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

[mrxak]

Everyone who is defending Apple ask yourself ONE question right now-

If SAMSUNG or GOOGLE were in the shoes of Apple would you be supporting them as you are now of Apple?

Ask yourself that.

Because you know you would not.

HYPOCRITES

If Samsung or Google did what Apple did, that is, offer the same deal to several suppliers, I would not see anything wrong with that.

The publishers, on the other hand, may have indeed broken the law. We'll never know, because they settled rather than have a trial where facts could be presented. Did Apple benefit from publishers possibly colluding? Probably. But there's no evidence presented by the government that Apple encouraged such behavior.

 

[aerok]

I don't think that I anointed them saints. I was just saying that if the market for an ebook is set at a loss then publishers will not be able to sign some of the smaller named authors.

Oh I thought you were saying that they were only encouraging books to help smaller stores.

----------

If Samsung or Google did what Apple did, that is, offer the same deal to several suppliers, I would not see anything wrong with that.

The publishers, on the other hand, may have indeed broken the law. We'll never know, because they settled rather than have a trial where facts could be presented. Did Apple benefit from publishers possibly colluding? Probably. But there's no evidence presented by the government that Apple encouraged such behavior.

There is, based on what Steve Jobs said about the $14.99 pricing. I believe that's what the prosecutors used as evidence.

 

[krzyglue]

According to the government's slide, average publisher prices went down.

Average prices of *all* publishers went down, but prices of those who colluded went up. I'm repeating myself, but I suspect you aren't listening.

 

[aerok]

If Samsung or Google did what Apple did, that is, offer the same deal to several suppliers, I would not see anything wrong with that.

The publishers, on the other hand, may have indeed broken the law. We'll never know, because they settled rather than have a trial where facts could be presented. Did Apple benefit from publishers possibly colluding? Probably. But there's no evidence presented by the government that Apple encouraged such behavior.

You might not behave this way but I can name a few people here that would scream foul if the same happened to any other company. All fanboys for any company react this way I guess.

Either way, it's annoying hypocrisy

----------

Average prices of *all* publishers went down, but those who colluded went up. I'm repeating myself, but I suspect you aren't listening.

Repeatition does not work here, logic neither. Why are we even posting

 

[TPadden]

This is actually a loss for the consumer. Most of the costs that go into a book are present in the ebook as well. Paper and ink are cheap, writing, editing, promoting is where the majority of costs are found.

When Amazon was selling their ebooks at $9.99 they were selling them at a loss knowing full well that they would make up the difference in other areas, and that competitors would be unable to match those prices......

I'm an unabashed Amazon fanboy and can tell there are very few readers here who have ever picked up a Kindle or opened the Kindle app on their Mac/IPad. $9.99 at a loss???? .....

I read at least seventy five to a hundred books a year, and have never paid more than $4.00 for a book on Amazon. Authors seem to have no problem publishing there without going through the paper and ink publishing process.

http://www.amazon.com/gp/feature.html?ie=UTF8&docId=1000706171


They even have forum discussions on books less than $1.99 with no shortage of books (no fewer than 6,000 threads on books under $1.99) and authors partaking in the discussion.

http://www.amazon.com/gp/communitie...dPage=1&x=-1377&y=-349&cdForum=Fx1D7SY3BVSESG

 

[charlituna]

I get what you're saying, and I actually agree. For all the talk of prices raising by the major publishers, average prices actually dropped, and each publisher priced their ebooks quite differently. Seriously, go look at the government's own chart. The reality is, when everyone switched to agency, the prices went from being fixed at almost the same level to wildly different between each publisher. That's a good thing.

Yes one would think that. Then books are priced according to the value of the book and the market agreement with that value. Something like Harry Potter which is old news is likely to be $6-7 while a hot title like Ender's Game or a new release might be a bit more.

Or would be if things went allowed to be on one store which has pricing control like Amazon's old plan which they are gunning to return to

 

[AaronEdwards]

Not in the long term, no. As an author/publisher you hate Amazon's pricing, for the reasons stated by publishers over and over again. It lowers the perceived value of ebooks to the point where nobody wants to buy them anymore, either eventually from the undervaluing, or when Amazon raises prices again because they've driven out all competition from the market. You certainly can't afford to sell hard copies anymore.

Small publishers, and low-volume works in particular are hit hard by this. The end result is simply less authors, less books.

If a book costs $1 no one would buy it anymore? They would instead buy the book that costs $12.99? Or did you mean that if every book cost $1 then people would just stop buying books and instead spend money buying something else?

 

[charlituna]

Yes, let's feel sorry for Apple who pays virtually no income taxes. If companies like Apple paid their fair share of taxes maybe the deficit wouldn't be so high.

Not even the US government is claiming Apple pays no taxes. Unless in an area of the country that doesn't tax sales etc.

The whole crap with the Senate is that they created laws that Apple follows that result in Apple not having to pay taxes in the US on money from outside the country and rather than change those laws, the US thinks Apple should just ignore the law and pay double taxes, once to whatever country and once to the US. Not really fair in the governments part is it.

 

[drorpheus]

I don't think that I anointed them saints. I was just saying that if the market for an ebook is set at a loss then publishers will not be able to sign some of the smaller named authors.

C'mon dude, why do you fail to realize the publishers get the money they charge for the books they offer, they will never sell them at a loss, you seem to be getting confused that publishers are not resellers or retailers they are wholesale. Just like record labels, they sell there CDs and DVDs for $4-$8, then the stores that buy them sell them for $18+ or whatever they choose to charge, the label doesn't care nor does the publishers as long as their accounts are paid in full. If they don't like the retailers pricing of thier product, they terminate the wholesale contract/account. They don't lose any money, if they did, they would cut them off. That's it.

 

[Risco]

I bet Steve is turning over in his grave right now...

 

[BaldiMac]

Meh, I don't see how. But I'm sure you do. So, how will this be bad for the book market?

I think it will result in reduced competition and devaluation of the product.

----------

There is, based on what Steve Jobs said about the $14.99 pricing. I believe that's what the prosecutors used as evidence.

I don't understand how that quote is evidence of anything. Was Jobs supposed to be unaware what an MFN clause does?

 

[aerok]

Was Jobs supposed to be unaware what an MFN clause does?

I believe Cote took that quote as an indication that Job spoke to publishers to find a common solution together to have higher prices while being competitive to Amazon, which is illegal. I don't think the MFN clause is really relevant here.

 

[dragje]

I think it will result in reduced competition and devaluation of the product.

But this is based upon what? Your opinion? Let's look at the market, first of all, even when Apple will be found guilty again they will keep selling e-books at the same prize or Apple will be out of that part of the market. Second, next to e-books from Apple's stores people can buy e-books from various stores. So it will certainly will not disturb any kind of distribution.

And third, but that's a speculation from my point of view, to condemn prize agreements other players might be able to step in, not to worry about the "big boys" crushing them (unfair competition) due of illegal prize agreements.

 

[samcraig]

But there's no evidence presented by the government that Apple encouraged such behavior.

Regardless - that point doesn't mean much because even if you believe it (which you obviously do) - Apple was still found guilty. So you're going to have to live with that decision.

 

[aerok]

=Apple was still found guilty. So you're going to have to live with that decision.

Unless they win the appeal which I highly doubt... I just wonder how many millions Apple will lose from this with not only the fine but the numerous class action lawsuits that will follow.

And would Amazon customers be allowed to take on Apple for a class action lawsuit too since they overpaid as well?

 

[samcraig]

Unless they win the appeal which I highly doubt... I just wonder how many millions Apple will lose from this with not only the fine but the numerous class action lawsuits that will follow.

And would Amazon customers be allowed to take on Apple for a class action lawsuit too since they overpaid as well?

Well there's always an appeal. But just like with the Samsung case and every other one - I was commenting on the here and now. No one can predict what will or won't happen. As of right now - Apple was found guilty (I know you get this).

And if Apple appeals and wins - that doesn't necc mean they didn't collude. Just like right now it doesn't mean they did collude. I am typing the factual information. They have a guilty verdict today.

 

[silentmajority]

I'm an unabashed Amazon fanboy and can tell there are very few readers here who have ever picked up a Kindle or opened the Kindle app on their Mac/IPad. $9.99 at a loss???? .....

I read at least seventy five to a hundred books a year, and have never paid more than $4.00 for a book on Amazon. Authors seem to have no problem publishing there without going through the paper and ink publishing process.

http://www.amazon.com/gp/feature.html?ie=UTF8&docId=1000706171


They even have forum discussions on books less than $1.99 with no shortage of books (no fewer than 6,000 threads on books under $1.99) and authors partaking in the discussion.

http://www.amazon.com/gp/communitie...dPage=1&x=-1377&y=-349&cdForum=Fx1D7SY3BVSESG

Many of the books you linked to are self published, short stories, or relatively old. Most of the publishers revenue comes from new releases, so selling them at a loss does hurt the industry.

http://money.cnn.com/2012/04/25/technology/amazon-ebook-prices/index.htm

"Cutting book prices has been their strategy all along," says Colin Gillis, a senior tech analyst at BGC Financial. "Everyone's hyping this [suit] up as some good move for Amazon. All this means is that they can sell e-books at a loss. And they'll do it."

That makes the DOJ's suit bad for Amazon's e-book competitors.

"The competitors aren't able to subsidize sales -- they need to make a profit," said Rob Sullivan, a founder of consulting firm Navint Partners. "How can they compete with Amazon taking a loss? If this were steel from a foreign country being sold for less than it's worth, we'd call it predatory pricing and slap a tariff on it."

 

[0x0x0x0]

I had problems with that graph when I saw it the first time.

First, how come the average price line doesn't rise in accordance with all the individual publisher price increases? Something appears to be wrong.

Perhaps reading the Court's judgment would help, bottom of pg. 94:

The bottom flat line represents the average prices of non-major publishers

 

[hagjohn]

I think some of you are confused or believing the government position hook line and sinker.

The publishers did have control over pricing but they priced books individually based on a number of factors including projected popularity, genre and whether the ebook had interactive features that were obviously not in the paper copy.

The price of individual books would have fluctuated based on demand. The more popular a book was, the cheaper it could become after the initial sales. Early buyers/adopters always pay more.

What you guys are not seeing here is that some ebooks were more interactive than others and that interactivity should command some sort of premium.

It was Amazon that was trying to enforce some sort of broad wholesale price on books regardless of how much a particular book cost to produce. They were trying to leverage their market position to not only keep prices artificially low as a barrier to entry but also willing to take a lose out of their own pocket to drive sales of their hardware.

The Amazon model will result in some books simply not being published because they might not be popular enough to justify the initial investment and printing because of the rock bottom prices from Amazon. Those lower prices forced other stores to also lower their prices below cost or forced publishers to sell below their wholesale cost.

This battle is not just about eBooks but the entire book industry. You should not be in favor of dumping or predatory pricing because in the long run, you will miss out on some books that never see the light of day.

One more thing, Amazon devices typically did not support interactivity which is part of the reason why they just want ebooks to be basically PDF versions of the paper book wrapped in DRM.

They want to drive Apple out of the industry because Apple can provide a better experience for ebooks than they can.

Interesting but I'm not sure what this even has to do with Apple conspiring and being found guilty.

 

[ryaxnb]

LOL. OK, I've taken Business 101. And Economics 101, 102, 103... If the markets worked as well as you say, well, we really wouldn't need Anti-Trust, would we.

But seriously, there are a lot of reasons markets become uncompetitive, one of the main being customer switching barriers. Once the customer buys in, it's hard to switch. You know that happened with Windows, right?

Currently Amazon doesn't have switching barriers anything like Windows, but it's large market share gives it the opportunity to create some. Let's try, for example, Kindle. How the heck do they manage to sell that great little devices at such an extremely low cost, huh? I have four of them, for my family, as well as my iPad. Now I want to buy an eBook. Boy, the iBook version looks good, but... it only runs on my iPad. But if I buy my eBook from azaon, it runs on both the Kindle and the iPad. So which would I buy? It will never run on my Kindle, which is a closed device-- and never will, as the whole point of the Kindle is to lock you in to Amazon's eBooks.

I see examples all over the place. Amazon Prime is a whole bundle of services-- the "pull" is cheap, fast shipping, but now you get their streaming services, which make the competitive streaming services an extra cost for the consumer-- I'm already getting one "free", why pay for another? Small business? You want an online retail presence-- Amazon, even if you have your own hosted site. These are just single examples, and none by itself overwhelmingly scary, but it adds up.

Maybe I see things different because I'm in the IT industry, and I'm seeing how Amazon is gobbling up share in IT services and logistics... they seem to be everywhere, andtheir presence is growing. I do not like to see so much concentrated economic power; this is where markets break down.

That's called economics, too; it's in the second half of the book, past the part you read, Sam.

Your post has many flaws.
But i want to point one extremely big one. You say Kindles only read Amazon books. Many people during the heyday of the iPod said it only plays iTunes Store music. Both people made the same mistake -- they only play DRM files from the respective stores, but both the Kindle and iPod have always bene able to play/use non DRM files. The Kindle Fire can also use any ebook that has Android-compatible DRM. But the key point here is that if publishers sell DRM free ebooks, they would work on Kindle. And if you believe publishers simply can't sell DRM free ebooks, consider the iPod's dominance and how that forced them to take "the nuclear option" and sell DRM free music to end the iPod's dominance. I do not doubt the eBook publishers would consider taking "the nuclear option" of offering DRM free ebooks if Amazon dominated.

 

[0x0x0x0]

I think some of you are confused or believing the government position hook line and sinker.

The publishers did have control over pricing but they priced books individually based on a number of factors including projected popularity, genre and whether the ebook had interactive features that were obviously not in the paper copy.

The price of individual books would have fluctuated based on demand. The more popular a book was, the cheaper it could become after the initial sales. Early buyers/adopters always pay more.

What you guys are not seeing here is that some ebooks were more interactive than others and that interactivity should command some sort of premium.

It was Amazon that was trying to enforce some sort of broad wholesale price on books regardless of how much a particular book cost to produce. They were trying to leverage their market position to not only keep prices artificially low as a barrier to entry but also willing to take a lose out of their own pocket to drive sales of their hardware.

The Amazon model will result in some books simply not being published because they might not be popular enough to justify the initial investment and printing because of the rock bottom prices from Amazon. Those lower prices forced other stores to also lower their prices below cost or forced publishers to sell below their wholesale cost.

This battle is not just about eBooks but the entire book industry. You should not be in favor of dumping or predatory pricing because in the long run, you will miss out on some books that never see the light of day.

One more thing, Amazon devices typically did not support interactivity which is part of the reason why they just want ebooks to be basically PDF versions of the paper book wrapped in DRM.

They want to drive Apple out of the industry because Apple can provide a better experience for ebooks than they can.

You missed what this case was about and how the pricing under Apple's agreement worked. Please go read what the Court had to say

 

[Rossatron]

I'm an unabashed Amazon fanboy and can tell there are very few readers here who have ever picked up a Kindle or opened the Kindle app on their Mac/IPad. $9.99 at a loss???? .....

I read at least seventy five to a hundred books a year, and have never paid more than $4.00 for a book on Amazon. Authors seem to have no problem publishing there without going through the paper and ink publishing process.

http://www.amazon.com/gp/feature.html?ie=UTF8&docId=1000706171


They even have forum discussions on books less than $1.99 with no shortage of books (no fewer than 6,000 threads on books under $1.99) and authors partaking in the discussion.

http://www.amazon.com/gp/communitie...dPage=1&x=-1377&y=-349&cdForum=Fx1D7SY3BVSESG

Oh, $3.99 books. Quick, I want to read them. You could've linked to free books with expired copyrights - same argument
Books' price on amazon is around $10~.

 

[0x0x0x0]

But there's no evidence presented by the government that Apple encouraged such behavior.

Really?

Among other things:

Working against its own internal deadline, Apple achieved
for this industry in a matter of weeks what the Publisher
Defendants had been unable to accomplish for months before Apple
became their partner. In the words of Simon & Schuster’s Reidy,
Apple herded cats. Apple gave the Publishers a deadline and
required them to examine with care but quickly how committed
they were to challenging Amazon and altering the landscape of
e-book pricing. And when it appeared a Publisher Defendant
might be too scared to commit to this dramatic business change,
Cue reminded that Publisher Defendant that Apple’s entry into
the market represented a once-in-a-lifetime opportunity to
eliminate Amazon’s control over pricing. As he warned Penguin
just days before the Launch, “There is no one outside of us that
can do this for you. If we miss this opportunity, it will
likely never come again.”

By the end of
the trial, Apple’s witnesses no longer denied that they fully
understood that the Publisher Defendants would raise e-book
prices to the Agreements’ pricing caps as soon as the iBookstore
appeared on the market. Understanding that no one Publisher
could risk acting alone in an attempt to take pricing power away
from Amazon, Apple 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 evidence is
overwhelming that Apple knew of the unlawful aims of the
conspiracy and joined that conspiracy with the specific intent
to help it succeed.

 

[pmz]

Yet in this case Apple was found taking a stand for the Wrong and got busted.

In your eyes it's no problem that Apple broke the law, possibly committed perjury in it's statements as long as they can afford the penalty for Breaking the Law.

In my eyes, there's a big difference between "law" and what's right.

 

[TPadden]

Oh, $3.99 books. Quick, I want to read them. You could've linked to free books with expired copyrights - same argument
Books' price on amazon is around $10~.

You want to start a great books I've read for $3.99 or less thread, go ahead, I'll post a LONG list!