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

[samcraig]

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.

I understand where you're coming from. I simply don't agree. I don't think Apple had any altruistic intentions. Like I wrote before - I believe that Apple wanted to maximize their profits if they were going to get into the eBook market. They couldn't do that if they stuck to their 30% take from publishers. And clearly - they made no effort or seemingly didn't work on any negotiations below 30%. I'm not calling Apple greedy. Every business tries to maximize profits.

The evidence is pretty damning. So you can like what Apple did in principle - but ultimately - it wasn't about principle. And they really in no better/worse position to compete against Amazon when this all started. Apple can still set its own prices and decide whether or not to renegotiate next go-around to take whatever percentage they want from the publishers.

I don't understand your comment about crappy products though. Surely you don't mean that books and writers will turn out "crap" because Amazon has some so-called monopoly?

And as it's been pointed out - there's no evidence that Amazon intends to raise prices. And if they do - guess what - there will always be competition. Unless you think Apple will leave the eBook market. And Google will. And you can also predict that no one else would ever enter the market.

I think you're misreading those that are happy with the decision. Their and my commentary isn't about excitement over cheaper products. You also seem to think some of us (apparently) are short sighted. I also don't think this is the case at all. We just don't agree on the outcome and forecast. I respect your opinion. I don't agree with it. But I respect it. And I wouldn't resort to making generalizations about how someone feels about this issue and how they would vote or how they would react to other issues.

Finally - Your initial comment is absurd. I don't think you want to go there. I know you have a decent head on your shoulders. No need to resort to what I consider a childish whiplash response before posting your thoughtful one.

 

[maelstromr]

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 your perceive that I misunderstood something then be courteous to say what it is, and not make a dismissive non-consequential comment...

You clearly have not read everything, even everything I have wrote, because this has been explained multiple times INCLUDING the post immediately above your nasty-gram. I've been putting time in thought into this, you can at least do the same.

 

[samcraig]

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.

No one had a problem (and even cheered) that many on the panel when Tim Cook was brought up to speak about taxation had/praised iPhones and iPads...

 

[maelstromr]

I understand where you're coming from. I simply don't agree. I don't think Apple had any altruistic intentions. Like I wrote before - I believe that Apple wanted to maximize their profits if they were going to get into the eBook market. They couldn't do that if they stuck to their 30% take from publishers. And clearly - they made no effort or seemingly didn't work on any negotiations below 30%. I'm not calling Apple greedy. Every business tries to maximize profits.

The evidence is pretty damning. So you can like what Apple did in principle - but ultimately - it wasn't about principle. And they really in no better/worse position to compete against Amazon when this all started. Apple can still set its own prices and decide whether or not to renegotiate next go-around to take whatever percentage they want from the publishers.

I don't understand your comment about crappy products though. Surely you don't mean that books and writers will turn out "crap" because Amazon has some so-called monopoly?

And as it's been pointed out - there's no evidence that Amazon intends to raise prices. And if they do - guess what - there will always be competition. Unless you think Apple will leave the eBook market. And Google will. And you can also predict that no one else would ever enter the market.

I think you're misreading those that are happy with the decision. Their and my commentary isn't about excitement over cheaper products. You also seem to think some of us (apparently) are short sighted. I also don't think this is the case at all. We just don't agree on the outcome and forecast. I respect your opinion. I don't agree with it. But I respect it. And I wouldn't resort to making generalizations about how someone feels about this issue and how they would vote or how they would react to other issues.

Finally - Your initial comment is absurd. I don't think you want to go there. I know you have a decent head on your shoulders. No need to resort to what I consider a childish whiplash response before posting your thoughtful one.

I actually intended the initial comment to be a friendly "good morning" remark.

Agreed that we have a fundamental different viewpoint, but I do NOT believe Apple is altruistic in any sense. They are a corporation, they exist to make money. I just happen to think they are a smart corporation, don't do things that are plainly bad just to make money, and in this particular case their "bad acts" were overall good for me.

 

[0x0x0x0]

No. You go read. I'm not doing it for you.

You clearly have not read everything, even everything I have wrote, because this has been explained multiple times INCLUDING the post immediately above your nasty-gram. I've been putting time in thought into this, you can at least do the same.

Evidence fails you, just like it did Apple? C'mon, it's not that hard to say "this is what I said", "this is what you thought it meant", "in reality it means this", is it? The truth is, and the only plausible inference to be drawn from your refusal is that I, in fact, didn't misunderstand you at all, did I?

----------

Agreed that we have a fundamental different viewpoint, but I do NOT believe Apple is altruistic in any sense. They are a corporation, they exist to make money. I just happen to think they are a smart corporation, don't do things that are plainly bad just to make money, and in this particular case their "bad acts" were overall good for me.

How was Apple's intermeddling good for you? Was it good for you that you, along with the rest of the consumers, had to pay higher prices for eboks, or was it good for you that every ebook retailed was retailing ebooks at the same price through no choice of their own, or was it good for you that, at the end of the day, the publishers we getting paid less than under wholesale agreements??.

 

[maelstromr]

Evidence fails you, just like it did Apple? C'mon, it's not that hard to say "this is what I said", "this is what you thought it meant", "in reality it means this", is it? The truth is, and the only plausible inference to be drawn from your refusal is that I, in fact, didn't misunderstand you at all, did I?

----------



How was Apple's intermeddling good for you? Was it good for you that you, along with the rest of the consumers, had to pay higher prices for eboks, or was it good for you that every ebook retailed was retailing ebooks at the same price through no choice of their own, or was it good for you that, at the end of the day, the publishers we getting paid less that under wholesale agreements??.

Every statement you have made this morning shows that you aren't reading earlier posts. I'm not being evasive, I'm just not rewarding you for stepping in with arguments that have been raised and addressed, in detail, on both sides, many times.

 

[0x0x0x0]

Every statement you have made this morning shows that you aren't reading earlier posts.

How?.. Just because you say something is true and wish so, doesn't necessarily make it so!

I'm not being evasive, I'm just not rewarding you for stepping in with arguments that have been raised and addressed, in detail, on both sides, many times.

Just had to check that 'evasive' meant what I thought it did... Yup, still does... You said I misunderstood something and when I asked what it were that I misunderstood you point blank refused to answer.

When you said that you thought Apple's actions as were pursued in this case benefited you, I asked how. Yet again you point blank refused to answer.

Unless you are willing to be specific and precise, I see no point taking this further...

 

[EbookReader]

1) Retail Price Competition was Eliminated
2) Prices for best sellers went up overnight from $9.99 to $12.99/$14.99


Could this be done without the collusion of 5 publishers?

Aka, can these 5 publishers bring this about without working together? doing so independently?


Also, how would you feel if the 6 Major Holllywood studios got together and decided to eliminate retail price competition and raise the price of Blu-Ray movie?

elimination of retail price competition mean Target, Best Buy, Wal-Mart etc...will be forced to price the movie at the same price. You can't shop around for a better deal because the "prices will be the same."

 

[vinyl313]

Regardless of if it was Apple or Google, or Enron, this doesn't sound illegal to me, a layperson, who understands that writers/publishers need to make money to some extent.

I'm not sure if I'm misreading what you are saying but reading "writers/publishers need to make money to some extent" seems to minimize what the writer/publisher deserves to make for their work.

Books take years to write and the writers deserve more than to some extent. Given the book is enjoyed by the buying public. If not for the writers, there would be no book market.

Again, I'm not sure if I misunderstood what you meant.

 

[EbookReader]

http://arstechnica.com/tech-policy/...-e-book-price-conspiracy-in-the-judges-words/

Amazon Kindle Content VP Russell Grandinetti testified at trial that “f it had been only Macmillan demanding agency, we would not have negotiated an agency contract with them. But having heard the same demand for agency terms coming from all the publishers in such close proximity... we really had no choice but to negotiate the best agency contracts we could with these five publishers.”

In Cote's view, this was nothing less than a concerted effort to raise prices—a conspiracy. She summarized Apple's responsibility for the whole situation this way:

The judge view:

A chief stumbling block to raising e-book prices was the Publishers’ fear that Amazon would retaliate against any Publisher who pressured it to raise prices. Each of them could also expect to lose substantial sales if they unilaterally raised the prices of their own e-books and none of their competitors followed suit. This is where Apple’s participation in the conspiracy proved essential. It assured each Publisher Defendant that it would only move forward if a critical mass of the major publishing houses agreed to its agency terms. It promised each Publisher Defendant that it was getting identical terms in its Agreement in every material way. It kept each Publisher Defendant apprised of how many others had agreed to execute Apple’s Agreements. As Cue acknowledged at trial, “I just wanted to assure them that they weren’t going to be alone, so that I would take the fear awa[y] of the Amazon retribution that they were all afraid of.” As a result, the Publisher Defendants understood that each of them shared the same set of risks and rewards.

1 publisher can't do it alone
but if 5 major publishers work together in collusion, it can succeed against Amazon.

 

[Mattstkc]

I'm not sure if I'm misreading what you are saying but reading "writers/publishers need to make money to some extent" seems to minimize what the writer/publisher deserves to make for their work.

Books take years to write and the writers deserve more than to some extent. Given the book is enjoyed by the buying public. If not for the writers, there would be no book market.

Again, I'm not sure if I misunderstood what you meant.

I think everyone sees publishers as evil just as they see record companies as evil. They're the giant dicks making the money on the backs of writers who see 1/10th of the money, but in reality it's the publishers that front the marketing money, and advance the writer to be able to complete the book and have that as their sole employment. they're a necessary function of content authors in most cases

 

[maelstromr]

http://arstechnica.com/tech-policy/...-e-book-price-conspiracy-in-the-judges-words/



The judge view:



1 publisher can't do it alone
but if 5 major publishers work together in collusion, it can succeed against Amazon.

The irony here is that the crime of collusion under anti-trust acts is so much easier to pursue than anything against Amazon for its admittedly more vague restraints on competition. Back to my original post...the cost of taking a stand on principle...

 

[samcraig]

The irony here is that the crime of collusion under anti-trust acts is so much easier to pursue than anything against Amazon for its admittedly more vague restraints on competition. Back to my original post...the cost of taking a stand on principle...

Not to be antagonistic - but you've used that expression before. Is it that you believe Apple was acting on principle and that they believed the way things worked was wrong and they took to the cause?

Isn't it possible, as I have written - that they just wanted to stack the deck in their favor - or at least bolster their entry into the marketplace regardless of what the market "norm" was at the time?

Why do you think Apple didn't lower their 30% take to compete against Amazon and just price match and/or even undercut on some titles for example?

Maybe I'm missing something when you say "taking a stand on principle" but to me it sounds like you think for Apple - it was about correcting the industry for the industry sake and not for their own?

 

[maelstromr]

Not to be antagonistic - but you've used that expression before. Is it that you believe Apple was acting on principle and that they believed the way things worked was wrong and they took to the cause?

Isn't it possible, as I have written - that they just wanted to stack the deck in their favor - or at least bolster their entry into the marketplace regardless of what the market "norm" was at the time?

Why do you think Apple didn't lower their 30% take to compete against Amazon and just price match and/or even undercut on some titles for example?

Maybe I'm missing something when you say "taking a stand on principle" but to me it sounds like you think for Apple - it was about correcting the industry for the industry sake and not for their own?

I believe Apple had said that it did not settle and took this to trial "on principle". That may have just been someone's inference, but in any event, that's what I'm talking about - fighting this out rather than settling when the publishers did.

 

[samcraig]

I believe Apple had said that it did not settle and took this to trial "on principle". That may have just been someone's inference, but in any event, that's what I'm talking about - fighting this out rather than settling when the publishers did.

ok.

I think that's lawyer/pr spin personally. I don't think what they were found guilty of had much to do with principles

 

[Phokus]

The irony here is that the crime of collusion under anti-trust acts is so much easier to pursue than anything against Amazon for its admittedly more vague restraints on competition. Back to my original post...the cost of taking a stand on principle...

GIVE ME A BREAK. There's no "Principle" here. Apple could have CRUSHED amazon by undercutting them on price (they are sitting on $150 billion in cash). However, Apple is not in the business of being a low margin business like Amazon is and the reason why they participated in this is because they wanted to ensure that their e-book business was profitable.

You're acting like they were doing this out of the kindness of their own hearts. Absolutely laughable.

 

[maelstromr]

GIVE ME A BREAK. There's no "Principle" here. Apple could have CRUSHED amazon by undercutting them on price (they are sitting on $150 billion in cash). However, Apple is not in the business of being a low margin business like Amazon is and the reason why they participated in this is because they wanted to ensure that their e-book business was profitable.

You're acting like they were doing this out of the kindness of their own hearts. Absolutely laughable.

See the follow up comment. I believe Apple said they were fighting this out, rather than settling like the publishers, on principle. Certainly it appears they chose to fight based on the principle that they believed they had done nothing wrong and wanted their day in court, and they paid the price for that principle fight. That's what the comment was about.

So many people ready to lash out without understanding the conversation...

 

[Oletros]

See the follow up comment. I believe Apple said they were fighting this out, rather than settling like the publishers, on principle. Certainly it appears they chose to fight based on the principle that they believed they had done nothing wrong and wanted their day in court, and they paid the price for that principle fight. That's what the comment was about.

So many people ready to lash out without understanding the conversation...

But they settled with the EU

 

[maelstromr]

But they settled with the EU

I can tell you from personal experience, principles for corporations in Europe are a lot more expensive than they are in the US. Apple is still a corporation, and there can still be a cash value where a principle just ain't worth it.

You can also still believe on principle that you did not violate US law, but did violate the more restrictive EU law.

 

[irnchriz]

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.

They pay all the tax they are required to by law. If the government wishes for them to pay more they should change the laws and outlaw tax avoidance schemes which are legal and used by every corporation. Apple pay around 6 billion dollars in tax along with paying staff and other costs in the US which all pays into the economy.

If the US government allowed apple to repatriate their overseas cash at a discounted rate (after all, they have already paid tax on it) they could net around 9-12 billion in one go from Apple.

 

[IJ Reilly]

See the follow up comment. I believe Apple said they were fighting this out, rather than settling like the publishers, on principle. Certainly it appears they chose to fight based on the principle that they believed they had done nothing wrong and wanted their day in court, and they paid the price for that principle fight. That's what the comment was about.

So many people ready to lash out without understanding the conversation...

I understand the conversation. The question was raised before all the bickering set in about why the publishers settled and Apple elected to go to trial. This is the first time I have seen an explanation:

The judge must now schedule a new round of hearings to determine what penalties, if any, to impose against Apple. A group of states that joined the case are asking for monetary damages. The Justice Department is asking the judge to establish an ongoing antitrust compliance program that includes an independent trustee.

In addition to protecting its reputation, avoiding a monitoring program and a trustee is probably a big reason Apple refused to settle, said Mark Lemley, a Stanford Law School professor.

Also outlined is the real hazard of pushing a case like this:

A New York federal judge's ruling that Apple Inc. conspired to raise electronic book prices cuts straight to the heart of the company's image as a consumer-friendly tech giant.

Apple now faces the prospect of a judge imposing government oversight of its deals with content companies along with the possibility of paying monetary damages. But for the company, the greatest stake in the case has always been the potential damage to its reputation.

With its motives and principles called into question, Apple took a defiant stance, vowing to appeal Wednesday's ruling despite the judge's decisive verdict and a decision by all its alleged co-conspirators to settle.

http://www.latimes.com/business/la-fi-apple-ebook-antitrust-20130711,0,6667511.story

The suggestion that Apple may decide to appeal this verdict all the way to the Supreme Court reminds me of Will Rogers' advice: "When you find yourself in a hole, stop digging."

 

[maelstromr]

The suggestion that Apple may decide to appeal this verdict all the way to the Supreme Court reminds me of Will Rogers' advice: "When you find yourself in a hole, stop digging."

They'll probably not get that far, but why stop now? There's nothing to lose now that they've been found guilty. You don't typical score points on the penalty for choosing to not exercise appellate rights.

 

[vinyl313]

I think everyone sees publishers as evil just as they see record companies as evil. They're the giant dicks making the money on the backs of writers who see 1/10th of the money, but in reality it's the publishers that front the marketing money, and advance the writer to be able to complete the book and have that as their sole employment. they're a necessary function of content authors in most cases

Yea, in fact, I read an interview recently with a woman wrote her first book, a medical/self help book that sold amazingly well and she made almost nothing from it as, like you said, the publishers got most of the money.

She self published her following books and has done very well for herself. This must have the publishers crapping their pants. One thing she did say was especially for first time writers, publishers are a necessary evil to get the writers names out there. ****** system.

 

[IJ Reilly]

They'll probably not get that far, but why stop now? There's nothing to lose now that they've been found guilty. You don't typical score points on the penalty for choosing to not exercise appellate rights.

Because the damage to the company's reputation will only be multiplied as the case is dragged out. They have plenty to lose on that score.

 

[0x0x0x0]

p

But they settled with the EU

Could've been something to do with the Commission's ability to fine upto 10% of world-wide group turnover, if I remember my days of EU law correctly...