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

[Mr.damien]

One book is not a trend. Particularly when this could be a limited time price due to a special deal. They do happen.

I just took a sample. I bought dozens book on iBooks and everytime I check Amazon first to know the real competitive price.

Almost everytime Apple is more expensive. It's just a fact easy to check by yourself...

 

[SlCKB0Y]

Where did she get her law degree at? Night School with Luis Tully?

A publisher setting the price for an eBook in the iBookstore is no different than me, as a developer, setting the price for my app in the App Store.

#EpicFail

Congratulations for demonstrating a complete lack of knowledge of both the law in general and this case in particular!

Here's a hint: http://en.wikipedia.org/wiki/Cartel

 

[maelstromr]

I'm pretty sure the DOJ did not do that, because it is not their job to do that.

Instead, the DOJ pursued this to bring an end to a massive and damaging combination in restraint of trade.

The price level of books is set by the market. It is the job of the DOJ to ensure that a free market is available so that is able to happen.

The DOJ doesn't give a damn if books cost a little or a lot, but only that the market functions in a manner so that they are able to be sold at fair market value.

And you don't find anything inconsistent in the DoJ bringing charges against Apple here for this scheme but (so far) having left Amazon, holding 90% of the market AND engaging in behavior clearly limiting competition, to continue happily?

 

[Phokus]

Good, this was as slam dunk a case as you can get. A sure win for the consumers.

 

[samcraig]

And you don't find anything inconsistent in the DoJ bringing charges against Apple here for this scheme but (so far) having left Amazon, holding 90% of the market AND engaging in behavior clearly limiting competition, to continue happily?

They've limited competition illegally? Do tell. Is Apple's iBookstore not able to operate? Is Apple losing money with the iBookstore?

Are there not several other eBookstores? Are they all free to charge whatever they want?

 

[TouchMint.com]

This mean I can get rid of iBook now?

 

[coolfactor]

This was OBVIOUS after the email from Jobs was released. I am not typically a fan of the word "greedy" to describe companies since they are in business to make money. Unfortunately Apple takes it to a new level, but they have been successful at it.

My guess is that they will pay less than they already paid their counsel.

The *first* email was proven to be a draft that was never sent! It was a submission of evidence designed to mislead and turn the tide against Apple. The actual email that was sent (which was much longer) had different wording and clearly showed that Steve was not encouraging Apple to do any collusion, but merely coordinate normal everyday, and legal, business negotiations.

 

[nutjob]

Well it's official now, Apple is a criminal corporation. Shame that they won't get the corporate death penalty. They'll just pay 0.0000000000001% of their earnings to make it go away. And that's the miscarriage of justice here.

 

[aristotle]

Can someone please explain to me how the government is protecting consumers here? They want to restore the monopoly of Amazon?

How is Apple guilty of price fixing if the agency model gives power to the publisher to set prices on books instead of the retailer? Apple has no control over prices under the agency model.

Under the old model, Amazon, as the monopoly player was able to "dump" ebooks at prices below wholesale which made it impossible for new competitors to enter the field and possibly cannibalized sales of paper books or forced prices of paper books below break even.

Regardless of whether a book is sold as paper or ebook, there are fixed costs on writing, illustrating and formatting a book and even if you do sell some copies as ebook, you are likely going to have to sell it as a paper book as well because not everyone wants an ebook copy.

Those fixed costs exist regardless of the existence of an ebook which are both the initial creation of the book and the formatting/printing shipping of the physical copies.

What favors did Amazon execs give for this anti-consumer verdict?

In the long run, the consumer loses out on having some books published simply because the publishers cannot recoup their costs on less popular books and it enshrines a monopoly position for Amazon.

I will never ever buy a book from Amazon out of principle.

 

[maelstromr]

They've limited competition illegally? Do tell. Is Apple's iBookstore not able to operate? Is Apple losing money with the iBookstore?

Are there not several other eBookstores? Are they all free to charge whatever they want?

Several other bookstores getting 10% of the market. The issue is not charging what you want, but the ability to charge a competitive price not based in unfair advantages held through monopolistic behaviors/positions. No one can do this with Amazon in the mix without teaming up, and that teaming was just knocked out by this case, freeing Amazon to continue doing what it wants.

NO ONE can sell ebooks at a profit without some other major infrastructure allowing them to take a loss on the ebooks, and that is a bad situation for consumers.

 

[cdmoore74]

Wow! Such Apple fanboism here! If Apple stabbed your mother in the back you guys would blame your mom for walking backwards into the knife.

 

[nutjob]

And you don't find anything inconsistent in the DoJ bringing charges against Apple here for this scheme but (so far) having left Amazon, holding 90% of the market AND engaging in behavior clearly limiting competition, to continue happily?

It's not illegal to thrash your competitors. No one is forcing anyone to buy from Amazon, but Steve Jobs is on record saying that "Amazon will pay the same", ie more. Apple forced Amazon to pay more for ebooks.

Pretty simple and pretty damning. Apple should be ashamed.

 

[coolfactor]

Good, this was as slam dunk a case as you can get. A sure win for the consumers.

How? Because Apple's prices were higher than Amazon's? And the consumer wins whenever the price is lower? That's a shallow look at the actual marketplace. Lower prices does not mean better for consumers. Too low of prices can actually have a negative effect on the overall economy.

Here in my country, big-box stores have been swarming in year after year and small businesses just can't compete. Price-conscious consumers are clearly in favor of the lower prices offered by those big stores, and yes, it does employ locals, but the profits are all shipped out of town, and even possibly out of the country. How is that good for the local economy? Small businesses encourage profits to remain in their respective communities. That's just my 2¢.

 

[nutjob]

Wow! Such Apple fanboism here! If Apple stabbed your mother in the back you guys would blame your mom for walking backwards into the knife.

Don't be ridiculous. They'd want to know the features of the iKnife are and when it will be released so that they can be cool and stab their mothers too, with a "magical" and "revolutionary" knife.

 

[iLilana]

this s bizarre

Why do I get the impression apple was thrown under the bus by the publishers?

 

[Phokus]

Can someone please explain to me how the government is protecting consumers here? They want to restore the monopoly of Amazon?

Because the government views price fixing as a much bigger evil than just being a monopoly. Apple hurt consumers with their conspiracy because prices went up afterwards. If Amazon abuses their monopoly and raises prices (which they won't, at least for a very very long time), then the government will go after them as well.

How is Apple guilty of price fixing if the agency model gives power to the publisher to set prices on books instead of the retailer? Apple has no control over prices under the agency model.

Because one publisher raising prices unilaterally wouldn't work, you need ALL of the publishers to do it in unison.

Under the old model, Amazon, as the monopoly player was able to "dump" ebooks at prices below wholesale which made it impossible for new competitors to enter the field and possibly cannibalized sales of paper books or forced prices of paper books below break even.

Why on earth is it a good thing that e-books be priced above paperbacks/hardcover books when the marginal cost of producing an e-book is almost zero while you have costs associated with physical copies of books? That's what happened when Apple stepped in.

 

[hagjohn]

Apple got caught. Plain and simple. You cannot conspire to set prices. Doesn't matter if it's setting the price higher or lower. It's illegal.

If you manipulate the market, then it's not a free market.

 

[iGrip]

II didn't like it when the DOJ went after Microsoft and I didn't like it when they went after Apple.

S'funny. People who believe that functioning markets are a necessary basis for capitalism generally like it that the DOJ did both of those things.

 

[samcraig]

Several other bookstores getting 10% of the market. The issue is not charging what you want, but the ability to charge a competitive price not based in unfair advantages held through monopolistic behaviors/positions. No one can do this with Amazon in the mix without teaming up, and that teaming was just knocked out by this case, freeing Amazon to continue doing what it wants.

NO ONE can sell ebooks at a profit without some other major infrastructure allowing them to take a loss on the ebooks, and that is a bad situation for consumers.

So you're OK with Apple's monopoly of the music industry then. Gotcha.

 

[nutjob]

How? Because Apple's prices were higher than Amazon's? And the consumer wins whenever the price is lower? That's a shallow look at the actual marketplace. Lower prices does not mean better for consumers. Too low of prices can actually have a negative effect on the overall economy.

Here in my country, big-box stores have been swarming in year after year and small businesses just can't compete. Price-conscious consumers are clearly in favor of the lower prices offered by those big stores, and yes, it does employ locals, but the profits are all shipped out of town, and even possibly out of the country. How is that good for the local economy? Small businesses encourage profits to remain in their respective communities. That's just my 2¢.

Yeah, lower prices are the worst thing on earth, they should be illegal. I hate getting more goods and services for my income. We should all pay $100,000 for a loaf of bread, that'll help the economy!

 

[samcraig]

Why do I get the impression apple was thrown under the bus by the publishers?

Funny thought. The publishers most likely knew or were told they would be found guilty - so they settled out of court. Apple chose to battle in court. They weren't thrown under any bus. Apple chose a different strategy and lost.

 

[nutjob]

Apple got caught. Plain and simple. You cannot conspire to set prices. Doesn't matter if it's setting the price higher or lower. It's illegal.

If you manipulate the market, then it's not a free market.

If there is anything Apple is against, it's a free market.

 

[iEvolution]

A win for the consumer, up until the point at which Amazon finishes driving out any and all competition.

Even then I would trust Amazon A LOT more than I would trust Apple.

 

[iGrip]

And you don't find anything inconsistent in the DoJ bringing charges against Apple here for this scheme but (so far) having left Amazon, holding 90% of the market AND engaging in behavior clearly limiting competition, to continue happily?

IMO, the DOJ should investigate Amazon's strategies, and if found to be illegal, the DOJ should prosecute Amazon.

Are you surprised by that opinion?

 

[Boston007]

Can someone please explain to me how the government is protecting consumers here? They want to restore the monopoly of Amazon?

Amazon never had a monopoly. Get over your Amazon hate.

How is Apple guilty of price fixing if the agency model gives power to the publisher to set prices on books instead of the retailer? Apple has no control over prices under the agency model.

Because the publishers and Apple all discussed TOGETHER how to properly set prices in the market. It does not matter if they set prices at $1 or $100. Colluding to set prices, which is WHAT THE PUBLISHERS did is ILLEGAL.

Why can't you people understand this? Apple was INVOLVED in these discussions! See Jobs' remark to Mossberg in the video someone posted earlier. he was basically telling Mossberg the prices will be set by publishers across the retail board - ILLEGAL!

Under the old model, Amazon, as the monopoly player was able to "dump" ebooks at prices below wholesale which made it impossible for new competitors to enter the field and possibly cannibalized sales of paper books or forced prices of paper books below break even.

So what?! That is Amazon's choice to make!

Regardless of whether a book is sold as paper or ebook, there are fixed costs on writing, illustrating and formatting a book and even if you do sell some copies as ebook, you are likely going to have to sell it as a paper book as well because not everyone wants an ebook copy.

Those fixed costs exist regardless of the existence of an ebook which are both the initial creation of the book and the formatting/printing shipping of the physical copies.

Then explain why an ebook should cost more than a paperback? This was the issue publishers hated, because they new their profit margin would diminish. It's the same reason the music labels were fighting tooth and nail with digital music. The book publishers are acting the same way the music publishers were acting. There is a reason the book publishers settled here, because they knew they were wrong.

What favors did Amazon execs give for this anti-consumer verdict?

It's only anti-consumer to you. There are many people who are happy with this verdict because like me, they were angered that ebook prices jumped after Apple got involved.