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Apple Blames Book Publishers in E-Books Antitrust Lawsuit
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Actually Amazon was using its market dominance to force publishers to cut prices and in some cases virtually give books away, they were most certainly not getting the price they were asking for. This was hurting publishers and they were anxious to break the strangle hold Amazon was gaining over the industry. Apple was a good bet for them to make this happen. While I would agree that some of Apple's tactics are wrong in this case the publishers were as much to blame as Apple.
Amazon ebook division was profitable since day one, there wasn't predatory pricing
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So this is why books cost the same on Apple's site as they do on Google Play? I looked up numerous books on both sites and they were the same identical price.
Identical!
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Your failing to realize that Amazon buys the books they sell, Apple does not. The publishers get paid what ever they decide to charge Amazon for the cost of the books at wholesale. Apple is creating a marketplace in which publishers are selling directly to the consumer for a fee of 30% the cost and under the stipulation they can sell it no cheaper than what they sell it through Apple for. There is your AntiTrust suit.
I remember when Apple announced its plans to set a cap on textbook prices at $14.99. It was one of the most exciting breakthroughs in years, because publishers have kept the price of textbooks artificially high. Many now are over $100, and students simply can't afford them. So yes, Apple colluded with textbook publishers to keep the price of textbooks on the iBook Store low so that students could finally afford them. That would have had a huge benefit in education. But I guess now we can say goodbye to that possibility.
I think the agency model is the right model for everything: you own the good, and you sell it directly to customers, with the "retailer" that acts just as a distributor, and gets a fee for that. Apple doesn't decide prices, and doesn't care if publishers sell the ebooks at 10$, 1$ or 100$; it treats ebooks just like apps in the app store, the only difference is that there was no wholesale predator for mobile apps, like Amazon for ebooks: the fact that Amazon used to make profit on its wholesale discounts doesn't matter, because publishers had to accept Amazon prices when Amazon was the only real outlet for selling ebooks. I followed this antitrust lawsuit since its very beginning, and I still don't understand what Apple did that's so illegal and unethical, maybe someone could enlighten me.
Not sure why everyone gets upset when a story related to lawsuits gets posted. I'm sure the guy who posts these stories would rather there were more interesting things to post but unfortunately Apple and the technology industry are quite boring these days. Not much he can do about it!
Apple closing the gate after the horse has bolted? Never... 
A good example of how Apples greed will mean they will never get those content deals with the studios done. Because they don't need Apple and if those rumours are true then its pretty obvious they don't like what Apple is offering.
Anyway for books Amazon rules, Apple fails, in regards to digital distribution.
A good example of how Apples greed will mean they will never get those content deals with the studios done. Because they don't need Apple and if those rumours are true then its pretty obvious they don't like what Apple is offering.
Anyway for books Amazon rules, Apple fails, in regards to digital distribution.
I think Steve may have been referring to music content, but...
The issue for me, as a consumer, is that I find myself contemplating using the Kindle and/or Nook apps on my Apple iDevice to consume content because that content is less expensive through those other avenues than the iBookstore. And in some cases the same 'book' is not available on the three sources.
I find the idea of paying 'list price' for an electronic book file incredibly wrong, when taken in the context that the amount of effort to provide that content is no where near the amount of effort it takes to print, bind, box, ship, warehouse, distribute, unbox, display, sell a physical product. I think that is what the lawsuit is about.
Not that I am a fan of Amazon's ruthless treatment of their suppliers, but come on, paying $14.99 for an ebook? When nearly everyone else prices it under $10? And the $14.99 is the printed book price! Someone is making a hell of a lot of money, and I seriously doubt that it's the writer(s) of the 'book'! I'd feel somewhat better if I knew that the writers were getting the money, and they were fighting Amazon for screwing them, but it's looking like it's both the writers AND us that are getting screwed in this case...
I'm sorry but the publisher I work for was paying 70% of the profits to Amazon and we got to keep 30%. Amazon doesn't always buy the books wholesale...and people actually buy our content because of us and not Amazon. I'm sorry but letting the publisher decide what they want to charge for their books is a perfectly legitimate concern considering they have to bear the costs of writing the book and paying the authors and marketing etc... Sure there is no paper aspect involved in ebooks but honestly the actual making of the physical paperback book costs almost nothing to reproduce ($10 at most). The end user pays for shipping and handling. So why shouldn't e-books be closer in price to normal books?
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" Apple had “told the publishers, ‘We’ll go the agency model, where you set the price, and we get our 30 percent, and yes, the customers pays a little more, but that’s what you want anyway.’ ”
IOW, a combination in restraint of trade.
It seems pretty clear-cut to me. Apple used its market power to collude with the industry heavyweights to line its pockets at the expense of consumers.
Capitalism does not work well absent competition. The Justice Department is charged with (among other things) preserving free markets and stamping out this type of anti-consumer collusion by oligopolists.
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A little more is in relation to what Amazon was charging for e-books which IMO was predatory pricing. Could you imagine Amazon selling your book cheaper than you can afford to sell your book. Eeek! I only buy from the publisher directly as a result. I don't mind paying a bit more and in return the publishers give me all kinds of early releases at cheaper prices and they automatically update me as they put it together and when the final version comes out i get that one for nothing at all.
That is one way to compete. But there are an infinite number of other methods.
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Absolutely. Without the agency model, Apple could have sold the textbooks for any price it chose, as could any other online or offline retailer.
But after Apple imposed the agency model with its most favored nations clause, price competition was eliminated.
Apple needs to be corrected. It cannot use anti-competitive methods to make higher profits.
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.
Since Apple is swearing to a Judge it is true, it has to based on a fact. Publishers hated Amazon because it demanded steep discounts on e-books by threatening to refuse to carry the publishers books if the discounts were not given. That is true anti-competitive behaviour.
If publishers were so happy with Amazon, they never would have agreed to switch to an Agency model. Further, the publishers, not Apple had the upper hand. Apple didn't have a book store, and wanted one. Publishers already had distribution channels.
The government's case is bogus, and Amazon's lobbying money is apparently well spent.
Apple uses the agency model for music and apps. It is simple and easy for people to understand. In both cases, consumers certainly benefitted from lower costs.
The most favored nation clause only applied to new titles. Moreover, Amazon was not forced to switch to an agency model. It could have elected to not carry the publishers books. Apple didn't have the power to force the publishers to enter any agreements they didn't want to enter.
Further, the most favored nations clause only applied to new titles carried by Apple and other retailors. Publishers were still free to strike deals for a retailor like Amazon to have an exclusive, which is common now. If you go to Amazon, you will find plenty of popular titles like the Hunger Games or Harry Potter that are not available on iBooks.
Switching to the Agency model helped competition. All the sudden Amazon's 90 plus share dropped to the mid seventies. Barnes and Nobles was the biggest beneficiary. iBooks also benefitted.
Amazon also used its dominance in hard cover sales to force concessions out of publishers for e-books. Tha is anti-competitive.
Classic anti-trust behavior requires competitors to collude. Even if Apple colluded with the publishers, which the evidence suggests it did not (independent negotiation), that would not be anti-competitive because Apple does not compete with publishers. It competes with retailers like Amazon. Apple didn't collude with Amazon. For instance, Samsung, LG, and Sharp all settled with the government for colluding to fix the price of displays.
Further, Apple didn't have any power over publishers. It wanted to bring the iPad to market, and have deals with publishers to carry content. It, however, hadn't sold a single iPad at the time, and Apple needed the publishers far more than the publishers needed Apple.
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Yes, if somebody accuses you of something you do not believe you are guilty of, settling is the way to go.
LOL, there's hardly a man in prison who doesn't claim he's innocent. Apple is so arrogant I'm sure they think fixing prices is perfectly ok.
Also you don't understand what "anti-trust" means. It's not collusion it's abusing market power.