E-Books Judge Pledges to Avoid Unnecessary Intrusion Into Apple's Business

[giantfan1224]

I get that this is an Apple fan site but I'm still shocked by the amount of people taking Apple's side here. Do you guys like paying more money for an exact identical thing that is cheaper elsewhere? That's basically what you're saying by siding with Apple here. It's clear Apple broke anti-trust laws to increase ebook prices. Prices increasing is NOT good for consumers. If Amazon can sell a book for a loss, then good for them, that means consumers save money compared to what Apple and B&N charge for them. Maybe Apple and B&N should change their business model in ebooks to reflect this trend.

You don't own a business, do you? If Amazon is selling books at a loss to corner the market, then it's only momentarily good for consumers. Because as soon as all or most of their competition is wiped out, then they can raise their prices as high as they want.

 

[Nunyabinez]

Apple violated the law according to one judge, what about when it is sent to appeals court or even possibly Supreme Court.

Antitrust law is is interpreted differently by different judges. If Judge Cote says Apple violated the law but the Appeals Court or Supremes disagree, are you going to still claim Apple is guilty like you do today?

Antitrust Law is very complex.

If Judge Cote found Apple guilty and 9 judges disagree, are you still going to claim that Apple is guilty?

I would like to respond to all the defenders of Apple, but this one should suffice. If you looked at the law (i'm not a lawyer) and what Apple did, it's fairly clear that this will stand on appeal. Apple facilitated an arrangement with a number of publisher to devise a system to raise the prices of ebooks. That my friends is anticompetitive and anti-trust.

There is a reason that all the publishers caved, because they knew they were guilty and that dragging this on would not be good for them. Apple seems to think that they can spin what they did into something other than what it was.

Since I am not a lawyer and the law is complex, it certainly is possible that higher courts will differ, but at the simplest level Apple conspired with publishers to raise prices. That is not in dispute. Whether they technically violated the law is the only issue that they are pushing. I actually hope they don't win because these laws protect us.

 

[Oletros]

In a perfect world that would be great, but one major detail that everyone is missing is that is Amazon comes out on top, then they will continue to lower the prices of Ebooks. With the prices of Ebooks very low and the fact that physical books are declining at an very fast rate. Where does the publishers and authors get their money from. The appeal of being an author or publishing company is going to greatly decline if they money to be made is on par with minimum wage.

Change Amazon for Apple, ebooks for songs and CD's and what do you get?

 

[albusseverus]

Much of this case doesn't make sense, not least of which being - How can Amazon selling everything at a loss, presumably to wipe out all competitors, then make a killing on prices once they're gone, be any good for competition?

Some have speculated, like the tea party harassment by IRS, that this is a government shake-down of Apple to get them to 'lobby' more $ than they have in the past.

The other aspect is that Apple seems to be the least co-operative corporation when it comes to handing customers' data to the government, not least by excluding Flash from iOS and by default from OS X, for that matter (read here if you don't already know what "ad-tracking" is really about).

The proximity of the security summit to this government attempt to take control of Apple's business, can't be discounted.

It's clearly a government shake-down of Apple. Keep watching, and see what unfolds. Employing Mr Flash to take over from Bob Mansfield, may be the first of many Jobs-safeguards to fall. Steve, we really miss you.

 

[tongxinshe]

If Apple has to allow Amazon to place a link to their store within the Kindle App, shouldn't Apple be allowed (if they wanted) to make an iBook Store application and have Amazon allow it on the Kindle so consumers have a choice between Amazon purchased books or Apple purchased books on their Amazon device?

If not, why should Apple be forced to allow Amazon to sell their books on Apple's platform?

The bigger problem is, the DOJ is forcing Apple to do the labor for Amazon FOR FREE.

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That would make no sense. Would you also force Apple to sell samsung and Microsoft products in their physical stores?

and with no commission.

 

[tongxinshe]

If I am in a Kindle app, it is because I want to read a Kindle book.

If Kindle books were in app purchases, then those purchases would only be available within the app. But no, the digital content stays on Amazon's servers and I can download it to any of my Kindle devices. Amazon needs to hold the transaction and the order for it to make sense. It isn't any more of an in app purchase than the shoes I ordered through my Zappo's app.

It isn't like they are even saying they have to let Amazon sell Kindle books through their Kindle app and host the transaction like they do with the regular Amazon store app. Just a link that a 2 second Google search will give you if you don't already have it. If Apple feels threatened that removing that extra step will give Amazon a competitive advantage, they should market their iBooks product better rather than make it more difficult for the consumer who is already in the app they want to use.

Also if Apple were to remove the Kindle app, I guarantee a lot of people would be pissed off. I would have never bought an iPad without the Kindle app. Why Kindle appeals to me is because it is supported on multiple platforms. If Apple wants Amazon to lose their competitive advantage, they should make it so people can move between different platforms easily. But they don't because they want you to feel locked in and trapped so you keep buying their products since you are so tied to them. If they continue offering superior products though, people won't switch or if they do, they will come back. Do you really want your customers to be of the type that is only with you because they feel like they have invested so much already and it will be wasted if they switch? I mean I guess money is money to them but I think it would be better to keep releasing products that get people excited and wanting to stick with Apple.

If Amazon want to enjoy free advertisement in their iPad app, which is served by Apple's App Store server, it should be ready to pay a one-time fee for each Kindle app download.

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Because Apple has not WRITTEN an iBooks app that runs on Android. Nor will they ever.

Amazon does not allow that. Nor does it allow a Nook app.

 

[Renzatic]

The problem with this whole case is they take several completely legal business actions and transactions and try to claim the sum of the legal parts is illegal but that is just not the case. That is where the clear ignorance of the judge and the prosecutors on operating a business create this huge mess.

Right. I'm sure the DOJ and 33 states attorneys, in their complete ignorance on what collusion looks like, decided to bring the case to court on nothing more hearsay and assumptions. It's a shame they didn't call you up to set the record straight. They could've avoided so much embarassment.

As for showing you an example of price fixing and collusion, I've given you two right in my post, and the rest don't make the situation look much better for anyone involved. At the very, very least, it does paint a very suspicious looking picture.

Edit: I should also add that even Apple's rather pricey lawyers, who I'm sure have read at least a couple more chapters of Black's Law Dictionary than you have, didn't try to plead complete innocence in the matter. Rather that price fixing is legal in a situation faced against a monopsony. This should be your point of contention for your argument, not "these lawyers know nothing".

and Baldimac? I'll reply later when I've got more time.

 

[Tigger11]

Do you guys like paying more money for an exact identical thing that is cheaper elsewhere? That's basically what you're saying by siding with Apple here.

First of all the whole idea the case is brought on is that EVERYONE had to sell books at the same rate, noone using their virtual monopoly to sell books below costs and force everyone else out of the market. Under this model they weren't cheaper elsewhere, they were all about the same price. Under the Amazon model, Amazon is selling at a loss forcing others out of business, that what those of us siding with Apple are saying.

It's clear Apple broke anti-trust laws to increase ebook prices. Prices increasing is NOT good for consumers. If Amazon can sell a book for a loss, then good for them, that means consumers save money compared to what Apple and B&N charge for them. Maybe Apple and B&N should change their business model in ebooks to reflect this trend.

Sorry but its not clear that Apple broke anti-trust act in fact dumping product, (which Amazon clearly was and now is again) is in fact breaking portions of antitrust act. You seem to think that a race to value 0 for a price is always good for a customer, its not, its also not good for the economy among other things. But think about this since you think its fine for Amazon to sell below cost (and not make money last year, or even last quarter), would you be ok with Apple selling every book for $0.99, like they use to do songs and taking the financial hit? I mean they would likely put Amazon out of Business with that plan in a year. Even with Amazons book volume, Apple still would have shown a profit every quarter for the last year, and they would literally have taken 80 or 90% of the market. Still think its a great idea? Amazon is gone, B&N is gone, no bookstores in your town, just buy books from Apple, still think book dumping is a good idea?

 

[BaldiMac]

I would like to respond to all the defenders of Apple, but this one should suffice. If you looked at the law (i'm not a lawyer) and what Apple did, it's fairly clear that this will stand on appeal. Apple facilitated an arrangement with a number of publisher to devise a system to raise the prices of ebooks. That my friends is anticompetitive and anti-trust.

There is a reason that all the publishers caved, because they knew they were guilty and that dragging this on would not be good for them. Apple seems to think that they can spin what they did into something other than what it was.

Since I am not a lawyer and the law is complex, it certainly is possible that higher courts will differ, but at the simplest level Apple conspired with publishers to raise prices. That is not in dispute. Whether they technically violated the law is the only issue that they are pushing. I actually hope they don't win because these laws protect us.

At the simplest level, Apple simultaneously negotiated agency agreements with five publishers including an MFN clause. Which, according to Judge Cote, is perfectly legal. The publishers leveraged these agreements to force Amazon to switch to an agency model which resulted in higher pricing. Also legal. This is actually what's not in dispute.

What is actually in dispute is whether the publishers colluded in these negotiations. (In my opinion, it is likely that at lease some of the publishers colluded.) And then whether Apple was a part of that collusion.

Judge Cote seems to think that the simple knowledge that Apple (and everyone else) had that the publishers wanted to raise prices was enough to show that they would know that the publishers planned to leverage Apple to force a pricing change on Amazon. For me, the problem with this argument is that it doesn't actually leave a way for Apple to successfully enter the market. Because any successful strategy by Apple would have provided leverage for the publishers.

 

[Glideslope]

The sad thing is that Apple would most likely loose in the Supreme court as well. There's pretty clear evidence of illegal collusion between Apple and the Publishers. The only thing they can hope for is a more lenient form of punishment in a different court. That's my take on it anyhow.

Precisely. It's "Your take." The back room deals going on with modification after modification to rulings suggest otherwise. Denise Cote should have been removed from the case given some of her comments directed at Apple. Spend some time on Foss Patents.

Apple will have all of this dismissed on appeal. The DOJ is corrupt.

 

[tongxinshe]

It's a shame that Apple is still too blind to see that being forced out of their ****** 30% model would be good for them in the long run.

The concept has never generated any money, since nobody is stupid enough to leave the links in the app. It's just made the UI of using iOS worse, and iOS is where Apple makes their money, not the iBooks store.

Apple should be killing the whole thing of their own volition, and they're getting away with being told something they should want to do anyway for the good of their business as a punishment? They should be jumping for joy.

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No.

Apple wouldn't process anything for Amazon whatsoever.

What the DOJ is arguing is that Apple shouldn't be allowed to keep banning applications from using their own billing apparatus instead.

Which would be great news for users.

Well, Apple has to recover the service cost somehow for different type of apps they host on their App Store. 30% of the app sales, or 30% of the in-app purchase, or 30% of the advertisement income. For free Apps like Amazon that never mean to get any income in the app, Apple should simply set up a rule like "after 1,000,000 download, if a same series of apps still hold more than 10,000 downloads every month, this series of apps are subject to a minimum service fee calculated by multiplying the number of the times it is downloaded or purchased to the then current average price of all paid apps in the App Store".

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I wonder what she would do if Apple announced it would leave the ebook business because the government has made it impossible to stay? Leave the DOJ to deal with a true Amazon monopoly. What if the publishers decide to get out of the ebook business and only sell real books? It's a lot harder to copy a book than recorded music.

If I were an author I might consider demanding my work be published in physical form only. A really big name author could wreak some havoc if they did that.

DOJ will definitely hail out loudly for any of the scenario you described there, since they all fit with Amazon's interests. Especially in the second scenario, Amazon will get the chance it is desperately looking for to finally crash out the existing publisher out of business and be the final monopoly of the whole industry.

 

[Oletros]

n fact dumping product, (which Amazon clearly was and now is again) is in fact breaking portions of antitrust act.

The problem is that Amazon was not dumping ebooks according to the case

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Apple will have all of this dismissed on appeal. The DOJ is corrupt.

What do you want to bet?

 

[MacDav]

Yeah? What about it makes it a "fiasco" in your opinion? What proof do you have that Apple is being treated unfairly, besides a vague gut instinct and the fact you like your iPad a whole bunch?

The "fiasco" I'm referring to is not the Apple case, although I agree with Apple's assessment of the DOJ's proposed action. The fiasco I'm talking about is Eric Holder and his DOJ...They are a fiasco. Holder is a lightning rod for controversy, was involved in at least 3 scandals that I can think of off hand. Has been held in contempt of congress, and been asked to step down by both Democrats and Republicans. He has turned the DOJ into another arm of the Democrat/progressive party, when it should be a "Department of Justice" not a political 3 ring circus.

 

[MacDav]

Ein? The Microsoft - USA case, including the appealing happened under the Clinton presidency. Just the final settlement came in the same year that Bush was elected.

Yes, exactly. The Bush DOJ made a softball deal with Microsoft and the case went away. Under the Clinton DOJ they would have likely gone in for the kill or if they did end up making a deal it would have been far more punitive.

 

[Tigger11]

The problem is that Amazon was not dumping ebooks according to the case

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The DOJ didnt look at whether or not Amazon was dumping books, they in fact did not look at Amazon in that regard at all. Bezos has been quite clear that he was selling ebooks for less then he was paying for them, as was corroborated by a large number of publishers.
-Tig

 

[Oletros]

The DOJ didnt look at whether or not Amazon was dumping books, they in fact did not look at Amazon in that regard at all.

In fact, the DoJ looked at that and found that the ebook division was consistently profitable since day one. Really, where do you get that they didn't looked nothing?

Bezos has been quite clear that he was selling ebooks for less then he was paying for them, as was corroborated by a large number of publishers.
-Tig

Wrong, Bezos perhaps has been quite clear that he was selling SOME ebooks for less than he was paying for them

 

[rjohnstone]

If Amazon want to enjoy free advertisement in their iPad app, which is served by Apple's App Store server, it should be ready to pay a one-time fee for each Kindle app download.

Amazon already does pay to be listed in the App Store... it's covered by the annual developer fee.
Same fee everyone else pays to get listed in the store.
Beyond that, Apple does nothing else for Amazon.
Amazon's own servers serve up any content in their app... Apple doesn't host any of it and none of it is routed through any of Apples infrastructure.

 

[BaldiMac]

Amazon already does pay to be listed in the App Store... it's covered by the annual developer fee.
Same fee everyone else pays to get listed in the store.
Beyond that, Apple does nothing else for Amazon.
Amazon's own servers serve up any content in their app... Apple doesn't host any of it and none of it is routed through any of Apples infrastructure.

You conveniently left out part of the agreement. The developer fee covers being listed in the App Store subject to certain terms. You don't want to follow the terms, no listing for you.

 

[tongxinshe]

Amazon already does pay to be listed in the App Store... it's covered by the annual developer fee.
Same fee everyone else pays to get listed in the store.
Beyond that, Apple does nothing else for Amazon.
Amazon's own servers serve up any content in their app... Apple doesn't host any of it and none of it is routed through any of Apples infrastructure.

Apple handles the download, installation, bookkeeping, re-downloading, update, etc. of the app.

The developer fee is for the technical documentation and the technical help. The tiny developers also pay for it, and you think it's fair for Amazon to pay at the same level as the tiny developers but get so much more benefits than them?

 

[Oletros]

Apple handles the download, installation, bookkeeping, re-downloading, update, etc. of the app.

The developer fee is for the technical documentation and the technical help. The tiny developers also pay for it, and you think it's fair for Amazon to pay at the same level as the tiny developers but get so much more benefits than them?

Apple's problem, if they can't afford storing and downloading the app they have to put a fee for it but they don't handle the download, installation, bookkeping, re downloading, update, etc of the ebooks/videos/etc.

 

[TheZeitgeist]

I can buy books for Kindle app all day on an iPad now. Having a store link in the Kindle iPad app is frankly no big deal, and Apple being 'forced' to have a link is likewise. But 3rd party monitoring? $500 million dollar fine? That is completely stupid relative to whatever 'crime' was going on.

Its also worth pointing out publishers have a right to take their catalogs and wheel-and-deal with any distributor platform they wish - look at HDCD vs. Blu-ray for a good example of that. And Amazon is more than selling publisher's books, they want to kill off publishers and replace them. Apple's iBooks app is the only thing that forced Amazon into a 30/70 program with emerging authors. You should see their other 'options.' Amazon essentially wants to enjoy a physical publisher's gatekeeper function and hoarding of profits - yet not take any of the capital risk making thousands or millions of books; they just host a file on their server.

As a functioning business Amazon executes well, their services work. As a guy who bought I Nook reader and Amazon Paperwhite, I can tell you B&N tablets suck. But as an ethical entity Amazon is worse than Wal-Mart, they should be getting thrown under a legal bus far more than Apple deserves to, irrespective of 'crimes' committed here.

 

[Tigger11]

In fact, the DoJ looked at that and found that the ebook division was consistently profitable since day one. Really, where do you get that they didn't looked nothing?

Love for you to show where anyone says that. Amazon didnt make a profit for the first 9 years of business, and didnt make a profit in 2012 or last quarter and self predicted not to make a profit this quarter, but you believe that DOJ looked into the ebook division and found that it made money every single quarter since they started selling Ebooks.

Wrong, Bezos perhaps has been quite clear that he was selling SOME ebooks for less than he was paying for them

Not wrong, you just said the same thing I did, how can I be wrong when you are agreeing with me.

 

[Oletros]

Love for you to show where anyone says that. Amazon didnt make a profit for the first 9 years of business, and didnt make a profit in 2012 or last quarter and self predicted not to make a profit this quarter, but you believe that DOJ looked into the ebook division and found that it made money every single quarter since they started selling Ebooks.

Ah, because if the whole company has loses, each and everyone of the divisions has loses.

Do you have anything to say that the ebook division is not profitable?

Not wrong, you just said the same thing I did, how can I be wrong when you are agreeing with me.

No, it is not the same,

 

[BaldiMac]

Ah, because if the whole company has loses, each and everyone of the divisions has loses.

Do you have anything to say that the ebook division is not profitable?

Again, not everyone agrees with you or the DOJ on that standard. The DOJ just made it up on the fly without precedent. Profitability isn't a consideration in predatory pricing.

See this brief for cites on this topic starting on page 16.
http://www.scribd.com/fullscreen/102755617?access_key=key-2bc3sf7fpldurgmqu1q9&allow_share=true

(It also argues against classifying Amazon's pricing as promotional or loss leaders.)

 

[Tigger11]

Ah, because if the whole company has loses, each and everyone of the divisions has loses.

Do you have anything to say that the ebook division is not profitable?

You are the one that said, that the DOJ looked into the ebook division and that they have always been profitable. You are one with the burden of proof, acting like everyone on this entire message board doesn't realize that some divisions can make money in a company can make money on a losing business, does not take away YOUR RESPONSIBILITY to show the DOJ looked into Amazon's Ebook division and found they have always been profitable AS YOU CLAIMED.

No, it is not the same,

Yes it is the same I said that Bezos has said he sells ebooks below cost, you came back and said I was wrong he only sells some ebooks below cost, I realize this may be a language issue for you, but I never claimed nor believed that every single ebook is sold below cost. I said Bezos admitted to selling ebooks for less then what he was buying them, thats a true statement, period.