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Apple Found Guilty of Conspiring to Fix Prices in E-Book Trial [Updated]
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http://www.publishersweekly.com/pw/...-judge-finds-price-fixing-in-e-book-case.html
Amazon: want retail price competition since it is in its DNA
Apple: doesn't not want retail price competition
Best way to eliminate retail price competition is to fix price and make "the price will be the same" everywhere. To that end, Apple succeeded. Until the DOJ intervenes.
Amazon: want retail price competition since it is in its DNA
Apple: doesn't not want retail price competition
Best way to eliminate retail price competition is to fix price and make "the price will be the same" everywhere. To that end, Apple succeeded. Until the DOJ intervenes.
Please stop throwing out the same uninformed opinions
1.) Amazon nor the publishers was not dumping or selling e-books at a loss. If you'd actually been an informed reader of the case and not just the headlines, you'd know that already. Amazon and the publishers were and are making a profit -- according to the publisher's own emails -- with or without the price fixing. The price fixing that Apple set was strictly so they could maintain their 30% profit margin, and the collusion with the other publishers so that they didn't compete against one another is illegal.
Remember: the accusation is collusion. Five publishers, which are supposed to be competing with one another, instead agreed to raise prices in unison so customers would have no choice but to pay the extra five bucks a book, no matter what store they went to or what publisher they decided to buy from. They acted in the same way cartels do, with Apple as the ringleader.
2.) Amazon set the price for their own outlet, just as Barnes and Noble can set their own prices for books in their own stores. But anybody else was free to price e-books from the same publishers higher or lower. Amazon could take a loss if they had to (yet they weren't), but they couldn't dictate prices for anybody else. They were not fixing prices.
3.) Your theories that Amazon will push everyone out of the market is called predatory pricing: undercut everyone to gain a monopoly, then jack up the prices. Nowadays, courts see it as a very dubious claim because there's really very little evidence that the latter actually happens.
If Amazon did decide to do that, guess what? It's the easiest anti-trust case to bring up, and so there is no reason (and this is the opinion of most courts) to preemptively bring it up. What's more, it's easy to enter the e-book market, so Amazon would have an incredibly hard time keeping competitors out except through their pricing model. That type of competition, in turn, benefits consumers. We want that.
What Apple did was illegal, and it was a clear f-you to the consumer. Accept that or don't, I don't care. It's what happened.
1.) Amazon nor the publishers was not dumping or selling e-books at a loss. If you'd actually been an informed reader of the case and not just the headlines, you'd know that already. Amazon and the publishers were and are making a profit -- according to the publisher's own emails -- with or without the price fixing. The price fixing that Apple set was strictly so they could maintain their 30% profit margin, and the collusion with the other publishers so that they didn't compete against one another is illegal.
Remember: the accusation is collusion. Five publishers, which are supposed to be competing with one another, instead agreed to raise prices in unison so customers would have no choice but to pay the extra five bucks a book, no matter what store they went to or what publisher they decided to buy from. They acted in the same way cartels do, with Apple as the ringleader.
2.) Amazon set the price for their own outlet, just as Barnes and Noble can set their own prices for books in their own stores. But anybody else was free to price e-books from the same publishers higher or lower. Amazon could take a loss if they had to (yet they weren't), but they couldn't dictate prices for anybody else. They were not fixing prices.
3.) Your theories that Amazon will push everyone out of the market is called predatory pricing: undercut everyone to gain a monopoly, then jack up the prices. Nowadays, courts see it as a very dubious claim because there's really very little evidence that the latter actually happens.
If Amazon did decide to do that, guess what? It's the easiest anti-trust case to bring up, and so there is no reason (and this is the opinion of most courts) to preemptively bring it up. What's more, it's easy to enter the e-book market, so Amazon would have an incredibly hard time keeping competitors out except through their pricing model. That type of competition, in turn, benefits consumers. We want that.
What Apple did was illegal, and it was a clear f-you to the consumer. Accept that or don't, I don't care. It's what happened.
Pardon my ignorance but was the price fixing relative to the Apple Store or to the market as a whole? I would assume that Apple is entitled to display any price it wants in its own store and deal with its suppliers accordingly. Or am I missing something?
Price fixing is usually relative to the whole market such as when Pepsi and Coke arrange to set a similar price to erase competition.
Price fixing is usually relative to the whole market such as when Pepsi and Coke arrange to set a similar price to erase competition.
It was price fixing relative to the whole market. The price you paid for an ebook in iBooks was the same as you'd pay at Amazon, or Barnes and Nobles, or Borders. It was the end result of the 5 leading US publishers colluded to control prices across the market.
Apple liked the deal became it put their ebook store on even footing with the well entrenched giant, Amazon. The publishers liked it because they wanted to sell ebooks for roughly the same price as their printed equivalents without any of their retailers having a say in the final pricing.
Though one little tidbit the hardcore "Amazon is guilty of dumping" crowd should love is that the judge has claimed the verdict has no say on Amazon selling ebooks at 9.99 was legal or not. This case was solely about collusion between Apple and the publishers, nothing more.
Answering my own questions.
I just read the above Reddit post and yes,
1) it was relative to the whole market
2) Apple was found liable as a facilitator, although I would think this has less effect than on the suppliers themselves.
If Apple is not a supplier and does not in itself offer first-tier products in result from the price fixing, how can it be found liable? It could be argued that Apple employees acted outside of the company's business and influenced and advised its suppliers. It's like Walmart employees giving business tips to Nabisco employees!
I just read the above Reddit post and yes,
1) it was relative to the whole market
2) Apple was found liable as a facilitator, although I would think this has less effect than on the suppliers themselves.
If Apple is not a supplier and does not in itself offer first-tier products in result from the price fixing, how can it be found liable? It could be argued that Apple employees acted outside of the company's business and influenced and advised its suppliers. It's like Walmart employees giving business tips to Nabisco employees!
It's because Apple was actively participating in and benefiting from the collusion. When you step back and look at it, Apple was the only company who came out ahead during the whole ordeal. The publishers actually made less money under the agency model than they did selling their books wholesale.
According to the government's slides, average accused publisher prices went up
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As you're in the IT industry, you know that you can buy mobi or azw books from other publishers and put them in Kindle devices or applications, don't you?
I don't buy any of my O'Reilly or Apress in the Amazon store, I buy them directly from the publisher
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What predatory pricing?
Some day, just for fun, I really would like to compare the comments in this thread with comments in threads about iTunes and iTunes Match.
Oh, I remember. I'm glad someone else out there is paying attention. Stay vigilant.
I was admittedly piggy backing on other comments for that number. A very basic google tells me Amazon execs have said 70-80%, though no one seems to come down firmly, perhaps it's difficult to pin down for some reason. Even if 70-80 is true, it's more than enough to merit potential anti-trust scrutiny, if not liability.
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I forgot where I was - let me be CLEAR:
70-80% of the market, instead of 90%, is still plenty of market power to justify my (and other's) earlier points about the misuse of the DoJ's authority for Amazon's benefit and the detriment of the market.
Isn't it early for you to be back at this?
As I have said, over and over, if "good for consumers" means "cheaper books today" then sure, it's "good for consumers."
However, I do not believe "cheaper books today" should be the goal of a free market place when "cheaper books today" is driving out competition and all but guaranteeing crappy products for higher prices once competition is driven out.
I take into account the costs of creating such material, of building viable marketplaces, of having competition that improves quality AND price. I believe the pressures created by Apple's actions here, whatever their legal (as opposed to right or wrong as some of you seem to think all things that are "illegal" are also "bad") status, were more beneficial than detrimental in the long term. I believe Amazon benefits from this ruling to the long term detriment of the consumer. I believe those who are just excited about cheaper products are exactly the kind of voters that get us into stupid regulatory messes all the time.
Evidently you missed what this case was about! Antitrust laws protect competition and not competitors- the Court found that Apple colluded with the named publishers to raise the prices in the marketplace and to eliminate competition- I cannot fathom what is so hard to understand...
Come on, if you're going to attack at least look back at what I was responding to to understand the context of the discussion. Johnny come lately to a several hundred post thread...
A ridiculous case and a prejudged verdict.
How on earth freeing the publishers from Amazon's monopolistic pricing scheme and offering them another channel to release their digital books, at whatever price they decide is market viable, a crime? DOJ had it completely backwards here I think.
How on earth freeing the publishers from Amazon's monopolistic pricing scheme and offering them another channel to release their digital books, at whatever price they decide is market viable, a crime? DOJ had it completely backwards here I think.
LOL. You'll be paying $19.99 for the Green Eggs and Ham ebook from Amazon if Apple looses at the appellate level.
You obviously have no idea how massive Amazon is becoming, and what will happen once they completely dominate this market as they did before. Apple was trying to prevent an Amazon Monopoly in ebooks.
Apple will have this overturned. The Judge was an Amazon Prime Member, and had a reputation as a "Super Saver Shipping" bundler. This will go on for quite a while longer.
Or, we can all Trust the Government. It work for the Indians, eh?
Prove to me why I should believe Amazon would not sell ebooks as cheaply as they sell literally every single other product they offer.
Also, "the judge was an amazon prime member".... so bloody what!? He's probably got an iPhone and an iPad like damn near every other moderately wealthy person in the US. You are grasping at pathetically empty straws.
what point are you trying to make? what specifically did I misunderstand about your post or its context?
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Perhaps you need to read what the Judge said and not speculate?..
Really you make a big assumption here. I have no issue with what Apple did. I do take the view that Amazon are dumping product. That I understand is illegal. Selling product at cost or below to gain or maintain market share.
Personally I think Apple made the right call and resellers, the public, publishers and authors benefit. Takeaway Apple and their moves and only Amazon and the public win. The public only win short term until bookstores are put out of business.
I personally think the Judge got it wrong. Just as I think you got it wrong when you assumed that people who don't support your view are blinded by Apple and unable to maintain valid judgement.
I've actually read the whole thread and, evidently unlike you, the Judge's Opinion and that being the reason for being "Johnny come lately" as you put it... So if you perceive that I misunderstood something then be courteous enough to say what it is, and not make a dismissive non-consequential comment...