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Apple Agrees To $450 Million Ebook Antitrust Settlement

Soulskill posted about 2 months ago | from the throwing-the-ebook-at-them dept.

Books 91

An anonymous reader writes: Last year, a U.S. District Judge ruled that Apple conspired with publishers to control ebook prices in violation of antitrust laws. Apple launched an appeal which has yet to conclude, but they've now agreed to a settlement. If the appeal verdict goes against Apple, they will be on the hook for $450 million, most of which will go to consumers. If they win the appeal, they'll still have to pay $70 million. $450 million is much more than the other publishers had to pay, but much less than the expected penalty from a damages trial set for August (and still only about one percent of Apple's annual profit).

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Apple and Justice (0)

Bob_Who (926234) | about 2 months ago | (#47470029)

Best partners in crime since Genesis and Original Sin

Fanbois (-1)

Anonymous Coward | about 2 months ago | (#47470149)

What happened to the Apple fanbois of yesteryear?

Where are you?

What happened to the immediate moderation to "Troll" or "Flamebait"?

What has become of you fanbois?

Say something, anything, negative about Apple or god for bid, Steve Jobs, and the +5 Flames came.

What has become of you fanbois?

Where are the colorful posts eviscerating the people like the parent?

Where are you my bois?

Do we need to put you on teh endagered species list?

The World is boring with just the F/OSS fanbois.

Where are you?

The Microsofties are running amok.

Where ARE YOU?

Re:Fanbois (4, Interesting)

Noah Haders (3621429) | about 2 months ago | (#47470363)

I'll bite... this whole ebook antitrust issue is a joke. the whole point of Apple's ebook efforts was to provide a bulwark against the Amazon Ultron-like eater-of-worlds mopolistic behavior. It was a last ditch effort from apple and the publishers to try and prevent Amazon from eating and owning the entire author and book industry, from writing books to editing them to printing them to selling them.

the irony of course is that Amazon is the one that pushed the DOJ in the first place, and that an "independent" lawyer involved on the plaintiff's side does a lot of work for amazon and even works out of Amazon's building.

this whole ebooks trial is like DOJ partnering with M$ to crush OS/2. Welome to the monoculture, I hope your book industry shaped exclusively on five star reviews.

Re:Fanbois (0, Troll)

ArcadeMan (2766669) | about 2 months ago | (#47470435)

This reply will probably be the best one of the whole thread but stupid anti-Apple zealots, Windows/Android/Linux fanboy moderators will probably mod it into oblivion because facts are not as important as their twisted point of view of Apple.

Re:Fanbois (4, Insightful)

Namarrgon (105036) | about 2 months ago | (#47471567)

Sadly for you, the "facts" are on Amazon's side here. Apple was being legally outcompeted, and resorting to illegal collusion needs to be smacked down, regardless of how much they hated seeing their potential marketshare slipping away. Maybe they should have tried to compete by lowering prices further, rather than raising them? Would be a better outcome for consumers.

Re:Fanbois (0)

ArcadeMan (2766669) | about 2 months ago | (#47474493)

What I've always read is that the prices set by Apple and publishers were lower than the prices from Amazon.

Re:Fanbois (1)

Namarrgon (105036) | about 2 months ago | (#47480735)

I'm curious as to where you read that. My understanding is that book prices rose, by 30-50% [cnet.com] .

Re:Fanbois (4, Insightful)

hairyfeet (841228) | about 2 months ago | (#47474255)

Uhhh..spin it how you want but the emails showed beyond a doubt that Apple was price fixing and sorry, that is illegal. Also if you think Apple was price fixing "for good of the people"....BWA HA HA HA HA, that is damned funny, it was to increase their share and make sure no competitor could undercut them, again going against free market competition.

Of course they could always do like Amazon and take less profit per sale...ha ha ha, who am I kidding, Apple take less? never!

Re:Fanbois (5, Informative)

rahvin112 (446269) | about 2 months ago | (#47470697)

Regardless of what you think of Amazon and them being a monopoly, Apple colluded with publishers to raise the price of ebooks. It was anti-competitive at it's core and it's illegal under US law. Not to even mention that it cost the average US buyer $5 per book.

The only joke was that it took them more than 5 years to sue over it because everyone buying ebooks at the time noticed the dramatic $5 price increase in all books. After the Apple deal there were many ebooks that cost MORE than the paper book.

Re:Fanbois (2, Insightful)

Noah Haders (3621429) | about 2 months ago | (#47471687)

the difference is Amazon is dumping ebooks on the market at a price that is impossible to compete. 100% guaranteed they will sell books for 99 cents until all other parties are dead, then jack up the price while freezing the publishers out. This is how monopolies operate.

Re:Fanbois (0)

Anonymous Coward | about 2 months ago | (#47471867)

How hard is it to publish an eBook?

Re:Fanbois (3, Insightful)

Noah Haders (3621429) | about 2 months ago | (#47472035)

not too much perhaps. how hard is it to write a book, how hard is it to edit a book, how hard is it to curate the book industry so the most promising books recieve support and funding, how hard is it to build an industry that supports authors so they can live and work and be professionals, so the entire publishing industry doesnt devolve into 99 cent fan fic? pretty darn hard.

Re:Fanbois (-1)

Anonymous Coward | about 2 months ago | (#47472815)

No ebook should cost more than $0.99 ever because the author only has to write the book once and can make as many copies as they want for free. The total cost to actually write a book is basically nothing.

Re:Fanbois (2)

SB2020 (1814172) | about 2 months ago | (#47473393)

Same as all software. AmIRight?

Re:Fanbois (0)

Anonymous Coward | about 2 months ago | (#47473857)

For an app that can be created primarily by one person with help from a handful of others usually in under one year, in a world of app stores where a successful app can easily pull in tens or hundreds of millions of sales, and anything worthwhile nets at least a few hundred thousand?

Yes. Why do you ask?

Re:Fanbois (0)

Anonymous Coward | about 2 months ago | (#47474135)

Maybe if books came with the same levels of support.

You should probably just leave if stupid shit like this is what you post.

Re:Fanbois (0)

Anonymous Coward | about 2 months ago | (#47480669)

You let me know when it costs millions of dollars and requires dozens, if not hundreds, of highly skilled people to write a book.

Re:Fanbois (2)

nyctopterus (717502) | about 2 months ago | (#47473241)

Having done this twice, I can say that it's trickier than you'd think if you want to do anything but a long string of text. The tools for publishing ebooks are in the stone-age, and files still require a lot of manual tweaking (first time out I gave up on automated tools and wrote the entire thing by hand to the spec). Then you have the various rules of distributers and their buggy validators, which means the process can be very time-consuming.

Re:Fanbois (0)

Plumpaquatsch (2701653) | about 2 months ago | (#47475023)

Regardless of what you think of Amazon and them being a monopoly, Apple colluded with publishers to raise the price of ebooks. It was anti-competitive at it's core and it's illegal under US law. Not to even mention that it cost the average US buyer $5 per book.

Too bad (for your argument that is) that in reality ebook prices actually fell in all stores but Amazon. Even on Amazon, only those Amazon had sold below price rose in price. Provable fact.http://online.wsj.com/news/articles/SB10001424052702304355104579236261045331876 [wsj.com] (paywalled) http://www.salon.com/2014/01/12/amazons_bogus_anti_apple_crusade/ [salon.com]

Re:Fanbois (3, Informative)

Anonymous Coward | about 2 months ago | (#47471331)

the whole point of Apple's ebook efforts was to provide a bulwark against the Amazon Ultron-like eater-of-worlds mopolistic behavior.

It was replacing one monopoly with another, in fact the Apple case was worse because it was Apple setting the baseline price and forcing publishers to sell at or above that price, Amazon did not collude with publishers to create a cartel like Apple tried to do.

The Amazon situation is bad, but Apple's cartel was worse.

Re:Fanbois (2)

Richard_at_work (517087) | about 2 months ago | (#47473117)

Damn right an Apple monopoly was the worse situation - I can read my Kindle books on Android, iOS, Windows Phone, Windows and a whole load of other platforms. Where can I read my Apple iBooks? Uhm... iOS.

Re:Fanbois (1)

Plumpaquatsch (2701653) | about 2 months ago | (#47475039)

the whole point of Apple's ebook efforts was to provide a bulwark against the Amazon Ultron-like eater-of-worlds mopolistic behavior.

It was replacing one monopoly with another, in fact the Apple case was worse because

... Apple was never anywhere near a monopoly - and that's obviously the worst kind of monopoly.

Re:Fanbois (4, Insightful)

farble1670 (803356) | about 2 months ago | (#47471847)

the whole point of Apple's ebook efforts was to provide a bulwark against the Amazon Ultron-like eater-of-worlds mopolistic behavior. It was a last ditch effort from apple and the publishers to try and prevent Amazon from eating and owning the entire author and book industry, from writing books to editing them to printing them to selling them.

so your whole argument is that it was okay for apple to commit a crime to thwart amazon from becoming more successful? if amazon ended up breaking laws, so be it, and let them stand accountable at that point.

apple isn't some angel coming down from on high to protect the poor little ebook authors. they were simply trying to thwart a competitor from becoming dominant in the field. they wanted a (larger) piece of the pie, and they broke the law trying to get it.

the irony of course is that Amazon is the one that pushed the DOJ in the first place, and that an "independent" lawyer involved on the plaintiff's side does a lot of work for amazon and even works out of Amazon's building.

i don't think you understand what irony means.

Re:Fanbois (0)

Anonymous Coward | about 2 months ago | (#47472801)

Apple was trying to operate an ebook cartel and they were found guilty. Suck it up.

Re:Fanbois (1)

Sockatume (732728) | about 2 months ago | (#47473201)

If Apple and publishers wanted to attack Amazon's monopoly position, there is a legal mechanism to do so. That they chose a mechanism that make them all an enormous amount of money should tell you something about whose side they're on, and it's not yours.

Re:Fanbois (1)

Noah Haders (3621429) | about 2 months ago | (#47474697)

Wrong

Re:Fanbois (0)

Anonymous Coward | about 2 months ago | (#47479655)

The RDF is strong in you.

That'll show them! LOL (0)

Anonymous Coward | about 2 months ago | (#47470081)

Why even bother.

Fines don't mean anything to them! (4, Insightful)

Anonymous Coward | about 2 months ago | (#47470111)

For a company which makes billions (and has probably made enough profit from this endeavour to justify the fine) fines like this mean nothing. Until people start getting jailed like normal people would do things like this will continue to happen. You can bet your ass if a CEO got 5 years in jail that company wouldn't set a single foot wrong after that for fear of it happening again.

Re:Fines don't mean anything to them! (2)

ShanghaiBill (739463) | about 2 months ago | (#47470493)

You can bet your ass if a CEO got 5 years in jail that company wouldn't set a single foot wrong after that for fear of it happening again.

Many murderers spend less than 5 years in jail. If we start jailing managers for bad decisions, you would hear a giant sucking sound as company HQs headed overseas, taking all the management and administrative jobs with them. There is always someone advocating the "iron fist" version of justice, but history shows that it really doesn't work well. We used to execute people for stealing bread, but people still stole bread. Punishment should be fair and proportionate.

Re:Fines don't mean anything to them! (2)

PopeRatzo (965947) | about 2 months ago | (#47470651)

Many murderers spend less than 5 years in jail.

I'm going to have to go ahead and ask for a citation on that one, bro.

Re:Fines don't mean anything to them! (3, Informative)

ShanghaiBill (739463) | about 2 months ago | (#47471099)

Many murderers spend less than 5 years in jail.

I'm going to have to go ahead and ask for a citation on that one, bro.

In 1987, the average time-served for 2nd degree murder in Florida was 6.8 years [state.fl.us] . That is more than five, but that is the average, so many murders served less time. Sentences are much more than that, but "time served" is, on average, only 60% of the original sentence, and in many cases, less than half. Plenty of other states have a reputation for more lenient sentencing than Florida, and more lenient parole boards.

Re:Fines don't mean anything to them! (0)

Anonymous Coward | about 2 months ago | (#47471357)

In 1987, the average time-served for 2nd degree murder in Florida was 6.8 years [state.fl.us] . That is more than five, but that is the average, so many murders served less time.

Yes, nearly 30 years ago many murderers in Florida served less than 6.8 years in jail, that doesn't create a basis for the claim that many murderers spend less than 5 years in jail.

Re:Fines don't mean anything to them! (3, Interesting)

PopeRatzo (965947) | about 2 months ago | (#47471723)

In 1987, the average time-served for 2nd degree murder in Florida was 6.8 years [state.fl.us]. That is more than five, but that is the average, so many murders served less time.

Do you know how to read a graph?

If you look at the page you link to, you will see that the 6,8 year average for second degree murder was twenty years ago. The average by 2003 climbed to 21,6 years and the average murderer close to 27 years.

Now, since your original statement was in the present tense I'm still going to have to go ahead and call bullshit. The average SECOND DEGREE murder convictee will spend 21.6 years in the joint as of 2003, and the sentences were on the rise at that time. With all the mandatory sentencing laws going around, I will bet you that the average is higher today, ten years later.

Also, remember we're talking about Florida. If you're white and you kill a black guy in Florida, and you pay a $25 fine and get two tickets to a Marlins game and a coupon for more ammo.

So, there's still no indication that "many murderer spend less than 5 years in jail". You wanna hit up the Google and take another shot at it? I've got nothing to do tonight.

Re:Fines don't mean anything to them! (0)

Anonymous Coward | about 2 months ago | (#47471229)

Here's one:
http://www.huffingtonpost.com/2014/01/17/mike-nealey-5-years_n_4617632.html

" ...when the woman sentenced for the felony murder got slapped with a five-year sentence..." (subtract 9 months for time served while awaiting trial.)

Another: ...Jurors sentenced a San Antonio man to 7 years in prison Thursday... ...will have to serve at least half of the sentence before he is eligible for parole
http://www.mysanantonio.com/news/local_news/article/Jurors-grant-short-sentence-in-road-rage-murder-781017.php
Granted he may not get parole, but potentially he can be let out in 3.5 years.

And Portugal being one example of where the penalty for Manslaughter maxes out at 5 years:
"Manslaughter, which art. 136 of the Penal Code refers to as homicide caused by negligence, is punishable with a prison term of no less than 6 months and no longer than 3 years, or a fine. If the death is caused by gross negligence the penalty the prison term is of 6 months to 5 years."

3 citations, five minutes of googling.

Re:Fines don't mean anything to them! (1)

PopeRatzo (965947) | about 2 months ago | (#47471539)

Here's one:

That's an interesting definition of "many". Two examples. One of them "potential". And one in, wait for it...Portugal. Those add up to a very damning indictment of the US justice system.

"They're legion, I tell you, just so...many murderers getting out in less than five years!"

And wait a minute...what's this? Why wouldn't you count the nine months awaiting trail against your sentence? So, when I add all those up, and carry the one, and multiply by a million, I get a grand total of ZERO EXAMPLES OF MURDERERS GETTING OUT IN LESS THAN FIVE YEARS.

So, by my reckoning, that means you and your buddy ShanghaiBill are a little bit full of shit on this one, pal. Not many, not one. Not. Any.

Re:Fines don't mean anything to them! (0)

Anonymous Coward | about 2 months ago | (#47472223)

You failed to mention, one of his examples was manslaughter, not murder. They're legally very different.

Yeah, that's what scares me (1)

rsilvergun (571051) | about 2 months ago | (#47471143)

Companies don't pay fines until their less than the profit made from the behavior. It's scary to think how much money Apple must have made off fixing the markets.

Re:Fines don't mean anything to them! (1)

OutOnARock (935713) | about 2 months ago | (#47471415)

the idea from Prizzi's Honor, where you take what they find most valuable....

throw the CEO in jail, another one pops up in their place...

However, reduce the entire board of director's salaries to $100K a year for 5 years.....

Now they will think twice......

Also, the difference in their current salary and $100K does NOT stay in the company, it is divided up equally to all schools or something of that nature...

LMAO (1, Insightful)

Pope (17780) | about 2 months ago | (#47470117)

Yeah, much better to let Amazon to run all the book publishers out of business. :rolleyes:

Re:LMAO (4, Insightful)

whoever57 (658626) | about 2 months ago | (#47470243)

Yeah, much better to let Amazon to run all the book publishers out of business. :rolleyes:

Yes, the DOJ should totally prosecute the theoretical future anti-trust actions by Amazon, while ignoring the actual increase in prices brought about by market manipulation of Apple. :rolleyes.

Re:LMAO (0)

Anonymous Coward | about 2 months ago | (#47470443)

Correction: Apple let publishers set prices and was not in a position to manipulate prices at all.

Re:LMAO (1)

rahvin112 (446269) | about 2 months ago | (#47470727)

Apple colluded with publishers to raise prices. Because of their action the average ebook increased in price $5. Everyone buying ebooks at the time noticed this overnight increase that priced many ebooks more expensive then the printed version.

Price collusion is illegal under US law. In many many way's it's worse than a monopoly.

Re:LMAO (0)

Anonymous Coward | about 2 months ago | (#47470903)

Apple colluded with publishers to raise prices.

Did they? Is there any evidence that Apple cared about the price? Because there are and always have been plenty of free and low-cost titles available. Apple offered the publishers the ability to set their own prices in exchange for being guaranteed the best price because they weren't willing to enter the market at a loss.

Because of their action the average ebook increased in price $5

Source?

Everyone buying ebooks at the time noticed this overnight increase

Ah, hyperbole. The lazy man's explanation.

Price collusion is illegal under US law. In many many way's it's worse than a monopoly.

In what way is illegal price fixing worse than an illegal monopoly? Amazon using its market power to set prices is no less a market failure than companies colluding to offset that market power.

Whether Apple's actions ultimately exceeded the limits of competition law, it's clear you don't have the first clue why.

Re:LMAO (2)

alexander_686 (957440) | about 2 months ago | (#47471087)

Is there any evidence that Apple cared about the price?

No, but that misses the point. Apple wanted into the book market. The publishers wanted to break Amazon's hold on the market so they could jack the prices up. Thus the collusion began. Apple was a knowing participant in this collusion – that was their price of entry into the online book market.

Amazon using its market power to set prices is no a market failure......

I will point out that it was the publishers, not Amazon, which set the wholesale prices. When Amazon lowered its retail price below the wholesale price Amazon had to eat that loss. Which leads us too.

In what way is illegal price fixing worse than an illegal monopoly?

When customers get a better deal. Let's strike the illegal part. In America monopolies are illegal if they hurt the customer. There is nothing illegal in running a business with zero to no profits to grab market share, which is what Amazon was doing. If they were screwing around with their competitors or their customers - whole different story. (Needless to say this get subtle and complicated fast, dealing which market structure, etc.)

Re:LMAO (0)

Anonymous Coward | about 2 months ago | (#47472489)

No, but that misses the point. Apple wanted into the book market. The publishers wanted to break Amazon's hold on the market so they could jack the prices up. Thus the collusion began. Apple was a knowing participant in this collusion – that was their price of entry into the online book market.

It can't miss the point, though, because that's the whole point: everything after your first sentence is completely legal, and in fact one of the key findings of the case is that Apple's imposition of price caps thwarted publishers' plans for even higher prices.

I will point out that it was the publishers, not Amazon, which set the wholesale prices. When Amazon lowered its retail price below the wholesale price Amazon had to eat that loss.

But why was Amazon eating the loss? In an effort to set the market price so that other market entrants would have to incur steep losses in order to compete with them on price. No other reason.

When customers get a better deal.

Here's the thing, though. Illegal price fixing also applies for artificially LOWERED prices, so that's clearly not the case.

In America monopolies are illegal if they hurt the customer.

No, they're illegal if they hurt the market. Economically efficient prices are the goal, not universally lower prices.

Re:LMAO (0)

Anonymous Coward | about 2 months ago | (#47471407)

Did they?

Yes.

Is there any evidence that Apple cared about the price?

Yes, in fact you even stated it 2 sentences later: "Apple offered the publishers the ability to set their own prices in exchange for being guaranteed the best price". If they didn't care about the price they wouldn't demand the best price. And why should they get a monopoly on getting the best price?

Apple offered the publishers the ability to set their own prices in exchange for being guaranteed the best price because they weren't willing to enter the market at a loss.

Publishers can already set their own price and are paid that price, if somebody is willing to take a loss on selling it that is not the publisher's choice.

Re:LMAO (0)

Anonymous Coward | about 2 months ago | (#47472473)

If they didn't care about the price they wouldn't demand the best price

A requirement that they get the lowest price contradicts the suggestion that they wanted to raise prices.

Publishers can already set their own price and are paid that price, if somebody is willing to take a loss on selling it that is not the publisher's choice.

And they still can. Nothing in Apple's agreement required that other retailers had to sell at a profit. Even you consider the indirect incentive that Apple's agreement allowed them to price-match other authorized resellers (which then prompted the publishers, without Apple's involvement, to take steps to prevent that), then the easy fix is a tweak to the Apple agreement that says the price match is on the post-commission value rather than the consumer-facing retail price. Problem solved!

Re:LMAO (0)

Anonymous Coward | about 2 months ago | (#47474765)

How about when jobs said this “‘The customer pays a little more, but that’s what you want anyway.’”

Or is that still not enough to suggest they wanted to raise prices?

Also, a requirement that they get the lowest price (at the expense of others) is good for sales, or would you argue it is not?

Hachette? (2)

rsborg (111459) | about 2 months ago | (#47470479)

Yeah, much better to let Amazon to run all the book publishers out of business. :rolleyes:

Yes, the DOJ should totally prosecute the theoretical future anti-trust actions by Amazon, while ignoring the actual increase in prices brought about by market manipulation of Apple. :rolleyes.

The future is here: http://www.slate.com/articles/... [slate.com]

Re:Hachette? (1)

Anonymous Coward | about 2 months ago | (#47470745)

Right? So what side are you on again? Amazon is selling books at 'full list price'...hmm, seems to me that Hatchet/publishers have an option, reduce the 'full list price' of the books Amazon is selling. Presumably it's within Amazon's contract rights to sell books up to the price (but no higher) that the publisher tells others they have to charge, why should Amazon charge less than that? Why does Amazon have to take 'pre-orders'? Why does Amazon have to promote a book at all? The only thing that struck me as wrong was 'delayed shipments', now that's just not right, if I order something & pay for a given delivery time frame that's between me & Amazon not the publishers or authors.

Re:Hachette? (1)

jecblackpepper (1160029) | about 2 months ago | (#47473429)

Hatchet's contract with Amazon expired in March. Amazon tried to open negotiations with Hatchet in January for a renewal, but Hatchet declined to respond. Hatchet have continued to drag their feet on a new contract ever since. I understand that some of the issues with delayed shipments is because there is no contract and Amazon do not therefore stock Hatchet books until there is an order and so they have to rely on their supply chain to supply the title - i.e. Hatchet and wholesalers. This also explains why they don't discount or offer pre-orders, they have decided to only source the books when there is an order and they know they can fulfil it from their own suppliers.

Re:LMAO (3, Informative)

Anubis IV (1279820) | about 2 months ago | (#47470811)

Setting aside Apple for the moment, there's nothing "theoretical" about Amazon engaging in actions of this sort. They've been doing it as long as Apple has, at least.

Using most favored nation clauses and the agency model, which is exactly what got Apple in trouble: http://www.selfpublishingrevie... [selfpublishingreview.com]
Leveraging their near-monopsony to try and gouge the publishers: http://www.teleread.com/ebooks... [teleread.com]
Making hard-to-implement immediate demands when the publishers pushed back: http://www.thepassivevoice.com... [thepassivevoice.com]
Delisting multiple publishers during re-negotiations: http://time.com/110412/amazon-... [time.com]
Jacking shipping times from a few days to 3-5 weeks: http://www.washingtonpost.com/... [washingtonpost.com]
The author's guild is outright accusing Amazon of violating the Sherman Antitrust Act: http://bits.blogs.nytimes.com/... [nytimes.com]

Spend 30 seconds Googling around. You'll be shocked at what all Amazon has already done when it comes to this industry, and it's only been getting worse in recent years. It's like looking inside the door at a sausage factory: you'd have wished you never looked.

Re:LMAO (4, Insightful)

whoever57 (658626) | about 2 months ago | (#47471371)

With the exception of the smashwords issue, all of those articles relate to Amazon fighting with publishers. Not one of those articles alleges (apart from the smashwords issue) that Amazon is forcing up the prices at other retailers.What does Wallmart do every day: negotiate with suppliers to get the best deal for itself. What is Amazon doing here?

Yes, there is a risk that Amazon may be so dominant that it can push up prices, but that is mostly a theoretical risk (smashwords excepted).

So, perhaps an investigation is warranted, but, in no way does that mean the Apple should not be fined for its actions.

Re:LMAO (1)

Anubis IV (1279820) | about 2 months ago | (#47472111)

By no means was I suggesting Amazon's actions absolve Apple of anything.

That said, you're only considering the one side of the market (i.e. whether they are abusing their near-monopoly), whereas I was addressing the other side of the market (i.e. whether they are abusing their near-monopsony). Just as it's illegal for a company to abuse their dominant position to force prices up since people lack alternative choices to purchase, so too is it illegal for a company to abuse their dominant position to force down the prices they're paying when their suppliers lack alternative choice to sell to. Negotiating is fine, but when you're essentially the only company buying, you have a legal responsibility to not abuse your position in those negotiations. The danger there is that they can keep forcing prices down to levels that are unsustainable for their suppliers.

Amazon does not seem to be abusing their near-monopoly, but they are almost certainly abusing their near-monopsony.

Re:LMAO (2)

mbourgon (186257) | about 2 months ago | (#47470815)

Technically, anti-trust cases ARE usually retroactive. And if they can compete with higher prices, more power to them. But I'm willing to bet right now Hachette would much rather have competition than be bent over by Amazon. The fact that Hachette did it to themselves (via their insistence on DRM) just makes the schadenfreude pie even more delicious.

Re:LMAO (0)

Anonymous Coward | about 2 months ago | (#47470303)

Amazon knew that Apple and publishers were colluding to eliminate price wars by all agreeing to contracted prices (which is illegal and the grounds for the anti-trust) and attempted to counter this by setting "ceiling prices". Amazon knew that the budding industry needed books priced reasonably for people to invest in E-Readers and other infrastructure. In short, Amazon was looking out for the consumer, and even the industry as a whole, whereas Apple and the publishing houses were dreaming of dollar signs jumping over a fence as they slept and finding ways to screw the consumer.

Re:LMAO (1)

ArcadeMan (2766669) | about 2 months ago | (#47470453)

And this is probably the second most important post of the whole thread, which shows you the other point of view of the whole problem.

Depending on how you view it, either Amazon are the bad guys, or Apple is.

Re:LMAO (0)

Anonymous Coward | about 2 months ago | (#47470527)

Or maybe they're both bad guys looking out for themselves.

Re:LMAO (1)

ArcadeMan (2766669) | about 2 months ago | (#47470581)

That's impossible because that would mean all the flame wars and trolls are pointless.

Re:LMAO (0)

Anonymous Coward | about 2 months ago | (#47470933)

Amazon knew that the budding industry needed books priced reasonably for people to invest in E-Readers and other infrastructure.

No. Amazon knew that its Kindle arm could only be sustained on the classic Amazon margins if customers compensated by massively increased volume, and they knew they couldn't make it work if they lost control of pricing.

In short, Amazon was looking out for the consumer, and even the industry as a whole,

No, their short term interests merely aligned.

Apple and the publishing houses were dreaming of dollar signs

Apple didn't give a crap what the price was as long as it didn't pay more than anyone else. They multiplied the wholesale price by 1.42 and called it a day. 99 cents, $5, or $9.99, didn't matter.

The publishers saw the opportunity to raise the prices on some books, and Amazon chose not to go into the red to keep sales prices where they were. That's how the normal retail relationship works, only it's been distorted by megacorporations' unequal leverage.

Re:LMAO (1)

david_thornley (598059) | about 2 months ago | (#47478201)

When I got into a discussion including an author, I realized something.

There are no good guys in these disputes. The publishers do their best to rip off the authors. Amazon is trying to beat the publishers into submission so it can control the eBook industry. Apple et al. tried to set themselves up to not have to compete and thereby make lots of money.

Now, I do sympathize with the authors. They aren't in this fight. I don't sympathize with publishers, Amazon, or Apple on this.

Cost of doing business (4, Insightful)

dirk (87083) | about 2 months ago | (#47470131)

The thing I haven't seen addressed (and probably never will) is exactly how much money Apple was able to make from this. My guess is that they benefited far more than 450 million dollars from this. So if that is the case, why would they not do the same thing again since they came out ahead in the long run? You can't make the penalty less than what the company made by breaking the law, as it just becomes a cost of doing business at that point. If they don't get caught they make a boatload of money and if they do get caught they just make less money (but still make money).

Opportunity cost (4, Insightful)

KamikazeSquid (3611985) | about 2 months ago | (#47470199)

You don't have to eliminate all possibility of profit for the fines to be an effective disincentive ... you just have to reduce profit to the point where engaging in different kinds of business or modifying business practices becomes more profitable than the alternative.

Re:Opportunity cost (0)

Anonymous Coward | about 2 months ago | (#47472453)

That is blatantly wrong, you need to ensure that the behaviour has a negative impact on profit, the impact should be far in excess what they could even have profited had they done the right thing, if you are allowed to even get away with breaking even then it introduces the possibility of using it as a business tactic against competitors. "Hey lets do this, it won't be as profitable but we will drive competitors X, Y and Z bankrupt then later we can come back in with normal business". Such tactics need to cost them significant penalties,

Re:Cost of doing business (0)

Anonymous Coward | about 2 months ago | (#47470301)

You think Apple benefited far more than $450 MILLION on ebook sales?

Really?

I cannot imagine that ebook sales are a significant revenue stream for Apple and I would imagine that $450 MILLION drastically eats into any revenue they made from their sales. I do not think they benefited far more than that, not by a long shot.

Re:Cost of doing business (1)

bloodhawk (813939) | about 2 months ago | (#47472459)

They went from being a non existent player to being in dominant position going forward. They used the tactics to gain a massive foothold and now even with correct pricing they will still be benefiting from these tactics for many many years to come due to the marketshare they obtained. They will certainly have benefited exponentially more than 450 million in the long term from both hardware and ebook sales.

Re:Cost of doing business (1)

Anonymous Coward | about 2 months ago | (#47470457)

Your assumption is that Apple purposely "broke the law" in order to earn a defined profit. If you look objectively at what they did you could reasonably conclude they were just trying to enter a new market and take on a formidable competitor (Amazon) in a meaningful way. Maybe they did technically break a law (the judges think so) - but what they did was certainly not price fixing in the traditional sense. They happened to be negotiation a bunch of contracts regarding pricing at the same time because it was a NEW service and Apple likes to launch a polished product. Nearly all businesses negotiate these sort of pricing arrangements - they are not illegal.

None of these contracts *alone* would have been an issue. The issue was that Apple negotiated them at the same time. In other words, if Apple had spent a number of years "building" an e-book service then there would have been little problem but because they wanted to launch with a large catalog of e-books they were "conspiring" regarding pricing. Amazon has similar or worse pricing practices regarding merchants - why do they not have the same lawsuit pending against them? Simple - they did not negotiate the pricing all at one time. All this sort of policy does is protects big, incumbent, businesses by making it take years to begin competing with them because you MUST stagger your pricing contracts or otherwise it is price fixing. What a load of crap.

Re:Cost of doing business (1)

0123456 (636235) | about 2 months ago | (#47470501)

Dude, you might want to actually learn something about the case.

Re:Cost of doing business (2)

Anubis IV (1279820) | about 2 months ago | (#47470633)

He's partially correct. A large part of the issue was that they were accused of colluding in this regard. Another part, however, was that they combined Most Favored Nation clauses and the Agency Model for doing business. Neither of those latter two are considered illegal, in and of themselves, but together with the each other and the collusion that was alleged (e.g. there's a story about the execs from the publishers and Apple all getting together at a boathouse to talk), they were considered a form of price fixing. Effectively, the case made against them alleged that the publishers were being told, "You all get to control your own prices. All we demand is that you make sure we have the lowest price, or else that you jack up other's prices to match ours. Oh, and *nudge nudge* you're all making these decisions at the same time as each other."

Negotiating en masse isn't illegal, nor are MFN clauses or an agency model. But combining them all together, particularly if you suggest to the folks on the other side of the table that they work together for their mutual benefit? You run into some issues doing that.

Re:Cost of doing business (0)

Anonymous Coward | about 2 months ago | (#47470515)

Nearly all of Apple's profits come from hardware sales (primarily iPhone and iPad) and to a lesser extent iTunes music. eBook sales are a tiny fraction of Apple's overall business and likely generate little revenue, let alone profits.
Most of the anti-Apple comments here on slashdot reveal a clueless bias against the company.

Re:Cost of doing business (0)

Anonymous Coward | about 2 months ago | (#47472479)

your lack of knowledge of business reveals your clueless blinkered bias. not all the profits apple makes from ebooks will be direct. They will have had increased hardware sales for readers as well as associated devices, they will have also seen corresponding increases in app sale revenue as well as iTunes et al. Many companies have divisions that make no profit or even a loss but are essential money earners by how they help the adoption of their tech for other divisions. To not understand such a basic concept suggests you really should not be calling anyone else out.

Re:Cost of doing business (3, Insightful)

Anubis IV (1279820) | about 2 months ago | (#47470569)

My guess is that they benefited far more than 450 million dollars from this.

The entire eBooks market was only making $3 billion in revenue [digitalbookworld.com] in each of 2012 and 2013. And I think we'll all agree that the market of today is much larger than it was back in 2010, when Apple and the iPad entered the scene with their combination of an Agency Model and Most Favored Nation clauses, which were deemed to be anticompetitive when used together.

  Apple's share of the market in 2010 was somewhere between 10% and 20% [the-digital-reader.com] , depending on who you believe (most suggest it was 10%, but let's go with 20% for the sake of argument, since it'd mean they'd have made more money). So, if we use 2012's numbers (which, again, will be larger than 2010's actual numbers), their revenue would have only been $600 million at most during that time. I'll admit that I am not an accountant, so I may be misusing these numbers, but as I understand it, their 30% cut for the agency model would be taken out of the $600 million, meaning they'd receive roughly $180 million in a year.

To say the least, you'd have a hard time making the case that the $180 million they made was somehow $450 million or more greater than the amount they'd have made had they not engaged in anticompetitive practices. Though, if I recall correctly, treble damages were being pursued, so that may explain a large chunk of the discrepancy. Even so, it is highly doubtful Apple benefitted by anywhere even in the ballpark of the amount they are being fined.

Re:Cost of doing business (0)

Anonymous Coward | about 2 months ago | (#47472637)

that first year allowed them to establish a marketshare through anticompetitive tactics, subsequent years and even now they are still profiting from the marketshare obtained through these tactics, So while you have taken the profits from a single year, you need to also add in the subsequent income for both ebooks, hardware sales and other revenue that was generated then and is STILL being generated now by obtaining those customers, What the actual number is I have no idea, but it will be in the billions with only a small portion of that being direct revenue during the offending period.

Re:Cost of doing business (2)

TheRaven64 (641858) | about 2 months ago | (#47473757)

Those numbers don't tell the whole story. iBooks doesn't exist to make a profit selling books, it exists to make the iPad seem like a plausible platform for reading books. Similarly, Amazon gets a significant benefit from locking people into the Kindle ecosystem. The $180M in cash that Apple gets is nice, but it's nothing compared to having a load of people who have bought books that will only work on an Apple device.

Fine them the same as infringement cases... (2, Insightful)

Kookus (653170) | about 2 months ago | (#47470205)

So what does that come out to?
They sell something like 800 million books a year:
http://www.digitalbookworld.co... [digitalbookworld.com]

Multiple that by 9,000 per infringement:
http://blogs.wsj.com/law/2012/... [wsj.com]

A conservative estimate would have them owing:
7,200,000,000,000

Or if you don't want to count the 0's: 7.2 trillion dollars.

I think they should fork over the 7.2 trillion; that'll teach them a lesson.

Jobs' aggressiveness (4, Insightful)

Tablizer (95088) | about 2 months ago | (#47470231)

It appears that one key to Apple's rocketing "success" under Jobs was that he knew he was dying soon and burned bridges left and right in order to grab as much early-mover market-share as possible to gain leveraging power for Apple.

People couldn't blame his bad moves on Apple itself because the dude behind it would be worm-bait when it all came out such that the reputation of the company wouldn't take such a huge hit. He was a voluntary shock-absorber.

We also have the employee "poaching" situation in addition to this Ebook move. I bet more will come out someday.

One has to give Jobs credit for using every weapon at his disposal, including death. His slimebaggery was masterful chess (except maybe for ignoring doctors).

Re:Jobs' aggressiveness (0)

Anonymous Coward | about 2 months ago | (#47470753)

Wish I could give you a mod point. Every time I hear someone hold up Jobs as some kind of model to emulate, I am pretty sure they are unable to consider more than one dimension of a person or situation. Stories abound of how much pleasure he took in harming others, and how he didn't even consider his doctor smarter than himself when it came to his cancer. Many will argue that his ability to make money overrides any moral concern. But that is not the direction things are moving. With more people inhabiting the postmodern memes, and more awareness of triple bottom line, and mental developmental stages, and the brief emergence of Occupy Wall Street, my guess is there will come a day when those mentally ill executives will be luck to make it to their car in the parking lot. A lot of people will not forget how they behaved.

Re:Jobs' aggressiveness (5, Interesting)

Tablizer (95088) | about 2 months ago | (#47471373)

I read the Isaacson biography, and it was pretty clear that money was NOT Job's main motivator; it was a means to an end to him. He really wanted to build "insanely great" things and see his ideas transform the future.

He almost went broke in some cases by funneling his own money into projects. Somebody who values money wouldn't part with it that long for a gamble.

He was driven to see his concepts turn into products people wanted badly. In his mind, the future was his orchestra to conduct his way.

One can arguably compare him to great movie directors who drive those around them insane trying to put their vision on screen in careful detail. It gave us masterpieces like 'Odyssey 2001, but many of the project "minions" used up their Excedrin (or 60's equiv).

"Greed" is not quite the right word. "Obsession" is more like it. Maybe there is a word or phrase that means "obsession to the point of harming others"?

Perhaps in his mind, progress is more important than comfort, a kind of social darwinism where struggle for survival is a "necessary evil" to be a viable species. Or it may merely be narcissism, or a combo: those who don't aggressively scrape to be at the very top spot "deserve" to be stepped on: A+ or death.

Re:Jobs' aggressiveness (0)

Anonymous Coward | about 2 months ago | (#47472283)

Quick question, and answer honestly. Would you rate the biography as unbiased? Because I've rarely read a biography that was unbiased.

Remember, Jobs is the guy that was known to fire people walking down the halls of Apple headquarters because he didn't like what they looked like. Didn't matter how competent they were at their jobs, didn't matter how key they were on their projects. Performance, unimportant. He simply didn't like what they looked like.

Jobs. Egotistical, definitely. Megalomaniac, most probably. Sociopathic, more than likely, but then again, most people at his level do tend to show those sorts of signs. Christ, this is a guy who for years refused to acknowledge his daughter was his because he didn't want to pay child support. And you're going to claim he wasn't greedy.

Re:Jobs' aggressiveness (2)

Tablizer (95088) | about 2 months ago | (#47472517)

Isaacson did not paint a rosy picture of Jobs. Isaacson's indirect conclusion was that Jobs was a complex personality that a displayed wide range of traits and emotions.

As far as him allegedly firing employees because he didn't like the way they looked, perhaps Isaacson couldn't substantiate the rumor and that's why he didn't included it (IIRC). But, there are plenty of OTHER stories of him being a jerk, including parking in the handicap zone with a bogus/missing license plate. (A joker employee put up a sign in that spot saying, "Park Different".)

And his storied relationship with his daughter could be for a lot of reasons, not just money. Based on interviews with friends and family, speculation was given that Jobs felt abandoned by his genetic parents and this somehow left a deep psychological scar on him which he may have projected onto his daughter. Some suggest that this feeling of abandonment is partly what drove Jobs to "prove to the world" that he was worthy of "real parents".

He was not materially externally flashy most of the time (relative to his wealth), although he was interested in custom designing a big-ass yacht when he found out he was dying. He was quoted as saying he picked that big personal project partly to distract him from his pain and approaching death, if I remember correctly. He needed goals to keep his mind off stuff he didn't want to think about; another clue to his drive.

But yes, he was cheap at times. But being cheap is not "greedy" in the usual sense, except maybe as a symptom of greed. Some say it was a game with him to test the limits of what he could get a way with. Thus, it wasn't the money itself, but the pleasure of successfully manipulating using money. He did seem to get pleasure in toying with people, which his pranks with Woz fed in to.

From a personal level, yes, most would consider him a "big jerk". But genius is not measured in personal popularity.

Re:Jobs' aggressiveness (0)

Anonymous Coward | about 2 months ago | (#47473989)

Having read the bio, I don't even get where he would be considered "genius". He was a reasonably intelligent guy with a good design sense, a sociopathic personality and a lot of luck.

Re:Jobs' aggressiveness (1)

Tablizer (95088) | about 2 months ago | (#47475261)

I don't even get where he would be considered "genius"

He had a "nose" for what consumers wanted. He sensed in the late 70's that the future was in GUI's even though they would be tricky to implement on the desktop hardware of the time.

He started the general translucent craze with the iMac, a look that spread to irons and electric toothbrushes. The "Daisy" iMac was a true piece of industrial art.

He was involved in early Pixar, which sparked the whole 3D animation revolution with Toy Story.

The iPod found a convenient UI where others had tried before with mixed results, and the iPhone which made everything go through a touchscreen and changed the look and feel of cell-phones forever. It may seem obvious now, but that's because Jobs had a nose for what "should be" obvious but wasn't yet around.

He was the Forrest Gump of consumer technology in that he always seemed to be involved in the formation of trends.

Re:Jobs' aggressiveness (0)

Anonymous Coward | about 2 months ago | (#47473945)

Anyone who read the biography and came away still liking Jobs in the slightest bit must have read a different book than I did. Admittedly I never had a favorable view of the man, but after reading the biography I can't understand why anyone would ever want to be in the same room as him. And I would add hypocrite to your list, that's one of his defining characteristics.

Re:Jobs' aggressiveness (1)

Tablizer (95088) | about 2 months ago | (#47479253)

Beethoven would probably likewise bop me in the face if I visited him, but I'd still jump at the chance to meet him and see him work.

Re:Jobs' aggressiveness (1)

david_thornley (598059) | about 2 months ago | (#47478289)

Jobs was doing drastic things from the time he returned to Apple, including slashing the number of Mac models, introducing the iMac, the iPod, the iPhone, and the iPad. He wasn't close to dying when the iMac came out, or the iPod. I really, really doubt that he timed his dick moves so that he could posthumously take blame off Apple.

Re:Jobs' aggressiveness (1)

Tablizer (95088) | about 2 months ago | (#47479235)

I didn't say the dying angle was the entire reason for Apple's success, just a notable part of it. Most of his (known) Apple brush-ups with legal issues appear to come after he knew he was dying.

1% of Apple's annual profit??? (0)

Anonymous Coward | about 2 months ago | (#47470467)

After operating expenses, Apple profits little/nothing from ebook sales.

Break Them Up (1)

Bing Tsher E (943915) | about 2 months ago | (#47473567)

Just like people called for with Microsoft a number of years back, Apple should be broken up into a content-providing company and a hardware manufacturer. Their eBook intiatives that are being scrutinized now were a clear attempt to tie up and monopolize the ebook industry. Fair play would dictate that the people calling for Microsoft to be 'broken up' should be calling for the same for Apple.

Then maybe I could run MacOS on my Acer.

Re:Break Them Up (1)

david_thornley (598059) | about 2 months ago | (#47478251)

Fair play indicates that monopolies should be broken up, not that all companies should be broken up. Note that MacOSX is something of a loss leader for Apple's hardware. Split it off from the hardware and (a) there will be no real interest in maintaining or improving it (OSes are expensive these days), and (b) Apple computers will sell a lot less.

Re:Break Them Up (1)

Bing Tsher E (943915) | about 2 months ago | (#47494297)

If Apple split MacOSX off from the hardware, and opened it up, it would first kill off desktop Linux almost entirely, and then probably go for Microsoft in a big, big way.

It would also kill Apple's desktop hardware, but they do make some nice laptops that would survive. And if they maintained proper leadership of the MacOSX project, they could end up the head of a huge Open Source desktop market.

But Apple seems more interested in selling sugar water to kids (shiney consumer stuff) these days.

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