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Last December, the U.S. Department of Justice acknowledged that it was conducing an antitrust investigation into the new "agency model" of e-book pricing that was championed by Apple ahead of its iBookstore rollout, a model in which publishers could set the retail prices of their books but could not sell them to retailers other than Apple for lower prices. A similar investigation has been ongoing in Europe as well.

The Wall Street Journal now reports that the Department of Justice has warned Apple and five e-book publishers that it intends to file an antitrust lawsuit against the companies over the matter, in which the companies are alleged to have colluded to raise the price of e-books.
Several of the parties have held talks to settle the antitrust case and head off a potentially damaging court battle, these people said. If successful, such a settlement could have wide-ranging repercussions for the industry, potentially leading to cheaper e-books for consumers. However, not every publisher is in settlement discussions.

The five publishers facing a potential suit are CBS Corp.'s Simon & Schuster Inc.; Lagardere SCA's Hachette Book Group; Pearson PLC's Penguin Group (USA); Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH; and HarperCollins Publishers Inc., a unit of News Corp. , which also owns The Wall Street Journal.
Many publishers were happy to sign on to Apple's agency model for book pricing, seeking to gain greater control of pricing for their content. After signing deals with Apple, they then turned to Amazon and other retailers, forcing them into the same arrangements by threatening to withhold their books from those retailers.
The Justice Department believes that Apple and the publishers acted in concert to raise prices across the industry, and is prepared to sue them for violating federal antitrust laws, the people familiar with the matter said.

The publishers have denied acting jointly to raise prices. They have told investigators that the shift to agency pricing enhanced competition in the industry by allowing more electronic booksellers to thrive.
Arguments that the agency model has actually increased competition center on Amazon's dominant position in the retail book industry, where it had frequently sold books at razor thin profits or even losses in order to attract customers for its broader shopping offerings. Under the agency model, greater price uniformity across retailers has allowed more companies to be competitive in the marketplace.

Article Link: U.S. Government Warns Apple and Publishers of Antitrust Lawsuit over e-Book Pricing
 

bondsbw

macrumors member
Sep 7, 2006
85
37
Under the agency model, greater price uniformity across retailers has allowed more companies to be competitive in the marketplace.

Yes, but isn't the point of increasing competition to reduce prices?
 

realmike15

macrumors member
Feb 1, 2010
81
0
Sounds feasible to me, I know for a fact when I check e-book vs hardcopy prices I've found e-books to be much more expensive on numerous occasions. This doesn't make sense from a printing and delivery standpoint, and makes me believe these companies are trying to take advantage of the hype and popularity behind ebooks as a new technology. I hope they come down hard on Apple and Publishers if it's true, ripping off customers should not be a business model for any company. No sympathy for greed.
 

ElCidRo

macrumors 6502
Aug 29, 2010
302
158
Sounds feasible to me, I know for a fact when I check e-book vs hardcopy prices I've found e-books to be much more expensive on numerous occasions. This doesn't make sense from a printing and delivery standpoint, and makes me believe these companies are trying to take advantage of the hype and popularity behind ebooks as a new technology. I hope they come down hard on Apple and Publishers if it's true, ripping off customers should not be a business model for any company. No sympathy for greed.

Well said. The price of ebooks is WAY WAY too high. I even think they would make more profit if they had lower prices. Like 1/2 compared to the printed editions.
 

RogueWarrior65

macrumors 6502
Jun 30, 2003
352
259
Redondo Beach, CA
Chicago-mob style tactic

IMHO, the fact that this justice dept went public with this before having an air-tight case is typical. Threaten litigation on a federal scale so the defendants will be more inclined to pay for protection *cough* *cough* I mean settle.
 

WannaGoMac

macrumors 68030
Feb 11, 2007
2,721
3,990
Finally!

Fact is it costs a great deal LESS to distribute an ebook.

Fact because of DRM and continually increasing limitations on library ebook loan programs the publishers will actually sell more books in the long run compared to paper books.

Why are none of these savings (and increased sales) not being at all passed on to the consumer? Collusion by publishers to save old profit levels and potentially make higher ones because ebooks are cheaper to distribute).

I can't believe it's taken this long to get the gov regulators involved. Let's see if they actually do anything...
 

ihateilove

macrumors newbie
Feb 8, 2011
28
0
It's funny really: You see, on the one hand I feel it is appropriate to ensure people who make cultural things -- authors, artists, musicians and so on -- are able to make a comfortable living from their works. It enables them to focus on making the art I love.

On the other hand, I'm minded to oppose collusion. In this case, I fear only Amazon really wins, as if publishers can't keep publishing then we'll lose the more esoteric works as they'll focus entirely on mass market classics.

I find it hard to make a judgement call on what's right or wrong in this on those grounds.
 

gwangung

macrumors 65816
Apr 9, 2003
1,113
91
Fact is it costs a great deal LESS to distribute an ebook.

Fact because of DRM and continually increasing limitations on library ebook loan programs the publishers will actually sell more books in the long run compared to paper books.

Why are none of these savings (and increased sales) not being at all passed on to the consumer? Collusion by publishers to save old profit levels and potentially make higher ones because ebooks are cheaper to distribute).

I can't believe it's taken this long to get the gov regulators involved. Let's see if they actually do anything...

THis is quite incorrect.

Distribution costs are the least expensive components of a book; it's a labor intensive industry, from editing to procurement to..um...writing.

THe savings from ebooks simply aren't as great as people think.
 

fifthworld

macrumors 6502
Oct 22, 2008
268
5
Fact is it costs a great deal LESS to distribute an ebook.

Fact because of DRM and continually increasing limitations on library ebook loan programs the publishers will actually sell more books in the long run compared to paper books.

Why are none of these savings (and increased sales) not being at all passed on to the consumer? Collusion by publishers to save old profit levels and potentially make higher ones because ebooks are cheaper to distribute).

I can't believe it's taken this long to get the gov regulators involved. Let's see if they actually do anything...

So what? Is Apple the only company entitled to make profits from technology advancement? Don't like the price of ebooks, don't buy them; this should be enough to let the publishers know they have to reduce prices.
 

GrayApple

macrumors member
Feb 20, 2010
48
0
This isn't good! The government should not dictate what a company charges for it's products/services. If you are dissatisfied with Apple's pricing, you should buy your e-books from Amazon! If they overcharge, use Kobo or Barnes and Noble. If they overcharge, refuse to buy e-books until the pricing goes down.
It's called the free market.
 

tbrinkma

macrumors 68000
Apr 24, 2006
1,651
93
Sounds feasible to me, I know for a fact when I check e-book vs hardcopy prices I've found e-books to be much more expensive on numerous occasions. This doesn't make sense from a printing and delivery standpoint, and makes me believe these companies are trying to take advantage of the hype and popularity behind ebooks as a new technology. I hope they come down hard on Apple and Publishers if it's true, ripping off customers should not be a business model for any company. No sympathy for greed.

It may not make sense from a printing and delivery standpoint, but it makes plenty of sense from a design and layout standpoint. If you want to sell a paper book, you don't need to provide 4 different sizes & bindings for 8 different sellers. Unfortunately, that's pretty much exactly what you need to do to sell an e-book. You need to do the layout for the Kindle, Nook, iBook, generic ePub, and Mobi formats. Maybe even RTF, HTML and others. All of these have different subsets of each others' capabilities in common. (The capabilities differences aren't a huge deal for text-only works, but the differences still make for extra time spent doing layout.)

Each different supported format means time spent by someone, creating that format, and a run through editing to make sure it didn't introduce any weirdness. The person doing layout and the editor both need to get paid, and these days the costs of layout and editing are usually *more* than the costs of printing and distribution.

----------

Fact is it costs a great deal LESS to distribute an ebook.

Fact because of DRM and continually increasing limitations on library ebook loan programs the publishers will actually sell more books in the long run compared to paper books.

Why are none of these savings (and increased sales) not being at all passed on to the consumer? Collusion by publishers to save old profit levels and potentially make higher ones because ebooks are cheaper to distribute).

I can't believe it's taken this long to get the gov regulators involved. Let's see if they actually do anything...

The first one is a 'fact' only if you ignore the costs in creating the book in the first place.

The second 'fact' is pure speculation at this point.

See above if you actually want to understand *why* e-books can (and sometimes do) cost more than their dead-tree versions.
 

Mattie Num Nums

macrumors 68030
Mar 5, 2009
2,834
0
USA
This isn't good! The government should not dictate what a company charges for it's products/services. If you are dissatisfied with Apple's pricing, you should buy your e-books from Amazon! If they overcharge, use Kobo or Barnes and Noble. If they overcharge, refuse to buy e-books until the pricing goes down.
It's called the free market.

Collusion is collusion.
 

WannaGoMac

macrumors 68030
Feb 11, 2007
2,721
3,990
THis is quite incorrect.

Distribution costs are the least expensive components of a book; it's a labor intensive industry, from editing to procurement to..um...writing.

THe savings from ebooks simply aren't as great as people think.

Please provide facts to backup your claims. Numerous, now independent, authors have listed item by item the costs you say are so much and found that they can sell books profitably at ~$3 (or less) inclusive of hiring editors, layout experts, and writing. Google it and you'll find these write ups easily.

Ok, so if you're right that it's so inexpensive to distribute, why are ebooks not the same price or at least a bit less expensive than traditional books? There have to be SOME savings with ebooks over paper books.
 

snowmoon

macrumors 6502a
Oct 6, 2005
900
119
Albany, NY
Apple agreed to sell for MSRP in return for MFN/MFC status, this is common with larger clients. This is not a lock in and I don't see how it's collusion either.

http://itlaw.wikia.com/wiki/Most_favored_nation_clause

Personally the publishers can hang, but I don't see how Apple is in violation of anti-trust. If anything Amazon has been blatantly pulling a "WalMart" on ebooks by using their dominant position to squeeze out competition.
 

Macboy Pro

macrumors 6502a
Feb 16, 2011
730
52
Yes, but isn't the point of increasing competition to reduce prices?

If you force everyone to price the same, there is no increase in competition. There is only increase in availability. There is nothing about this that is good for customers. This is ANOTHER way Apple tries to use their position in the marketplace.

I LOVE Apple products, but hate Apple's practices. The practice of not allowing competition is what is happening here.
 

aristokrat

macrumors regular
Apr 15, 2007
184
7
People who complain about the increase in prices are forgetting the fact that Amazon was selling a lot of ebooks at a loss in order to get people to but their kindles. The only way other people could have the same prices is if Amazon agreed to subsidize ebooks for all platforms.
 

5aga

macrumors 6502
Feb 18, 2003
489
201
Gig City
in all honesty ebooks cost more now because the printed versions are usually being discounted. Just a few years ago we were still paying upwards of $30 for hardcover books but its fairly common to find them in the $10-$15 range. I think the newfound popularity of ebooks is causing retailers to discount the printed versions.

it really is just a supply/demand issue.
 

aristokrat

macrumors regular
Apr 15, 2007
184
7
Please provide facts to backup your claims. Numerous, now independent, authors have listed item by item the costs you say are so much and found that they can sell books profitably at ~$3 (or less) inclusive of hiring editors, layout experts, and writing. Google it and you'll find these write ups easily.

Ok, so if you're right that it's so inexpensive to distribute, why are ebooks not the same price or at least a bit less expensive than traditional books? There have to be SOME savings with ebooks over paper books.

Advertising plays a role in increased costs.

Ebooks being sold under the agency model will have prices set by publishers to ensure a certain amount of revenue. Physical books are sold to the book store, who then can sell them for whatever price they want and frequently use popular books as loss leaders to increase traffic. Ebooks don't exist in a vacuum.
 

sha4000

macrumors regular
Feb 19, 2012
139
1
Fact is it costs a great deal LESS to distribute an ebook.

Fact because of DRM and continually increasing limitations on library ebook loan programs the publishers will actually sell more books in the long run compared to paper books.

Why are none of these savings (and increased sales) not being at all passed on to the consumer? Collusion by publishers to save old profit levels and potentially make higher ones because ebooks are cheaper to distribute).

I can't believe it's taken this long to get the gov regulators involved. Let's see if they actually do anything...

I was pretty surprised to see an ebook just a couple of dollars less than a hard copy of a college textbook that I was purchasing for my daughter:eek:
 

bocomo

macrumors 6502
Jun 29, 2007
495
0
New York
Sounds feasible to me, I know for a fact when I check e-book vs hardcopy prices I've found e-books to be much more expensive on numerous occasions. This doesn't make sense from a printing and delivery standpoint, and makes me believe these companies are trying to take advantage of the hype and popularity behind ebooks as a new technology. I hope they come down hard on Apple and Publishers if it's true, ripping off customers should not be a business model for any company. No sympathy for greed.

but it looks like what this is about is that exclusivity that Apple has set up--can't sell for cheaper anywhere else

this doesn't really address the problem of overpriced ebooks
 

silentbob007

macrumors regular
Jul 31, 2010
179
29
Little Rock, AR
This isn't good! The government should not dictate what a company charges for it's products/services. If you are dissatisfied with Apple's pricing, you should buy your e-books from Amazon! If they overcharge, use Kobo or Barnes and Noble. If they overcharge, refuse to buy e-books until the pricing goes down.
It's called the free market.

Agreed that I am not a fan of government interference, but then again ... it is also a function of the government to keep a free market. If there was collusion to force others to raise their prices, then that is a place where the government has a rightful claim for interference.
 
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