Apple Found Guilty of Conspiring to Fix Prices in E-Book Trial [Updated]

[Oletros]

So Amazon can dump books at a loss and kill all competitors, because no other competitor can afford to sell $14.99 books for $9.99. And everyone stands up and cheers for them. Wow.

If the ebook division was profitable for Amazon how can't be profitable for others?

 

[maelstromr]

The mere fact that Eddie Cue said there was no collusion is perjury by the fact that Apple lost the case.

Apple has said they will appeal the ruling. Until that time perjury has been committed by Apple's entire counsel and senior management.

If Apple loses that appeal it will (in my opinion) hurt Apple's reputation and do more harm than good.

Apple should lick their wounds and accept the ruling of the case.

It's going to be a long summer for Apple.

Dear God I hope you don't live in one of those awful states where judges are elected and you could be one some day. This is such a tremendous misunderstanding of the judicial system as to be terrifying.

 

[thelatinist]

This was so clearly a price-fixing scheme that I can't imagine how Apple thought it could win on the merits.

 

[charlituna]

And if publishers independently decided to break their agreements with Amazon and do that then fine. But it's pretty clear it was a coordinated effort and since they are the 6 largest publishers with huge marketshare, that's a clear no-no.

A number of articles are saying there was nothing presented that slam dunks this coordination was by Apple etc.

But the judge decided in advance it was, said as much before the trial and stuck to her opinion

That is a no-no also

 

[EbookReader]

guilty of price fixing? they were just fixing the prices that amazon forced on us publishers! amazon has fixed the price at below value - and thats the value that enables writers editors and publishers to make a living - not the value YOU (and AMZN) place on our work

Amazon paid the full asking price from the publishers for the best sellers.

Example: Publishers charge Amazon $12 for the best sellers.

Amazon use these best sellers as LOSS LEADERS and sell them at $9.99

Amazon lose $2.01 on each loss leader ebook sold.

And no, this is not illegal. If Apple use loss leader for ebook, would people also it is illegal?

And Amazon is profitable overall from selling ebook because Loss Leaders ebooks are just some ebooks that Amazon sell.



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In fact, if you are the author/publisher, you are better off with Amazon selling your book at a lower price (as a loss leader).

You get $12 wholesale whether Amazon sell it at $16 or $9.99

But if Amazon use your book at loss leaders at $9.99, you will sell more and earn $12 for each book.

 

[InfernoShade]

Amazon ... are basically a non-profit company. Apple exists to gouge the hell out consumers.

What are you talking about?! Non-profit. So silly. It's a for-profit company for sure. Amazon is a company like any other - it's business and they want to make money. It's all about profit. Amazon's plan from the beginning was to undercut all competition, thus drive all other competitors out of business. So they didn't make profit up front, but planned to rake it in later.

Lastly, Apple is not different than Amazon or any other company. I like both company for different reasons. But don't pretend they they aren't in it for money. Well based on philosophies, and company histories. I'd say Apple cared more about making a great product, then Amazon cared about making a great service.

And if you want to talk about no profit. Apple was going under years ago because all it did was think about making things, and not about smart business. And Steve Jobs didn't have a salary for years, and kept putting his own money into the company. Jeff Bezos didn't do that.

Again, I like both companies for different reasons.

 

[A Hebrew]

Does this mean Apple is going to PRISON?

/sarcasm

 

[charlituna]

I agree. But it's almost seems as though Jobs wouldn't have even considered opening up the/an iBookstore unless Apple was able to make these "arrangements."

No CEO is going to start something that would almost certainly be a losing effort for them. Unlike with music they really didn't have to have books to sell the iPad etc so there was no need to go in 'at cost' this time

 

[iGrip]

Is there a law in the USA that prevents dumping as a common business practise?

Here in Belgium it's illegal to (re-)sell a new goods under the price of buying it in.

Bargains (during the soldes periods) can only be on old goods during the month July and January and on goods that have been in stock longer than 6 months, but even the maximum discount would be 90% of the inbuying amount.

This is to prevent that a company can run its competitors out of business and getting sole dominance over a markt when it has a huge financial reserve.

It is also illegal in the US for a company to "run its competitors out of business and getting sole dominance over a markt when it has a huge financial reserve."

The methods of preventing that are very different in the US. But the underlying reasons for making such practices illegal are the same.

 

[Oletros]

Only in America is allowing people to charge what they think something is worth collusion.

No, it isn't. Tell that to the publishers that changed to Agency model with Amazon without colluding with others. They don't have to change anything

 

[Tailpike1153]

The fact that ALL of the publishers rolled over and settled with the DoJ should have been a huge clue that there was something rotten afoot.

I thought it meant that the publishers were too broke to fight the US Govt. If the publishers had Apple's piggy bank, perhaps they wouldn't have been so quick to cave.

 

[Oletros]

But the judge decided in advance it was, said as much before the trial and stuck to her opinion

No, the judge didn't did that

 

[4TheLoveOfTech]

Dear God I hope you don't live in one of those awful states where judges are elected and you could be one some day. This is such a tremendous misunderstanding of the judicial system as to be terrifying.

Perjury:
: the voluntary violation of an oath or vow either by swearing to what is untrue or by omission to do what has been promised under oath : false swearing.

By the definition of the term Perjury it has been committed.

In answer to your other question of my residence; I live in California but was Designed in Seattle.

 

[charlituna]

Although to be fair, Amazon does currently have what I believe is the best eBook platform taken as a whole on the market right now.

And a major part of that was Amazon's long time MFN, plus exclusivity deals, which let them undercut everyone else because they could afford to take a loss on ebooks AND prevent others from having the title at any cost.

But no one saw the legal wrong in any of this and still doesn't. Because its not Apple doing it. Same as their tax situation, use of Chinese labor etc.

 

[EbookReader]

http://www.washingtonpost.com/busin...d6258e-e966-11e2-818e-aa29e855f3ab_story.html

U.S. District Judge Denise Cote said Apple knew that no publisher could risk acting alone to try to eliminate Amazon.com’s $9.99 price for the most popular e-books so it “created a mechanism and environment that enabled them to act together in a matter of weeks to eliminate all retail price competition for their e-books.”

The Manhattan jurist added: “The evidence is overwhelming that Apple knew of the unlawful aims of the conspiracy and joined the conspiracy with the specific intent to help it succeed.”

The publishers knew that they need at least 4 of them working together in order to force Amazon off wholesale.


DOJ also got this as evidence.

 

[calpolygraduate]

Apple is definitely guilty and just needs to pay up!

 

[Gasu E.]

So they'll be trying to do what Apple attempts to do with every product?

I don't know if you happened to notice that Apple doesn't have a dominant market share in either computers or smart phones. In fact, Apple has a history of maintaining high prices and high margins, at the expense of market share. In other words, you basically have no idea what you are talking about. I suggest you go read a business book or something.

 

[charlituna]

They don't need to get together. Any Publishers could set the price of their book however they wanted. The $12 and $14 prices were general price points, not hard and fast rules.

Actually they were are hard and fast rules. For textbooks, at least on the k-12 level, and Fiction you can't go higher than $14.99. Apple didn't want to give the publishers total freedom to screw customers.

 

[maelstromr]

Perjury:
: the voluntary violation of an oath or vow either by swearing to what is untrue or by omission to do what has been promised under oath : false swearing.

By the definition of the term Perjury it has been committed.

In answer to your other question of my residence; I live in California but was Designed in Seattle.

Every person (including companies) is allowed to defend themselves by putting the Government to it's burden (in criminal matters "beyond a reasonable doubt"). You are not guilty of perjury for saying "I didn't break the law". They didn't break the law until proven guilty (see, the Constitution), ergo they cannot lie about saying they did not break the law until AFTER they have been found guilty. If someone misstated or omitted a fact, as opposed to a subjective issue of law, that might, maybe, be an issue of perjury.

 

[charlituna]

Anti-trust is to protect COMPETITION, which in turn protects the consumers. It is not the government's job to get you a cheaper book,

Not according to the DOJ who declared when this all started that there is a correct price for ebooks and they knew what that price was and were apparently setting out to make sure it was what was being charged.

 

[Lycanthrope]

Call me naïve perhaps, but what exactly is the point of a publisher in this day and age? It's like record labels, they're redundant and just cream off money for basically nothing.

The whole model stinks and publishers/artists should deal directly with the points of sale. This way of operating is becoming more and more popular and I hope it's the future.

 

[IJ Reilly]

It's not too much of a surprise since the judge pretty much admitted it was a show trial. The DOJ took Amazon's side and the book publishers all folded. It's odd that the government would take the side of someone with 90% market share who was arguably "dumping" to gain control of the market. This thread really should be in the political section since the whole trial was political (as is application of anti-trust law in general). Each administration has its own priorities as to who to go after.

It wasn't a "show trial," it was a virtual slam-dunk for the government. I have been saying this since the very start, only to be disbelieved by nearly everyone. The DOJ almost never takes an antitrust case to trial unless they know they can win. The vast majority are settled, which is what Apple should have done a long time ago. It was a fool's errand to press the case, and now they look foolish. This outcome is only surprising to those who don't understand the law, or don't want to understand it.

 

[EbookReader]

Apple and the same 5 Publishers settled with the EU after the EU sued for ebook price fixing antitrust.

http://www.bloomberg.com/news/2012-12-13/apple-four-publishers-bid-to-end-eu-price-fixing-probe.html
Apple, Publishers Settle EU E-Books Price-Fixing Probe


So why did Apple settled in the EU but didn't settle in the USA?

 

[iGrip]

Ironic that they tried to break Amazon's monopoly on the market and complete control over publishers, and they're the ones that ended up getting hit with an anti-trust lawsuit.

Apple raised that point, and the judge dealt with it specifically:

If Apple is suggesting that Amazon was engaging in illegal,monopolistic practices, and that Apple’s combination with the
Publisher Defendants to deprive a monopolist of some of itsmarket power is pro-competitive and healthy for our economy, itis wrong. This trial has not been the occasion to decidewhether Amazon’s choice to sell NYT Bestsellers or other NewReleases as loss leaders was an unfair trade practice or in anyother way a violation of law. If it was, however, the remedyfor illegal conduct is a complaint lodged with the proper lawenforcement offices or a civil suit or both. Another company’salleged violation of antitrust laws is not an excuse forengaging in your own violations of law.

Sorry about the formatting. The original looks as if it had been scanned by an ape.

 

[AdonisSMU]

Apple uses WHOLESALE with music.

Not agency.

Apple only use agency with APP.




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Case in point. Amazon discounted Lady Gaga digital CD to $0.99 in the first week of its release. Amazon used that as a loss leader and it lost a few millions on it.

Again not true. Apple sells the music at $1.29 cents on average unless the record company is running a sale of some sort. Apple takes their same 30% cut.