Two small corrections to your posts:
Apple, and other small book stores, heck even the big brick and mortar stores can't compete with or don't want to compete with someone who buys 5 billion of something and then sells them at a loss to steal customers.
Unfortunately, the government's interpretation was that it's okay to loss-lead certain items (the entire NYT bestseller's list, for instance) as long as not all books are loss-led. That's why they decided not to prosecute Amazon.
Nobody forced the publishers to do anything. They saw an opportunity to make more money and took it. Thats why they settled.
Well actually, they saw an opportunity to make
less money (they made less money initially after the agency model), and took it (to save their business from being commoditized). They did this knowingly, which is why they settled immediately when they were sued by the DoJ.
Apple didn't settle because the law (arguing the Monsanto standard) used to force the publishers to settle doesn't cover them as distributors. The US Government prosecuted anyway either because Apple colluded with them (a very difficult bar to prove) or because the current administration's cozy relationship with Amazon (witness Obama speaking at an Amazon warehouse in TN last week). In either case, the judge was very amenable to their government's interpretation.
----------
eBooks aren't "bought" in bulk. This is about eBooks. Not books. Do you understand the case? I ask because this is now the second time you're posting something that doesn't make sense.
Of course, the fact that eBooks are not bought or sold in bulk shows how a wholesale pricing model, while acceptable for physical books, is irrational for eBooks. Thus the rationality of an agency model Apple proposed. If Apple's actions appear to be rational for its own self-interest then the Monsanto standard says that they're innocent of wrongdoing in that regard. Then it comes to arguing whether the MFN clause was designed to protect Apple, or collude with the publisher. On that issue, the government's case is even weaker.
The clauses most definitely made prices go up. Again - I think you're misinformed.
Their are opposing lines of evidence on whether the short term prices of the books actually went up. Personally, I agree with you and the economists who say it did go up.
And the publishers actually made less (they stated so) most of the time with the new deal in place. They did it (most likely) for other reasons which I posted in another thread - which deals with saving the printed book market.
Really? Not a single line of evidence in the case said that they did it to save the printed book market. That's pure speculation. The evidence, including the admission of all the publishers called to the witness stands as well as Apple's competitors (Google and Barnes & Noble) was that they did it to prevent what they perceived was an Amazon monopoly and commoditization of the eBook market around $9.99 pricing for new bestselling books.
If Amazon ended up with a monopoly, the publishers felt they could be strongarmed to reduced the wholesale price of eBooks. This, by the way, is known as classic vertical monopoly. And while monopolies are legal in US law, vertical price-fixing is illegal under the Sherman Anti-trust act. Amazon never got to do this because they switched to the agency model (they didn't have to, but they were effectively forced to if they wanted to continue carrying bestsellers without having the titles windowed away from release on the Kindle), so we'll never know if the DoJ would have successfully prosecuted that. I think eventually so, but Microsoft fended off lawsuits for a decade and IBM successfully fended off a similar lawsuit for 40 years before it was dropped as no longer relevant. My thinking is as a business Amazon can see the odds were stacked in their favor of getting away with it.
----------
If Amazon could sell books at 9.99$, others could. They had an advantage in the market because they were first movers in it. Apple could have competed in that model, they just decided the margins were good enough and it was likely very "convenient" to find publishers who also wanted the prices to go up.
Well, they were paying wholesale for every book, so I don't know where in your math, losing $2-4 on every e-book sold, gets made up in volume. They were obviously trying to establish a monopoly, which is legal under US law (it's abuse of monopoly that is illegal). The DoJ interpreted this that as long as they didn't "dump" across the whole market (and focused on just a subset of the market: bestsellers) it's legal and didn't prosecute. If Amazon didn't donate so much to government, I'm not certain that the government wouldn't have plastered Amazon's ass to the wall. It's not really a great defensible position, and I'm sure you could subpoena some interesting records (in fact Apple lawyers showed some "interesting" e-mails from Jeff Bezos in the case with respect to just the windowing argument).
Besides, we have an example in the real world without bringing our Apple and Amazon biases into it: Barnes & Noble Nook. In their deposition
by the DoJ they claimed that they were losing money as they sold more e-books and it was killing them.
Apple decided they wouldn't compete on that model (losing money). The publishers could take-it-or-leave-it on the iPad eBookstore (leave it = let Amazon develop a Kindle app which they did). In fact, initially, one publisher decided to take the Hobson's choice.
----------
Which then led t the demise of independent ebook sellers, who did not have their own hardware to tie their shops to.
Where was this in the case? If anything Apple's entry allowed the "independent ebook seller" to survive (whatever that means).
1) Amazon, Barnes and Noble, Apple, Google, and Kobo are in the market right now, before this it was just Amazon and Barnes and Noble and the latter was thinking about leaving the market (for the second time),
2) Independent ebook publishers get to set the price under the agency model and are thriving
3) The agency model allowed for the creation of the Kobo on terms that allow enough margins to ensure a little money goes to the independent bookstore. There is simply
no way that would have been possible under the wholesale model.
----------
This is not to say that I don't think Apple is guilty (I don't know, my thinking is they and the publishers did something wrong, but I'm not sure it's actually illegal in Apple's case), nor do I care that the DoJ is asking for the moon in terms of punishment (it's their job to do so). I'm just correcting some errors here.
