Apple Blames Book Publishers in E-Books Antitrust Lawsuit

The DOJ Charts the eBook Market Before & After Agency

http://www.the-digital-reader.com/2...gitalReader+(The+Digital+Reader)#.UZRZVbW-YZC

If you have ever doubted whether agency pricing resulted in an increase in ebook prices, I have a chart that should interest you.

The US Dept of Justice filed new docs this week in their case against Apple and its 5 co-conspirators. The filing is titled Plaintiff’s Proposed Findings of Fact and Conclusions of Law, and this 103 page PDF lays out the arguments that the DOJ plans to make should this case go to trial.

The filing includes details on how the DOJ believes the conspiracy came about, and it includes emails that the various publishers sent to each other as well as other evidence.

Mixed in with the dry legal arguments were a number of charts which were created by Richard Gilbert. He’s the Emeritus Professor of Economics at Berkeley University, and his charts show how the average price of ebooks increased when the 5 publishers adopted agency pricing.

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xsmspiffx said:

Read it again. You will get it eventually I guess. Let me try to spell it out for you...

1) Amazon wanted the wholsale model, the one that let them set the steep discounts
2) MacMillan said it would only sell at the agency model.
3) Amazon refused to carry MacMillan books.

Seems rather straightforward, not sure how you are missing it.

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I give up, Amazon refusing to sell books when Macmillan FORCED them the Agency model is Amazon threatening publishers not to carry books if the discounts where not given.

By the way, the publishers had the full price, the discount was made by Amazon against its revenues.

Seems rather straightforward, not sure how you are missing it.

Oletros said:

I give up, Amazon refusing to sell books when Macmillan FORCED them the Agency model is Amazon threatening publishers not to carry books if the discounts where not given.

By the way, the publishers had the full price, the discount was made by Amazon against its revenues.

Seems rather straightforward, not sure how you are missing it.

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False premise. MacMillan could not force Amazon to take the Agency model. There is no way for a publisher to force a retailer to sell their books. There is also no way for a retailer to force a publisher to provide their books.

Since there is no way for either party to force the other party there was no way for MacMillan to force the agency model on Amazon.

When MacMillian said that the only way they would provide their books for Amazon to resell them is for Amazon to deal use the agency model Amazon refused to sell MacMillian books. That was Amazons right to do, just as it was the right of MacMillan to want the use of the agency model.

But do understand that Amazon decided, on their own, that if they could not have the ability do discount that they would not sell MacMillian books. Amazon did exactly as stated - if they had to use the agency model then they would not sell the books. However they clued in that that would be bad for their business and adopted the agency model that the publisher wanted.

At no point did either party force the other party to do anything, simply because there is no way for either party to force the other party to buy/sell things to the other party.

xsmspiffx said:

False premise. MacMillan could not force Amazon to take the Agency model. There is no way for a publisher to force a retailer to sell their books. There is also no way for a retailer to force a publisher to provide their books.

At no point did either party force the other party to do anything, simply because there is no way for either party to force the other party to buy/sell things to the other party.

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Now it is clear that you are just joking or you just don't know a **** about what the case is and you're just writing nonsense

As I said, I give up, it is a wsate of time when the other side is just laughing at you writing things that are such out of reality.

Have a nice day and go to joke to other people

MagnusVonMagnum said:

A Trust typically requires more than one company to be involved (like a cartel; for example OPEC in the Middle East). Amazon giving discounts like a loss leader (supermarkets discount things like milk all the time to bring in customers) is not a Trust. Asian steel was dumped on the U.S. market for years and the only way to protect against it is tariffs (which most companies HATE like a foul word). You can't file anti-trust or monopoly suits against giving discounts to bring in customers. If Amazon is taking actions to knowingly prevent competition beyond simply discounting products, then there might be something to look at, but as I've been told so many times on here, you need to be controlling a market before the department of justice will even look at you. Apple has snuck by for years by claiming to be a small insignificant market share company and therefore they don't go after them when they ship OSX with Safari with no Firefox option unlike Microsoft with Internet Explorer even though it's the EXACT SAME ACTION.

The charge here as a I understand it is that the publishers colluded with Apple in order to try and force Amazon to raise their prices. That does involve a conspiracy/collusion of more than one company to set prices and therefore does potentially fall under anti-trust law. Apple can play the "the only way I could do business with these publishers is to agree to their demands" card and try to shift all the blame onto them and that appears to be exactly what they're trying to do.

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I can agree with your post in every respect, you state the situation better than I've seen anywhere. Thanks for that.

My view is that Amazon does want to gain a dominant position in the ebook market in order to later take unfair advantage both of the publishers and the consumer. That's why I rarely use Amazon, instead getting my books from Apples store.

Oletros said:

Now it is clear that you are just joking or you just don't know a **** about what the case is and you're just writing nonsense

As I said, I give up, it is a wsate of time when the other side is just laughing at you writing things that are such out of reality.

Have a nice day and go to joke to other people

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Exact same comment goes back to you.

Oletros said:

Now it is clear that you are just joking or you just don't know a **** about what the case is and you're just writing nonsense

As I said, I give up, it is a wsate of time when the other side is just laughing at you writing things that are such out of reality.

Have a nice day and go to joke to other people

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Actually, looking back at it, it seems you and I are talking about different things...

The key is when you wrote "By the way, the publishers had the full price, the discount was made by Amazon against its revenues."

You seem to be talking about the idea that Amazon amazon wanted books cheaper from the publisher. That is NOT at all what I was referring to. I was referring to the price Amazon charges their customers.

starting at 0:10

At one point Mossberg asks Steve Jobs about the price advantage ($9.99 @ Amazon vs $14.99 @ Apple’s iBooks) that Kindle owners had enjoyed for certain Amazon.com ebook offerings. Jobs tactfully corrects Mossberg.

Mossberg: “[first part is inaudible] why should she buy a book for $14.99 on your device [iPad] when she can buy one for $9.99 at Amazon [inaudible]?”
Steve Jobs: “Well, that won’t be the case.”
Mossberg: “You mean you [iBooks] won’t be $14.99 or they [Amazon] won’t be $9.99?”
Steve Jobs: “The prices will be the same.” '




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Apple and the Publishers forced Amazon to raise its price against its will

Who benefit: Publishers, EbookSellers like B&N, Apple, Sony and Amazon who are all guarantee 30% margin, physical book stores since ebooks are now more expensive.

Who got screwed: consumers because retail price competition ceased to exist. The price fixing was in.

JHankwitz said:

Sorry, but my feeble brain can't comprehend this statement. Amazon can purchase all the books they sell because they are a physical entity. How can Apple possibly purchase 'all' the books they sell when e-books are sold as a copy of an electronic file? Please explain in a way that will make sense.

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Amazon purchased bulk licenses from the publishers. Apple provided a mechanism for the publishers to sell a license directly to the consumer.

After Apple got their way, Amazon was forced into simply providing the mechanism like Apple. This allowed the publishers to set the price (not Amazon) and led to increased prices all around.

maxosx said:

Apple blames ___________

Fill in the blank with nearly anything & it would be appropriate

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Yep, it seems that take issue with just about EVERYONE.

http://news.cnet.com/8301-1023_3-57585671-93/penguin-settles-state-e-book-pricing-suits-for-$75m/

Penguin settles state e-book pricing suits for $75M
The pact also resolves class-action lawsuits filed by consumers who alleged Penguin caused them to overpay for e-books.

someone wrote this:

http://news.cnet.com/8301-13579_3-57586559-37/apple-ceo-we-rejected-doj-settlement-in-e-book-suit/


If we follow the supermarket analogy, here's how it would work under apple's/the agence model: if a can of beans is $1 at Superduperfresh, that same can must be $1 at Megafresh, at Stop-n-shop, Hog-n-slop, etc--same price everywhere. No sales allowed, unless the bean-maker says so, and then it must be the sale price the bean-maker dictates, again at all grocers. If the consumer wants those beans, he cannot shop around--he must pay bean-makers price, wherever he goes.

That's the arrangement the big 5 and Apple had--the price of a given book is the same at all retailers, and the retailers have no control over it.

Returning to how grocery stores actually work. if Superduper wants to sell the beans for a penny, to get us in the door to buy other goods, they can do so. Sure, they bought the beans from the distributer for $.50, so they're selling at a big loss, but they figure they can make it up on the other items we buy.

(that's one point that often gets lots in this conversation: Amazon was paying the publishers their asking price for their books, and selling them at a loss--the loss was Amazon's.)

And sure, under the agency model, the publisher ostensibly set the price, but it's curious how they all fell in line with the $12.99-14.99-16.99 price points, the same at all publishers, and--here's the kicker--it's a very familiar set of numbers (see itunes prices for new albums).

RE: The Amazon monopoly. Before Amazon, there was no real ebook market--they created it through their marketing strategy and their willingness to sell at a loss. Was it a monopoly? What is it when you create a market for something?

IN any case, if was a monopoly, fine, but Apple and the big 5 don't get to decide that. As with any legal issue, it goes to the courts. But Apple is casting itself as judge, jury, and e-executioner of Amazon to justify its appalling arrangement with the big 5. The arrogance astounds.

http://www.bbc.co.uk/news/business-22746776

The largest settlement was with Penguin for $75m (£49m).

Hachette, HarperCollins and Simon & Schuster created a $69m fund for refunds to consumers and Macmillan settled for $26m.

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$69mil + $26 mil + $75 mil = $170 million in restitution for ebook buyers from the 5 Big Publishers who have settled.

Possibility with more to come from Apple if Apple settle or lose the class action lawsuit

Look like this Youtube video will be used as evidence by the DOJ according to the Wall Street Journal.


starting at 0:10

EbookReader said:

At one point Mossberg asks Steve Jobs about the price advantage ($9.99 @ Amazon vs $14.99 @ Apple’s iBooks) that Kindle owners had enjoyed for certain Amazon.com ebook offerings. Jobs tactfully corrects Mossberg.

Mossberg: “[first part is inaudible] why should she buy a book for $14.99 on your device [iPad] when she can buy one for $9.99 at Amazon [inaudible]?”
Steve Jobs: “Well, that won’t be the case.”
Mossberg: “You mean you [iBooks] won’t be $14.99 or they [Amazon] won’t be $9.99?”
Steve Jobs: “The prices will be the same.” '

.

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http://online.wsj.com/article/SB10001424127887324423904578521281192646920.html?ru=MKTW&mod=MKTW

The Justice Department has cited a passage in his biography and an interview with The Wall Street Journal as proof that Apple worked with the publishers to usurp the pricing model used by Amazon.

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When asked in the Journal interview why someone would buy a book at a higher price on the iPad, Mr. Jobs said the price would eventually be the same.

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