isn't necessarily illegal.

Re:Yay for monopoly! (3, Informative)

Microlith (54737) | about 8 months ago | (#44778543)

Apple said,here is what i am paying, if you let someone else get the book for less, then this is the new price I am paying.

Not correct at all. The rules stated that if any other retailer sold the book for less than what Apple was, Apple could change their price and take it out of the publisher's percentage. Apple was all about protecting their 30% and not actually competing as a retailer.

Re:Yay for monopoly! (1)

Princeofcups (150855) | about 8 months ago | (#44779283)

Apple said,here is what i am paying, if you let someone else get the book for less, then this is the new price I am paying.

Not correct at all. The rules stated that if any other retailer sold the book for less than what Apple was, Apple could change their price and take it out of the publisher's percentage. Apple was all about protecting their 30% and not actually competing as a retailer.

That just means that Apple is guaranteed to get the same price as any other vendor. I'm still not seeing how this is price fixing, that is, keeping a price artificially low or high when you have total control of a product. There's gotta me more to it.

Re:Yay for monopoly! (1)

bws111 (1216812) | about 8 months ago | (#44779431)

No, it does not mean Apple gets the same price. It means that nobody could SELL for less than Apple.

Lets talk legality (1)

SuperKendall (25149) | about 8 months ago | (#44779015)

There's nothing illegal about being by far the largest e-book publisher.

I didn't say there was. Just that they have a monopoly in the ebook market, which is clear and true and definitely not illegal.

What should also be legal, is for publishers to say "you cannot sell my book for less than $X". Amazon can sell books for any price they like, down to $0, and the publisher cannot complain. Does that sound right to you? It means if a publisher irks Amazon, they can send book profits spiraling down.

It may seem good for the consumer at first until you realize what happens after years when Amazon has killed all eBook competition.

Re:Lets talk legality (2)

0123456 (636235) | about 8 months ago | (#44779141)

I didn't say there was. Just that they have a monopoly in the ebook market, which is clear and true and definitely not illegal.

No, it's nonsense.

Amazon used to have around 90% of the US e-book market. Now it's more like 60%, though if B&N continues its long suicide, their market share will probably rise again.

Outside America, they have far more competitors, so I'd expect market share to be even lower.

Re:Lets talk legality (1)

BasilBrush (643681) | about 8 months ago | (#44779329)

Amazon used to have around 90% of the US e-book market. Now it's more like 60%

To a large extent due to Apple. Strange that the monopoly breaker is being ruled against instead of the monopoly. I predict a successful appeal.

Re:Lets talk legality (1)

0123456 (636235) | about 8 months ago | (#44779873)

To a large extent due to Apple.

I believe Kobo and B&N between them sell at least as many e-books as Apple, and there are plenty of other, smaller e-book retailers.

Strange that the monopoly breaker is being ruled against instead of the monopoly.

That's because Apple and the big publishers broke the law, and Amazon didn't.

I predict a successful appeal.

Then you don't understand the case.

Re:Lets talk legality (1)

BasilBrush (643681) | about 8 months ago | (#44779965)

Then you don't understand the case.

I am not a lawyer. But then neither are you. Your prediction is worth no more than mine.

Re:Lets talk legality (1)

farble1670 (803356) | about 8 months ago | (#44780597)

I am not a lawyer. But then neither are you. Your prediction is worth no more than mine.

did you notice that the court already found apple guilty? that's a decision by people who's opinion is worth something.

Re:Lets talk legality (1)

king neckbeard (1801738) | about 8 months ago | (#44780709)

Actually, some people are better at predicting than others, even if neither party is member of the bar. Some non-lawyers are probably better at predicting outcomes than a lot of lawyers.

Re:Lets talk legality (0)

Anonymous Coward | about 8 months ago | (#44780171)

Correction: Amazon did break the law by selling ebooks below cost. The Just Us department didn't prosecute them for it, but that's a different issue.

Re:Lets talk legality (0)

Anonymous Coward | about 8 months ago | (#44781419)

Why was Apple the only one found guilty? Citation on Amazon breaking the law by selling books below cost?

Re:Lets talk legality (1)

QuantumLeaper (607189) | about 8 months ago | (#44782861)

Simple selling below cost is NOT illegal, if you see cheap prices in the store, a lot of times they will below wholesale prices too. I remember buying a printer, at a Wholesale club, I saw the price, and emailed my nephew who sells computers, he said to buy the one from the store, since it was around 10% below the wholesale cost, and my nephew company get really good prices, since they sell a lot stuff. It's a way for the retailer to get into the Store, so they can sell higher margin items at the same time. I believe is called it a "doorbuster" or something like that, it been a few years.

Re:Lets talk legality (1)

farble1670 (803356) | about 8 months ago | (#44780579)

simply being a monopoly is not illegal. if that were true then any business that doesn't have competitors for whatever reason is operating illegally. apple was convicted of price fixing, not being a monopoly. and you don't have to be a monopoly to coerce publishers.

Re:Lets talk legality (1)

dk20 (914954) | about 8 months ago | (#44780651)

That is because the "monopoly breaker" (Apple) broke the law by conspiring to set prices whereas what you determine to be a monopoly is not. You are free to start up your own site and sell books. People might not buy from you but that's not because amazon has a side deal with the publishers (something Apple required with the MFN).

Re:Lets talk legality (2)

king neckbeard (1801738) | about 8 months ago | (#44779207)

What should also be legal, is for publishers to say "you cannot sell my book for less than $X". Amazon can sell books for any price they like, down to $0, and the publisher cannot complain. Does that sound right to you? It means if a publisher irks Amazon, they can send book profits spiraling down.

It sounds right to me until you get to the 'profits spiraling down' part. Because Amazon pays the publisher the same amount no matter what the price. And yes, it does sound right to me because it's the wholesale model. If I want to just give away my stuff, I can. If I want to sell it at ridiculously low prices I can. If I want to sell milk or gas at a loss to get you into my store, where I'll make a tidy profit off of other things, I can. Amazon is doing something akin to the last thing here. They had a small number of books acting as loss leaders. Now, if they were engaging in dumping, that might be a concern, but they weren't. And even if they were, the answer is not to illegally collude with Apple to make prices rise again. The answer is to go to court against Amazon. Apparently, the feds were looking into Amazon and found their business operation perfectly legal. They also realized later that Apple was doing naughty, naughty things with the other publishers, and then they got in trouble.

Re:Lets talk legality (0)

BasilBrush (643681) | about 8 months ago | (#44779377)

If I want to sell milk or gas at a loss to get you into my store, where I'll make a tidy profit off of other things, I can. Amazon is doing something akin to the last thing here. They had a small number of books acting as loss leaders.

No, that's not it. Amazon isn't doing loss leaders to make profits with other products now. They are making little profit on anything. Their business model is to undercut other businesses to put them out of business, such that they can raise prices in the future, when they have little competition.

It's a global version of what Walmart does town by town. Walmart opens in a town, and offers loss making prices till it bankrupts other businesses. Then when it has the town pretty much to itself, the prices rise.

Amazon is killing the book retail business. It's the biggest monopoliser since Microsoft.

Re:Lets talk legality (1)

king neckbeard (1801738) | about 8 months ago | (#44779685)

AFAIK, Amazon made a profit on their ebooks market overall. There were certain titles they lost money on, but they usually weren't losing a great deal, and they made it up through their other titles. What you are talking about is dumping, and Amazon was not dumping. While I have many issues with Walmart, I don't think there's evidence of them dumping either. They do have prices that can drive away competitors, but it's done by a ruthless supply chain with ridiculous economy of scale, and cutting corners on their inventory to have just a passable selection of everything.

Re:Lets talk legality (1)

BasilBrush (643681) | about 8 months ago | (#44779769)

AFAIK, Amazon made a profit on their ebooks market overall.

I doubt that's the case, but it's irrelevant. I'm not limiting it to ebooks. I'm talking about their whole business strategy. That their strategy so far is to make no profit is not in question. It's a fact.
http://ben-evans.com/benedictevans/2013/8/8/amazons-profits [ben-evans.com]

It's pretty obvious that Amazon is putting off the profit making plan till they have a monopoly.

Re:Lets talk legality (1)

king neckbeard (1801738) | about 8 months ago | (#44780717)

It seems more like their intent is diversify in a number of markets that all seem to eventually become sustainable. That's a healthy way to run a business long term. I know it's bizarre to see such behavior, but that doesn't make them some unspeakable evil.

Re:Lets talk legality (1)

Qzukk (229616) | about 8 months ago | (#44779481)

Amazon can sell books for any price they like, down to $0, and the publisher cannot complain. Does that sound right to you? It means if a publisher irks Amazon, they can send book profits spiraling down.

No they can't, not by setting the price to $0. Amazon pays the publisher the wholesale rate of the book, then charges the customer whatever Amazon thinks the customer will pay. If they set the price to $0, the publisher will get rich off of Amazon's losses. Of course, if they were pissed off enough they could charge $10000 and then the profits would spiral.... across to some other retailer who isn't being a jackass.

You know, how competition is supposed to work.

Re:Lets talk legality (2)

cpt kangarooski (3773) | about 8 months ago | (#44779537)

What should also be legal, is for publishers to say "you cannot sell my book for less than $X". Amazon can sell books for any price they like, down to $0, and the publisher cannot complain. Does that sound right to you? It means if a publisher irks Amazon, they can send book profits spiraling down.

No, it's fine. The publishers set a wholesale price they were happy with, and which they turned them a profit. Amazon paid it, then sold at a lower retail price than the publishers wanted. Ebook profits for publishers were never in jeopardy.

Re:Yay for monopoly! (1)

Anubis IV (1279820) | about 8 months ago | (#44779365)

I'm going to try and make a nuanced argument here, so stick with me to the end before assuming that I'm dismissing something.

There's nothing illegal about being by far the largest e-book publisher.

There is when you're using your size in an anticompetitive manner, which Amazon was on the verge of doing.

They were leveraging their monopsony [wikipedia.org] on the wholesale side of the market to drive prices down. Their doing so was effectively a form of price fixing, since they essentially controlled the entire buyer's side of the market prior to Apple's arrival (and perhaps even since their arrival, for that matter) and were thus able to dictate their own prices. Furthermore, by driving prices down to levels that would be unsustainable for the publishers, Amazon would be using their monopsony to procure an unfair advantage for their own self-published eBooks business, potentially even leaving them as the de facto publisher for all eBooks if they succeeded in driving the current publishers out of business.

Either of those would be cause for alleging antitrust violations, and I have no problems with the publishers changing their business model from wholesale to agency in order to protect against such a future. And, notably, that change in and of itself would not be an example of price fixing, since the publishers were still free to set their own prices and would not have made agreements with anyone else to lock prices at any particular points. That the prices for consumers went up could be explained as simply being a factor of the costs for the agency model being higher than the then-current costs for the wholesale model (i.e. the retailer took a bigger cut of the pie with the agency model than with wholesale, so they passed some of that cost onto consumers, but it was worth it to them, since they were concerned that the pie would get smaller if they stuck with wholesale).

But before you think that I'm suggesting the publishers and Apple didn't do anything wrong and are being unfairly persecuted, I want to point out that I'm definitely NOT in support of the "most favored nation" (MFN) clause Apple had in their contracts, which is at the crux of the price fixing allegations. That clause, at least as it was used in this case, was a form of price fixing, and that's the reason Apple has been barred from using it in its new negotiations with the publishers, whereas it isn't barred from pursuing an agency model with them again. In fact, Amazon has already negotiated agency model contracts with all of the publishers, which means that the publishers got what they wanted out of this (hence why they settled, rather than fighting it) and won't be in danger of seeing Amazon's monopsony threaten their survival again (at least for awhile).

Also, I'm amazed at the gall of being upset that an illegal conspiracy against customers is actually leading to said customers being compensated.

I haven't yet seen it demonstrated that the MFN clause was what actually led to the increase in prices, which is what prompted the DoJ to pursue this case in the first place. In fact, it seems obvious that the increase in prices was predominantly (though not entirely) caused by the larger cut the retailers were taking as a result of the publishers' shift in business model. That, by itself, is not a form of price fixing, nor should it be punished as such, which means that while I do believe that price fixing occurred here in the form of the MFN clause, I do not believe that it was as significant as the DoJ is alleging, hence why I still object to the size of the compensation being demanded from the publishers (and likely from Apple as well, though we have yet to see about that). Some compensation definitely should be demanded, but only inasmuch as it is demonstrable that the MFN clause was the result of the increase, and that amount is doubtless far less than what is currently being demanded.

So it's pre-crime you're talking. (1)

Anonymous Coward | about 8 months ago | (#44782599)

"There is when you're using your size in an anticompetitive manner, which Amazon was on the verge of doing."

So they weren't using it in an anti competitive manner, but you think they were on the verge of doing so?

1) You are not the arbiter of law. We have the justice system for that.
2) You have to commit a crime first to be a criminal (or at least be accused of one and committed for it). When even you say "they haven't yet", then there's no crime.

Re:Yay for monopoly! (1)

bws111 (1216812) | about 8 months ago | (#44782951)

Did you even read the link you referenced? The first line shows the problem with your claim of monopsony. 'One buyer faces many sellers.' You can't lump all of the publishers together and call them 'multiple sellers', because they all sell different products.

The second major problem with your claim is that Amazon is not the buyer, consumers are.

Amazon does not have some magical power to force publishers to accept low prices for ebooks. The publisher has a monopoly on his books, and he can set whatever price he wants. If Amazon doesn't get some ridiculously low price for an ebook, what are they going to do, not sell it? As soon as they refuse to sell a book the door is thrown wide open for competitors to sell the book.

Amazon's power comes from their ability to not sell paper books. That puts the publishers in the position of having to choose between low ebook prices or low paper sales. Too bad. Every manufacturer has to make such decisions in their product line.

Re:Yay for monopoly! (1)

Anonymous Coward | about 8 months ago | (#44778155)

Unlike you, I am glad that Amazon is able to set their prices LOWER once again without a MFN clause getting in the way.

You think Apple was "competition" when they conspired to RAISE prices for everyone, including amazon so they could lock in their 30% cut and not have to compete on price?

Crazy...

Re:Yay for monopoly! (3, Insightful)

Karlt1 (231423) | about 8 months ago | (#44778511)

Unlike you, I am glad that Amazon is able to set their prices LOWER once again without a MFN clause getting in the way.

So why do you think Amazon is willing to sell ebooks at a loss?

Do you think they just love their customers or maybe if they can drive their competitors out of business they can raise prices later?

Re:Yay for monopoly! (1)

Microlith (54737) | about 8 months ago | (#44778871)

Do you think they just love their customers or maybe if they can drive their competitors out of business they can raise prices later?

Amazon's actions are largely irrelevant because this is about Apple. The DoJ looked at Amazon and concluded their actions weren't illegal. Apple was simply uninterested in competing so they played ringleader in price fixing collusion to protect their profits and avoid having to compete - instead pushing off the costs of competition on the publishers.

Re:Yay for monopoly! (0)

Anonymous Coward | about 8 months ago | (#44781931)

Amazon is NOT selling ebooks at a loss! Authors whose books are sold on Amazon have stated that they make far more from an ebook sold at $3.99 than they do a print book sold at $12-$15. And Amazon still gets their 30%. The cost to produce an ebook is much much lower than to produce a print book. And storage and distribution costs for ebooks are almost nothing, a fraction of a cent per ebook. And there are no unsold copies of an ebook to worry about.

Re:Yay for monopoly! (0)

Anonymous Coward | about 8 months ago | (#44778375)

I'm glad I like the Kindle system (and I really do like it, having a lot of Kindle books), what with the government curb-stomping any possible competition for what was already by far the largest e-book publisher at the time of the events the Apple trial was about...

A nice touch Amazon forcing the publishers to cough up dough for daring to try and limit the ability of Amazon to set prices to whatever they like regardless of publisher wishes.

How Steve Jobs, Rupert Murdoch and Stephen King Worked To Fix Ebook Prices [businessinsider.com]

BN (2)

ISoldat53 (977164) | about 8 months ago | (#44778119)

Barnes and Noble is also notifying their nook owners about the payout.

Re:BN (-1)

geekoid (135745) | about 8 months ago | (#44778417)

Will they be notified via their Zune?

Re:BN (1)

Anonymous Coward | about 8 months ago | (#44778585)

Probably by their sub $100 eBook reader which fully supports open standards like EPUB. Among other devices I also own a Nook and its perfect for reading. Super light and it doesn't matter if its in full sun, its still usable. Battery live is also measured in days not hours...

Re:BN (0)

Anonymous Coward | about 8 months ago | (#44778755)

Just bought two more nooks, for my kids. They just work well as ebook readers. I don't want them to have ipads, I want them to have good ebook readers. Overdrive works great for DRM encomubered library borrowing, the battery life is quite adequate, and they support epubs fabulously.

Re:BN (0)

Anonymous Coward | about 8 months ago | (#44778887)

Everything you've said, except the "open standards" part, applies to the Kindle. As for the Nook - given the hell I've gone through with Nook trying to get them to do what they promised to do with my ebook collection from other vendors they have acquired, I have no intention of buying eBooks from them.

When possible, I'll buy open eBooks from other vendors. When not, I'm stuck with Amazon.

Re:BN (1)

Anonymous Coward | about 8 months ago | (#44778991)

Not saying its the "best" reader. I own a few kindle's as well and would say the Nooks sorting / book management is sub-par..

My response was to the "zune" comment. I suppose the logic is the nook is like the zune (a dead copy of an apple product).
I dont find this true. I have a few nooks and a kindle which are perfect for reading on.

On a pure price/performance level the nook (reader, cant speak to the tablets) is a really good value.

Attention Obama Fellaters!!! (-1)

Anonymous Coward | about 8 months ago | (#44778327)

Off your knees for a second!

http://www.washingtonpost.com/opinions/charles-krauthammer-unless-hes-serious-vote-no/2013/09/05/18fb85be-165c-11e3-804b-d3a1a3a18f2c_story.html

"Sen. Bob Corker: “What is it you’re seeking?”

Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff: “I can’t answer that, what we’re seeking.”

DO YOU HEAR THAT DOUCHEBAGS? DO YOU!!!

Because, yea, I remember all you fucktards treating Bush the Evil One with the same amount of vitriol when he, for example actually went to congress and GOT FUCKING AUTHORIZATION TO ACT.

No, no double standards here, you fuckwads.

Re:Attention Obama Fellaters!!! (-1)

Anonymous Coward | about 8 months ago | (#44778779)

I love how Dempsey is clearly the only one in the room who knows what the fuck he's doing, but is barred from actually speaking up by professional decorum.

Later, a frustrated Kerry revealed the real logic behind his position: public opinion. He noted that no Americans wanted to go to war with Syria and insisted the White House was of the same mind. “We don’t want to go to war in Syria either!” he exclaimed. “It’s not what we’re here to ask. The President is not asking you to go to warHe’s simply saying we need to take an action that can degrade the capacity of a man who has been willing to kill his own people by breaking a nearly hundred year-old prohibition [against chemical weapons].”

Then, turning to Dempsey, Kerry asked, “General, do you want to speak to that?”

Dempsey responded, “No, not really, Secretary, thank you for offering.” Why? Because General Dempsey knew that was nonsense.

Re:Attention Obama Fellaters!!! (-1)

Anonymous Coward | about 8 months ago | (#44779059)

I don't expect you are trying to assert that in such a case a spokesman of the administration telling us that the reason we are planning to engage in an act of war is something he cannot speak of. Is he a) telling us we cannot know the reason? b) lying? c) telling us he does not know the reason? or what? None of these cases are even remotely acceptable. We aren't talking here about raising taxes or birth certificates you know, people are going to die based on this.

And Kerry, good grief.

Wait, wait, wait...

Kerry's new defense for action in Syria is that if we DON'T intervene, MORE extremists will be attracted to the cause.

LOLWUT?!

Old and Busted: Intervention Incites Extremism

New Hotness: Nonintervention Incites Extremism

BEYOND. PARODY.

Re:Attention Obama Fellaters!!! (0)

Anonymous Coward | about 8 months ago | (#44779497)

d) There isn't really a reason, but he's not allowed to say that, so he says "no comment".

While Kerry says "look, it's not 'war', we're just launching cruise missiles into another country!"

Lightly as possible on how Apple runs its business (2)

tuppe666 (904118) | about 8 months ago | (#44778633)

Apple always seem to do so well in court. The timeframe has dropped to 10 years to five. The remedies to include "music, movies, television shows or other content," all gone. Apple having to allow Amazon, Barnes & Noble, and others to sell content through links to their own stores in their iOS apps, thereby avoiding Apple's 30 per cent tariff.

Apple is not going to be concerned about a few $. It is becoming increasingly necessary for content to move cross platform easily, without being treated as a criminal for removing trivial DRM, for all content and I include Applications. There is no technical reason for this today.

Slashdot old timers. (-1)

Anonymous Coward | about 8 months ago | (#44778653)

Hello Slashdot Old Timers!

Don't you love it now when Apple haters get modded UP?

Because back in the day, ANY criticism of APPLE - regardless of its merit - was automatically modded down as "Flamebait" , "Troll", "Overrated", or something else.

And you people (Slashdot population in general) think you're better than the rest of humanity.

You're just as pathetic as them all. And you're too stupid to see it.

Oh Noes! People don't like Apple (1)

tuppe666 (904118) | about 8 months ago | (#44778823)

Don't you love it now when Apple haters get modded UP?

I am not sure they do, but the image of technical mind hippy revolutionary is long gone and replaced by a mega corporation prepared to lie, pay no tax towards hospitals and schools, steal money from consumers, proud of manufacture goods in china (including new reports this week...again) by badly treated by China's own standards workers, produce damaging to the environment products, and is incredibly litigious, on the backs of heavily marked up mid range products. if popular opinion is going against them maybe they should, I don't know..."Think Differently"

Re:Oh Noes! People don't like Apple (1)

Nerdfest (867930) | about 8 months ago | (#44779019)

That was also back when their evil behaviour didn't affect many, as opposed to now, where mobile apps are generally still created for their walled garden before more open platform even though it has a falling market share. That was back when they were considered the 'underdog'. They still make nice hardware ... I would have bought an MPB for my last computer if they behaved better.

Lies and More Lies (2)

tuppe666 (904118) | about 8 months ago | (#44779089)

mobile apps are generally still created for their walled garden before more open platform even though it has a falling market share

Android has a larger market for Applications with Apple having only 900,000 Apps http://en.wikipedia.org/wiki/IOS_App_Store [wikipedia.org] vs Androids Play store http://en.wikipedia.org/wiki/Google_Play [wikipedia.org] 1+ million apps and the gap is going to get wider. The iphone is none existent in some markets, so no developers in those markets create iphone apps. The iphone also uses legacy hardware, and no gaming platform where android has many consoles, and cutting edge devices. The days of iOS exclusive or even first is long gone. Apple is in real trouble if they don't get the launch on the 10th right.

Re: Slashdot old timers. (0)

Anonymous Coward | about 8 months ago | (#44778863)

No. Back in the day, about a decade ago, Apple was considered completely bad news on Slashdot. They haven't been nerd-friendly since the Woz era. Slick marketing fucks have been in charge at Apple for decades now.

My Mac Sucks (2, Funny)

Anonymous Coward | about 8 months ago | (#44779137)

I don't want to start a holy war here, but what is the deal with you Mac fanatics? I've been sitting here at my freelance gig in front of a Mac (a 8600/300 w/64 Megs of RAM) for about 20 minutes now while it attempts to copy a 17 Meg file from one folder on the hard drive to another folder. 20 minutes. At home, on my Pentium Pro 200 running NT 4, which by all standards should be a lot slower than this Mac, the same operation would take about 2 minutes. If that.

In addition, during this file transfer, Netscape will not work. And everything else has ground to a halt. Even BBEdit Lite is straining to keep up as I type this.

I won't bore you with the laundry list of other problems that I've encountered while working on various Macs, but suffice it to say there have been many, not the least of which is I've never seen a Mac that has run faster than its Wintel counterpart, despite the Macs' faster chip architecture. My 486/66 with 8 megs of ram runs faster than this 300 mhz machine at times. From a productivity standpoint, I don't get how people can claim that the Macintosh is a superior machine.

Mac addicts, flame me if you'd like, but I'd rather hear some intelligent reasons why anyone would choose to use a Mac over other faster, cheaper, more stable systems.

Re:My Mac Sucks (1)

used2win32 (531824) | about 8 months ago | (#44779455)

Wow. You really need to raid the recycle pile at the garbage dump and get a faster computer...or several of them.

...or stop spamming this OLD comment that has appeared all over the place [google.com] .

Re:My Mac Sucks (1)

tipo159 (1151047) | about 8 months ago | (#44780029)

Are seriously comparing systems that are almost 20 year old and trying to make claims about modern systems based on that comparison?

Or is this a message from the past?

Re:My Mac Sucks (1)

farble1670 (803356) | about 8 months ago | (#44780771)

~ $ uptime
18:00 up 51 days, 7:08, 6 users, load averages: 1.10 0.87 1.45

this MBP is used daily for heavy development tasks. there's a reason why they are so popular.

also, do you really think that hardware produced over 20 years ago has any bearing on what is being produced today, good or bad, wintel or apple?

Payout a separate thing... (5, Informative)

Anubis IV (1279820) | about 8 months ago | (#44778969)

The payout is a separate thing that's a result of the settlements the DoJ struck with the publishers last year. It's part of the same issue, but it was settled out of court and wasn't part of this case.

For this ruling, the judge is barring Apple from engaging in "most favored nation" clauses (i.e. "our store will always have the lowest price for your product, or will be tied for having the lowest price") and is forcing them to stagger re-negotiations with the various publishers over the next few years in order to ensure that no collusion occurs. As I understand it, and I may be mistaken, they are not barred from engaging in agency model deals (i.e. "you get to set the price and we'll take X% cut"), which was actually a large part of what led to the price increase in the first place. Prior to that, the industry standard was the wholesale model (i.e. "we negotiate a price that you sell the book to us for, but then we can sell it to consumers for whatever")

Personally, I think the lawsuit was rather ridiculous, since Amazon was poised to destroy the entire industry, and the shift to the agency model was a necessary one to ensure the long-term health of the industry. Prior to Apple showing up with iBooks, Amazon was in a position to leverage its monopsony on the eBook market (like a monopoly, except it's when someone commands the buying side of the market, rather than the selling side) to force the publishers' hands and demand lower and lower wholesale prices. The publishers recognized the threat that posed them, so they worked out an agency deal instead, which led to lower short-term profits (despite the increased cost to consumers, simply because the agency model took a bigger cut than the wholesale model was at the time), but provided them with long-term control over their own prices.

Effectively, they took away Amazon's ability to do what was best for itself at the expense of the industry as a whole. After all, Amazon wins by lowering prices regardless of what happens to the publishers: by forcing them out it becomes the de facto publisher for virtually all eBooks thanks to its self-publishing tools, and by lowering their prices to unsustainable levels it pleases consumers and locks some of them into its ecosystem through the proprietary .azw and .kf8 eBook formats. Had the publishers been colluding to increase profits by gouging customers, I'd definitely be in support knocking them around for antitrust stuff, but the fact that they were making less money per unit sold under the agency model tells me that this was a long-term play to stay alive, rather than a short-term one to turn a quick buck at the expense of the consumer, and as such, the DoJ should have left it alone, even if it did increase the cost to consumers.

(Admitted lack of citation: I did read in multiple places over the last few months that profits were down under the agency model, but I'm knocking this comment out quickly, so I don't have time to look them up. Sorry. Doubters and welcome to doubt.)

Cheaper Prices (3, Interesting)

tuppe666 (904118) | about 8 months ago | (#44779029)

Personally, I think the lawsuit was rather ridiculous, since Amazon was poised to destroy the entire industry,

Ignoring your waffle. By Industry you mean "bleeding customers" by Middle Men who are desperate to remain relevant post paper. Raising ebooks prices has been *damaging* to the ebook industry. Hopefully these parasites will become obsolete one day, how they treat authors is appalling. hopefully we will see a rise in self publishing.

self publishers borderline scammers (0)

Anonymous Coward | about 8 months ago | (#44779133)

If only the people who were doing self published books would actually write books worth reading. Right now they're so bad I feel like I've been scammed every time I buy one.

Re:self publishers borderline scammers (1)

zippthorne (748122) | about 8 months ago | (#44781667)

The problem is that self-publishing only solves one of the problems that traditional publishers have historically addressed.

Editing and Triage are other major issues, and the traditional publishing industry seems to be helping to close the gap by skimping on both....

I don't see why those can't be solved without traditional publishers, but there's probably always going to be a need for someone to edit, and for someone to front the money for that to happen (and, choose what gets edited and what gets ignored, by extension...) for authors who are new and aren't already wealthy enough to cover the costs.

Re:Cheaper Prices (2, Interesting)

Anubis IV (1279820) | about 8 months ago | (#44779721)

I'm actually with you on hoping for a rise in self-publishing, though not as it is now, nor am I rooting for the demise of the publishers, since I think they serve a valuable function in the market.

Publishers, despite their name, actually do quite a bit more than publishing. Really, their worth today is in their editing and marketing, and both of those are EXTREMELY important in the self-publishing market, where most of the stuff that's there simply isn't worth our time, making it hard for anything that's good to stand out. I'd love to see the publishers shift their role from publishing to marketing, where for a cut of the profits they agree to handle the editing and advertising of the book. The result would be that they'd only be doing it for books that they thought were good enough to turn a profit, which means that the stuff we'd be hearing about would be the stuff that's more likely to be worth reading.

More or less, they should get out of the dying middleman business and focus on the added-value business that they are uniquely capable of offering.

As for Amazon, my complaint was more that Amazon was on the verge of engaging in anticompetitive practices by leveraging their monopsony in the wholesale market to destroy the publishers, which would, in turn, boost their own self-published eBooks business. There's nothing wrong with self-publishing destroying the publishers, in and of itself, but I do have a problem when a company leverages their control over the market to do so, which is what Amazon was set to do.

Re:Cheaper Prices (1)

LordLucless (582312) | about 8 months ago | (#44782085)

As for Amazon, my complaint was more that Amazon was on the verge of engaging in anticompetitive practices by leveraging their monopsony in the wholesale market to destroy the publishers, which would, in turn, boost their own self-published eBooks business.

You mean, Amazon was guilty of precrime? It wasn't what they had done, it was what you feared they might do.

Re:Payout a separate thing... (1)

0123456 (636235) | about 8 months ago | (#44779169)

Personally, I think the lawsuit was rather ridiculous, since Amazon was poised to destroy the entire industry, and the shift to the agency model was a necessary one to ensure the long-term health of the industry.

The lawsuit was nothing to do with Amazon. It was to do with Apples actions and those of the big publishers.

Re:Payout a separate thing... (1)

Anubis IV (1279820) | about 8 months ago | (#44779579)

I'm aware of that. What I was intending to convey was that they were responding to an anticompetitive threat posed by Amazon's monopsony, and as such, it's strange that they're being punished for taking necessary steps to protect their businesses against that threat.

As I've clarified elsewhere, I do believe that they engaged in price fixing, but that came in the form of the most-favored nation (MFN) clause that Apple had in its contracts. The switch to the agency model, which is what was largely responsible for the increase in prices, was not in the least anticompetitive. It increased their own costs substantially, which they partially passed on to consumers.

Re:Payout a separate thing... (1)

0123456 (636235) | about 8 months ago | (#44779889)

I'm aware of that. What I was intending to convey was that they were responding to an anticompetitive threat posed by Amazon's monopsony, and as such, it's strange that they're being punished for taking necessary steps to protect their businesses against that threat.

You don't get this whole 'law' thing, do you?

Re:Payout a separate thing... (1)

Anubis IV (1279820) | about 8 months ago | (#44780165)

Hmm...apparently you either skipped over or didn't understand the relevance of what I said after the part you quoted. Let's see if a car analogy helps, since I actually think the fault is mine for not communicating well enough.

If you flew on an airplane and then later that day got a speeding ticket while driving home from the airport, you'd be shocked if you saw that the speeding ticket claimed you were traveling at (car's speed + plane's speed), and that you were being punished accordingly, right? Clearly you deserve to be punished for speeding, but the punishment should be in line with how much you were actually speeding, rather than based on how fast you were traveling while doing perfectly legal activities earlier in the day.

That's kinda like the problem I was discussing here. Amazon may not have been on trial, but their actions explain why the publishers were forced to switch to an agency model (which is perfectly legal), which led to increasing prices as a result of the greater cut that the retailer was taking (also perfectly legal). At the same time, they also engaged in price fixing by using a most-favored nation clause in their contracts with Apple (which is illegal), but despite the fact that the agency model was perfectly legal (Amazon has even negotiated agency model contracts with all of the publishers since then), the government has made no effort to separate the increase in costs that resulted from legal activities, instead just using the entirety of the increase in cost to calculate the size of the compensation.

Does this clarification make sense? Basically, I'm trying to point out that they are being punished for legal actions they took in response to Amazon's actions. Hence why I brought up Amazon, even though Amazon isn't on trial here. That the publishers also deserve to be punished for the illegal activities they engaged in is true, but I figure that we all already understand that well enough, so why beat a dead horse?

Re:Payout a separate thing... (2)

bgalbrecht (920100) | about 8 months ago | (#44781697)

IANAL either, but they're not being penalized for doing a bunch of legal activities, they're being penalized for the collusion. The penalty is a limitation in their ability to make contracts using the legal activities they used during the collusion so that it will be harder for them to collude again in the near future. This includes forcing Apple to stagger their contracts with the publishers.

There's nothing illegal in the way Amazon got it's monopsony by sometimes selling ebooks cheaper by accepting lower profit margins, providing an easy way to buy ebooks and install them on the ereader, and creating ereaders that could only decrypt DRMd ebooks sold by Amazon. In general, once a Kindle owner, always a Kindle owner thanks to publisher DRM. If the publishers wanted to make it harder for Amazon to keep their monopsony, they should have dropped DRM or changed their contracts to stipulate the ebook format so Amazon couldn't lock Kindle owners into Amazon's proprietary format. Just because the publishers were afraid that Amazon was going to use it's monopsony to keep prices lower (a la Wal-Mart) doesn't give them the right to engage in collusion to fix prices.

Re:Payout a separate thing... (0)

Anonymous Coward | about 8 months ago | (#44780815)

Did they ever talk to the DOJ and voice concerns over the "monopsony" which they helped create by relying on amazon or conspire with Apple?

One of these choices is legal, the other is not...

Re:Payout a separate thing... (1)

Anubis IV (1279820) | about 8 months ago | (#44781205)

No clue why you put scare quotes around "monopsony" when it's a real word that's in common use. Feel free to look it up in a dictionary. It's the on the other side of the coin from a monopoly (which is what happens when there's only one seller in a market, and with which we're all much more familiar)

Anyway, in response to your question: I have no clue. From what I understand of the situation, the DoJ targeted Apple and the publishers in response to complaints over rising prices. By no means am I suggested that the publishers and Apple are blameless in this. They definitely engaged in price fixing, as I've made an effort to emphasize in some of my other comments (admittedly, I failed to do so in my initial one).

But not everything they are being punished for was illegal. Much of the increase in price for which they are being compelled to compensate consumers was the result of costs that were due to the switch to the agency model, which was an entirely legal business move. In fact, Amazon now has agency model contracts with all of the major publishers, and Apple is permitted to do the same when it re-negotiates in the future.

Re:Payout a separate thing... (0)

Anonymous Coward | about 8 months ago | (#44781485)

I didnt quote it because its not a word... http://en.wikipedia.org/wiki/Monopsony [wikipedia.org]
In the microeconomic theory of imperfect competition, the monopsonist is assumed to be able to dictate terms to its suppliers, as the only purchaser of a good or service, much in the same manner that a monopolist is said to control the market for its buyers in a monopoly, in which only one seller faces many buyers.

Why is there only one "buyer"? Because they are good at what they do or because of illegal contracts? When the ebook market was new it started out with only a few players (sony being one of the other big ones). Sony was more interested in being Sony (controlling things from end to end) whereas amazon sold you a device and content from a number of publishers. Amazon chose to take lower margins on ebooks to encourage people to buy its devices (similar to grocery stores competing on the price of milk to get you in). The publishers didnt like this as the ebook vs printed book price was getting wider. They have higher margins on the printed versions and wanted to close this gap by raising the ebook prices. Enter Apple, who offered to sell books for 12.99 and 14.99 (vs the 9.99 amazon was charging) but only if EVERYONE else moved to these price points (why would i buy a book on my ipad for 14.99 when i could get it from amazon for $5 less?). S

Read the steve jobs comment at the ipad launch about how the prices "wont be different"? Why not?
There is also B&N, and a number of smaller "buyers" and nothing stopped the publishers from creating their own storefronts.

Know why the publishers switched to the agency model? Because Apple was the ringleader. They called all the other publishers and acted as a central force to move everyone to the agency model. Amazaon wasn't in favour of this move, but when all 5 publishers simultaneously push for it what options do they have?

Apple's concerns were simple, 30% margin and no competition on price via the MFN clause. This seems legal to you?

Re:Payout a separate thing... (1)

Anubis IV (1279820) | about 8 months ago | (#44781995)

No, it doesn't, and I already said as much.

And I've already addressed your other (quite valid) points in other comments. To summarize, however, B&N was a bit player at the time with less than 10% market share compared to Amazon's 90%, so unless the publishers were willing to tank their own sales, they had no options until Apple came along, and the MFN clause was certainly illegal, since it was a form of price fixing.

Beyond that, I don't really have much to add, since I agree with most of what you said.

Re:Payout a separate thing... (0)

Anonymous Coward | about 8 months ago | (#44779573)

since Amazon was poised to destroy the entire industry

As usual people like you conflate/confuse the publishing industry (middlemen) with the authoring/creation industry. The have little to do with each other no matter how much the publishing industry likes to pretend otherwise.

The problem with current IP law is that it, pretty much by definition, rewards those who are in position to copy a lot (i.e. publishers/gatekeepers/marketers) and not those who do the actual creation (i.e. authors). That's very wrong but unfortunately applies to all forms of current IP.

Re:Payout a separate thing... (1)

Anubis IV (1279820) | about 8 months ago | (#44779661)

A fair point, and one I actually agree with. I did conflate the two in my comment. I'm certainly not above admitting that.

I do agree that authors deserve to be better compensated, but at the same time, while I do think that publishers take more than their fair share, I also think that they do provide quite a bit of benefit to the industry, since they serve to ferret out the diamonds in the rough. As others have mentioned, buying self-published books is largely an exercise in futility, since it's hard to find anything of quality. They also help to polish the diamonds by providing editors, since many authors are capable of crafting a well-written story while being incapable of doing so without having distracting grammatical and spelling errors present.

Personally, I would like to see a move to self-published with the current publishers being pushed more into the marketing side of things (i.e. they'll help you edit and advertise your book in exchange for a cut of the profits). That'll help to ensure that the books we hear about tend to be the ones that someone actually thinks are good enough to turn a profit, rather than being the dregs from the bottom of the barrel.

Pardon the tangent. :)

Re:Payout a separate thing... (0)

Anonymous Coward | about 8 months ago | (#44780069)

There is a benefit. But the reason I haven't bought an eBook device is that they books are more expensive on them than when printed on dead trees and shipped over thousand kilometers. I'll be in trouble next time I move though. ...oh, moderations, oh well.

Re:Payout a separate thing... (1)

Lincolnshire Poacher (1205798) | about 8 months ago | (#44782313)

while I do think that publishers take more than their fair share, I also think that they do provide quite a bit of benefit to the industry, since they serve to ferret out the diamonds in the rough

You keep saying this, but I would say about half of the ' properly published' books I have bought over the years have been junk. And this is in the field of factual books ( I don't bother with fiction ). That's no better than my record on buying self-published books.

And it's actually self-published books, or those from tiny speciality publishers, which are considered by the market to be most valuable years after publication.

Mainstream published books? Just rehashes of what someone else wrote and once the marketing-induced fad dies off in a year or so they'll be worth pennies on the second hand market.

Re:Payout a separate thing... (1)

Anubis IV (1279820) | about 8 months ago | (#44779805)

Okay, so, I actually already disagree with some of what I said here, such as my assertion that "the lawsuit was rather ridiculous".

I revised some of my opinions [slashdot.org] elsewhere in these comments. At this point, I take issue, not so much with the lawsuit itself, but more with the size of the damages being pursued, which I feel are not in alignment with the actual damage caused by the anticompetitive behavior in which Apple and the publishers engaged (and which I do agree occurred). Put differently, I think they're being punished unfairly for having an increase in costs that came from changing to an agency model (which was not illegal to do) at the same time that they engaged in price fixing (which is obviously illegal), since the majority of the price increase was the result of the change in business model, rather than the fixing of prices.

Also, I didn't mean to suggest that I'm a fan of the publishers or that they should get a pass from ever being disrupted by new technologies (e.g. self-publishing on the Internet). Rather, I took issue with Amazon being set to engage in monopsonistic behavior that could have damaged the publishers irreparably while benefitting Amazon immensely. By all means, kill the publishers off with self-publishing. I'm cool with that, though I'd rather see them retain their function as editors and marketers, since I do believe that they do a good job of finding and polishing the diamonds in the rough, which is a valuable service, as anyone who's ever tried to purchase a self-published book can tell you. ;)

Re:Payout a separate thing... (1)

bgalbrecht (920100) | about 8 months ago | (#44781801)

I've bought a lot of ebooks (well over a thousand), and most of them I bought on sale before agency pricing model took effect or after the settlements. I never bought any ebooks from Amazon before agency pricing model, and I calculated that I would have had to pay triple, at least $3,000 more, after agency pricing model took effect over what I paid. With that sort of price increase, I don't think they're being unfairly punished.

While Amazon's monopsony might make it harder for publishers to raise prices, they weren't alone in discounting best seller ebooks or hardcovers, sometimes even below cost. Who knows, maybe it would have forced the publishers to revise their business practices so they aren't so dependent on the blockbuster authors with the several million dollar advances. As for being disrupted by new technologies, it would be trivial for the publishers to compete with the used book stores by adding a new pricing tier at about half the new paperback book price when the paperback print run is over (instead of raising it to trade paperback prices like some publishers are doing). But they're not going to do that because they're afraid it will cannibalize the sales of their newly released books.

Re:Payout a separate thing... (1)

walterbyrd (182728) | about 8 months ago | (#44780099)

Effectively, they took away Amazon's ability to do what was best for itself at the expense of the industry as a whole. After all, Amazon wins by lowering prices regardless of what happens to the publishers

I am not sure that is the way it works. The publishers can make any sort of deal with Amazon that the publishers want. The publishers could tell Amazon, and anybody else, this book has to sell for at least $X. If Amazon did not agree, then Amazon could not sell the book, and publishers would sell the ebook through Apple, or B&N, or whatever - and Amazon would not want that.

Your assertion that Amazon ever had complete control of the pricing does not seem accurate to me. Can you cite your source for that?

Re:Payout a separate thing... (0)

Anubis IV (1279820) | about 8 months ago | (#44780471)

Saying "this book has to sell for at least $X" is actually considered a form of price fixing when you're working with a wholesale model. That's why the "S" in "MSRP" stands for "suggested", rather than being an "R" for "required". In fact, Apple has run into that issue with their electronics, since premium pricing is part of their brand image, yet it's difficult to enforce it without running afoul of antitrust legislation.

And regarding my assertion, I think there may be a misunderstanding, since some of what you've said is inapplicable to the time period I was talking about.

In referencing wholesale prices, I hoped to make it clear that I was referring to the time back when wholesale pricing contracts still existed between Amazon and the publishers. Amazon stopped using wholesale pricing with the publishers in early 2010 (largely because of the strengthened positions the publishers gained as a result of Apple's entry into the space). This was before the iPad was announced, so Apple was not a player in the space at the time, though this was the time when they were working out backroom deals with the publishers.

My assertion was that Amazon controlled the wholesale prices by virtue of being a monopsony, which should be readily apparent, given that at the time (and even now) they were by far the largest purchaser of eBooks from publishers (citation: "In 2009, Amazon’s market share for e-book sales was nearly ninety per cent" [newyorker.com] ). Essentially, no one else was buying eBooks wholesale at anywhere close to the volume they were, so they could dictate prices, since the only alternative the publishers had was to tank their own sales by only putting them up for sale on the 10% market share Nook. I wish I could cite something more, but other than their overwhelming market share, I don't know how else I could cite the fact that they had a strong position from which they could negotiate pretty much any price they wanted.

The arrival of Apple on the scene helped to break Amazon's grip by introducing a platform that was sure to have a massive installed based, and that allowed the publishers to take a stronger stance in their next round of negotiations with Amazon in early 2010, letting them work out agency deals that put the control of prices back in their own hands. The agency model came at a higher cost to them, since the piece of the pie the retailer took was larger than what they received at that time under the wholesale model, but it ensured that the size of the pie wouldn't shrink to the point where the publishers couldn't survive.

Re:Payout a separate thing... (0)

Anonymous Coward | about 8 months ago | (#44780799)

So, apple did all this for altruistic reasons? Sure was nice of them to come and "fix" the problem with Amazon destroying the market. Wonder what they got out of it?
Why don't you take a look at some of the "publishers" financial statements and determine for yourself if they are being "destroyed".

If they are "making less under the agency model" its probably because of two things:
1) Apple's insistence on a 30% cut.
2) The long term strength they gain over Amazon with the "pact" vs them trying to take amazon on individually outweighed the costs.

Re:Payout a separate thing... (1)

Anubis IV (1279820) | about 8 months ago | (#44781145)

I never suggested Apple did it for altruistic reasons, I never said they are being destroyed (I said that Amazon was poised to do so, but I never said that it actually had, nor would I say that), I agree fully that the agency model is more expensive for them because of the retailer's cut being larger, and them coming back to Amazon to negotiate agency deals was not the problem (the problem was the MFN clause in their contract with Apple).

None of that changes what I said, though please see my partial retraction in a reply to myself.

fuck3r (-1)

Anonymous Coward | about 8 months ago | (#44779259)

of *BSD asswipes smells worse than a be a lot slower things the right fact there won't you got the8e. Or Hapless *BSD backwards. To the FreeBSD core team

This seems weak. (2)

apcullen (2504324) | about 8 months ago | (#44779427)

Seems like Apple is getting let off very easy after carefully organizing the screwing-over of consumers.

So they get to try this again in 5 years?

And shouldn't the solution be forward looking? Is Apple actually doing the same thing with movies or other content besides books now and getting away with it?
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