Tell Samsung. They're still whining about being caught stealing Apples IP. What's good for the goose.........
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Apple Asks U.S. Supreme Court to Overturn Guilty Verdict in E-Books Antitrust Case
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That's not correct. Apple was found to have "conspired" to set prices; there was no actual "price fixing deal." The judgment asserted that Apple was a go-between or catalyst that allowed the publishers to communicate and thus collude.
What happened with Hachette, then?
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Don't forget that monopolist Amazon is the ones who ASKED the DoJ to go after their competitor Apple!
Kindle software and typography is SO bad that we really need competition.
Kindle software and typography is SO bad that we really need competition.
Publishers became dependent on Amazon when the forced all the local and most national book stores out of business with predatory pricing of titles below cost. When ebooks came along they pressured publishers to allow them to do the same even though they were competing against the publishers' own sites at below cost. The threat of not carrying the physical book in the only viable store left outside of Barnes and Noble who would be dead too if they hadn't sign deal with all the universities to supply text books and ebooks to students. They saw no way but to sell their souls to the devil again with ebooks. This time they didn't need to run stores out of business just use their pricing as a barrier to entry. They had over 90% of a stagnate market when Apple entered. Along with them a flood of other e-stores that expanded the market exponentially. With this ruling Amazon has been allowed to crush the new players and force them back out. Oddly enough that includes publisher and author direct sites because Amazon devalues their product.
That has been the prevailing theory on MR. Feel free to correct me if I am wrong, but wasn't the truth closer to this:
- Publisher's wanted to set the price of books b/c they felt Amazon devalued some of their products by selling them at $9.99. "Some of" is key here. The vast majority of the books were not sold below cost.
- Publisher's were paid their full price for the books ($12 I think). They weren't losing money.
- Contracts with Amazon now allow the publishers to set their price if they choose to do so. Amazon's preferred pricing on best sellers is still $9.99. If publisher chooses to price higher, right below that price there's a notification that says "Price set by publisher"
- Contract also provides incentive for publishers to keep pricing lower: Amazon gives publisher better pricing and publisher gives Amazon cooperative funding to market their books.
- I'm borrowing this from an older quote: "When has it ever been said publishers don't make enough money? The smaller independent houses may have an argument but the larger houses not so much. It was these larger houses that dealt with Apple. In the last complete year,2013, the top 5 publishers had revenues of $9 billion and profits of $1 billion. From a low point in 2009, when the economy was worse, their profit margin ran from 8.1% to 9.7%, 9.6%, 10.8%, and finally 10.9% in 2013. In case you're wondering, their profit margins land them right around the mid point of companies in the media category." I know you didn't claim poverty for publishers, but this goes to them being screwed.
Hachette settled with Amazon. They got to set their price. If kept lower, they got better pricing from Amazon. Hatchette in turn agreed to provide cooperative funding for Amazon to market their books.
You aren't breaking any laws by lowering prices but price-fixing is most definitely illegal and rightly so.
If you have a product that is being sold below your cost by a partner, they are limiting your market as well as undercutting your ability to get what your product it worth, that is normally considered dumping and is illegal. Somehow people think they are entitled to something for nothing. In a free market, using venture capital to crush competitors by pricing items below cost is unfair competition. You felt an adjustment because the owners of the IP of the books you love to read knew that if Amazon is the only player then the market would be limited to people who want to buy from Amazon, so the leveled the playing field. People like me who would just not buy it if that is my only choice would be excluded and they loose billions. Keep in mind Amazon is not even making a profit after all these years. If the market and venture capital providers come to their senses and realize that it's all smoke a mirrors while they try to find a viable strategy, they are toast. With them the physical and ebook market will die too. It's only a matter of time.
yes, this is right.
but as described by another user, this is just a small piece of it.
the predatory pricing wasn't to drive publishers out of business, it was an attempt to drive other retail sellers of ebooks, and old fashioned brick and morter stores out of business, making amazon the primary point of sale for all book related industries. When Amazon sold a book at deep discount, they still paid the publisher the fully agreed upon price, so the publisher didnt lose anything.
Once they managed this though, they went back to the publishers to renegotiate terms and basically said "if you don't like our terms, good luck finding anywhere else to mass market sell your stuff on any scale"
Actually switching to the industry model that Apple tried to do with the publishers would have seen publishers revenues decrease from what they had with Amazon, but, ultimately gave them more control.
The problem isn't that the indyustry model was illegal itself, or anything wrong with it. it was that All the major players agreed with backroom discussions to do it all at once, with Apple orchestrating it to their advantage with a very Rich contract for Apple (all the parties involved agreed to give Apple the lowest prices no matter what contracts were offered to anyone else).
I agree. It was a small piece. Respectfully, it was the only piece I was responding to from the original poster who said Amazon screwed the publishers. As you stated, they wanted more control. They were willing to take less money for more control with Apple. That's not exactly Amazon screwing the publishers. That's the publishers making a decision that they felt would benefit them more in the long run. Had Apple negotiated separately with each publisher, this would be a non issue. In my opinion of course.
You're forgetting the other part of what Amazon did. If a publisher didn't play ball with Amazon (I.E. let them do what they wanted to do), the publisher's books disappeared from the site. Not just the eBooks, the physical books too. So if Apple negotiated separately with each publisher, that separate publisher going to Amazon to say "we're going to switch to an agency model", Amazon would have said "Nope, and you can kiss goodbye those physical book sales you had - unless you want to give up this notion and come kiss our ring."
Interestingly, one of the letters from Steve Jobs said if they didn't act now, Amazon would no longer tolerate paying the wholesale price and selling far below the suggested retail price, Amazon would use its power to force companies to reduce the wholesale price. With the DoJ behind them, that's what Amazon is doing now - and not just eBooks, they're now doing it for movies too.
Actually, publishers couldn't sell for less elsewhere but could sell for the same or more. Big distinction.
whats the distinction?
I said, (all the parties involved agreed to give Apple the lowest prices no matter what contracts were offered to anyone else)
which means that the publishers could negotiate higher or same elsewhere, but that Apple must always get the lowest available price. So if Publisher signed elswhere for 10% less than the current APple price, Apple's contract would then lower their price to the same.
I think we're just saying the same thing in two diffrent ways
I reckon they should be made to pay with their Canary Island money so the Govt can charge them tax on it as well.
The way I remember the events of that time ... it was a case of the price was LOWER on Amazon. Apple got the publishers to agree to sticking to a higher product price, and not do discounting.
So this explains why the ebooks were more expensive in many cases than the paperback?
um... pretty sure you could ask regardless. You could represent yourself. You could hire any number of local lawyers. There is this thing called "the rule of law" that we as a society tend to try for.
There is also a difference between "getting charged" and "getting convicted." Getting charged means you have a right to make them prove their case to whatever standard applies. Getting convicted means they succeeded, according to the particular court. Then you have a right to appeal to a higher court.
Kinda the way it is supposed to work.
Yeah, so that publishers, editors, illustrators, marketers who make you know about the book in order to want it, can get paid.
If you buy a paperback, the physical cost of that paperback is pennies. Maybe a dime or two, if it's a big one. Even with the paperback, you aren't paying for the physical good, you're paying for the creation of the words on the pages.
If it's a book that has sold several hundred thousand hardbacks, and a large number of paperbacks, yeah, the creation costs are paid for. But Amazon wasn't just doing this to old books that had been around for a long time, they were doing that to first publish books.
in many cases.
Prior to the Apple deal: the retailer, IE AMazon / B&N were free to set whatever price they wished on ebooks to the retail channel. Regardless of price they charged at retail, Publishers still got their contracted price.
Amazon would frequently sell certain books at deep deep discounts to get you to their store, where they expected you to continue to buy more things but at their expected retail price.
Apple didn't like this. They wanted fixed prices that they could compete against to retain their 30% profit. They looked to change the model the publishing industry had been working on previously to the "fixed price" and they worked together with the 5 biggest book publishers to change to a model where the publishers determined retail price. (which just so happened to be the 9.99 price point Apple wanted).
Once all 5 publishers agreed to change to this model, they told amazon and other retailers if they wanted content to sell, they'd too also have to switch to this model, and that the publishers would determine book prices, which, at 9.99 often were higher than paperbacks or the previously deep discounts amazon used to offer.
WHile that happened, Apple worked out a deal with the 5 publishers which stated that Apple had to have the lowest cost deal from the publisher. the publishers were free to negotiate with other companies supplier deals, but, they could match, but not be lower than the one apple has.
With chains of emails, conversations and meetings with Apple beteween these executives, the courts deemed that Apple basically orchestrated the shift in the publishers deal, and by them all working together like this, while they're supposed to be competitiors, they were in fact, in violation of collusion, which in most countries is illegal as it's deemed to unbalance the market.
I'm pretty sure the publishers are guilty, but I was never really convinced Apple did anything wrong here. Certainly breaking Amazon's monopoly should have been a good thing, even if it involved some sketchiness with the publishers talking with each other and Apple being the beneficiary. The end result of this antitrust case was actually to prop up Amazon's monopoly and hurt a new company trying to enter the market. Even if Apple broke the letter of the law, somehow, the ruling goes against the spirit of the law. The whole idea of antitrust legislation is to prevent the situation we have with Amazon.
I hope it gets overturned on appeal, and not because I'm a fan of Apple, but because I'm a professional writer and know firsthand how awful Amazon has been to the industry. Everyone focuses on the price for the consumer, but what really happened is that Amazon devalued the product and drove all competition out of the market. As soon as somebody new tried to compete, Amazon used the courts to crush them.
I hope it gets overturned on appeal, and not because I'm a fan of Apple, but because I'm a professional writer and know firsthand how awful Amazon has been to the industry. Everyone focuses on the price for the consumer, but what really happened is that Amazon devalued the product and drove all competition out of the market. As soon as somebody new tried to compete, Amazon used the courts to crush them.
But the answer to breaking one monopolistic company is not to give that monopoly to another competitor.
that is the nature of why Apple loved the industry model where the price was set by the publishers.
If Amazon had to sell their books at 9.99 only, And same with Apple, B&N, Nook, kobo and everyone else. Price is no longer a competing factor with who gets your business.
Unlike normal books, E-books require some form of electronic device to read. when the ebook scandal broke e-readers weren't as widely adopted, but the iPad was the single most sold tablet in the world by far greater magnititudes than it is today. SO once you remove price as a factor for competition, most people, assumingly would purchase their books directly on their tablets, direct from Apple instead, giving a semi-monoply of the digital ebook space to Apple instead.
Publishers went along with this out of spite against amazon, and while Amazon needs to be smacked upside the head, Apple doesn't have a better track record from a corporate side on how they handle markets. SO Apple gets a near monopoly out of it, 30% cut on all ebooks sold, breaks Amazon's hold on ebooks while also getting the best deal from the publishers for costs.
This was a well Orchestrated attempt by Apple to change an existing marketplace, not by disrupting it with tech, but to go after the business model. Apple never operates in slim margin industries. Books are a slim market industry. So instead of trying to compete, they attempted to use collusion to change the industry.
And there case wasn't helped very much by Steve Job's own comments. (I'm having a hard time finding the video, which seems to have been scrubbed), but in a post iPad interview he opened p candidly.
"publishers are actually withholding books from Amazon because they're not happy," and that "the prices will be the same"
The problem is that Amazon's stranglehold on the book publishers is that it couldn't be disrupted with tech, because unless the world went overnight from physical to eBooks, Amazon's threat (carried out in the past) of "no more physical book sales" makes it impossible for them to go anywhere else. It wouldn't matter if iBooks and iPads would be the most incredible book reading experience either, Amazon's market power in another market (physical books) could make it fail. And that's CLEARLY a big no-no in the anti-trust laws.
And it worked. Yes, Apple was able to get into the market. So could Barnes and Noble, who actually got MORE from the new system than Apple. So could other people. Until the DoJ blessed Amazon's abuse of its market power, then Amazon again became the overwhelming power in eBooks like it is in physical books (shared with WalMart), and Barnes and Noble could no longer compete because its shareholders actually expect profits from the stuff it sells.
If the DoJ had slapped them both down, slapped Apple for its behavior as well as telling Amazon that it can't abuse it's market power, I'd have no problem. Ignoring Amazon's abuses makes one wonder if there's a reason for the bias.
it's still a logical fallacy though. you know the old sayings, two wrongs don't make a right.
it's a tu Quoque. Avoiding criticism of Apple's practice by saying "you too" to Amazon.
IMHO: yes. Apple did wrong. YES Amazon has done wrong. But bother are independant of eachother and both should be punished. But Apple shouldn't get off for doing X, just because Amazon got off for doing Y.
in one case, sure, justice wasn't served and demand from your government better. Not drop their standards just to support a company. These companies don't need our support. People, Us, consumers do. We need to be protected from any company like this behaving in these ways.
OK, what could Apple and the publishers have done to stop Amazon other than what they did? How to break Amazon's power to destroy the profit in making books? And more importantly, let the publishers decide things like what they'll charge (which is what producers usually do get to decide)