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

Zimmy68 said:
Wow, couldn't have said it better myself. Excellent post on what really happened.

This was a market Apple had zero foothold in, they only had a few options.
Demand 30% and watch Amazon sell books for $4 - $5 less.
Sell the same as Amazon, relinquish their 30% Apple tax and have the other clients (music, apps) come at them for fairness.
Collude with an industry that was teetering and living off their old hardcover ways.

They colluded and got caught.
I don't even have a problem with that, just admit it, pay the penalty and move on.
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This is an example of Ignorance at Work.

Apple will win on appeal.
 
samcraig said:
As a consumer - I care about getting the best price for what I want to buy. So no - I don't care that Amazon wants to take a hit sometimes. Do I want Amazon to be the only eBook seller. No. But they won't ever be. The market won't allow it. As soon as they have achieved "monopoly" and (as some fear) start jacking up prices - that's when competition can enter the marketplace and charge less - just like Amazon used to.
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Except there won't be any competition at that point, once Amazon is able to run everyone out of business. That's what usually happens. You undercharge and run everyone out of business, once there's no one to remain competitive over, you exponentially raise the prices and the consumer is screwed since there's no where else to go. That's the natural cycle of the market.
 
Krevnik said:
The real problem here is that I don't think Amazon can continue to sustainably run so many loss-leaders in their store, eBook or otherwise. They are continuing to operate at a loss, and may be forced to cut back on this sort of behavior before they have a total grasp on the eBook market, although I suspect they already do have it.

.
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WRONG.

According to the DOJ, Amazon has been overall profitable from the beginning in selling ebooks.
 
intrepid00 said:
It is when competitors do it. I don't see your point.
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There is nothing wrong with allowing publishers to charge what they want for books. If the books sell at the publishers price great, if not they will lower it to Amazon levels. Thats letting the market work. There was no agreement on price. This case is about price fixing. Apple wanted to put the publisher on the agency model like they did with apps and music. There was nothing anti competition about what was done by Apple.
 
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appleisking said:
Except there won't be any competition at that point, once Amazon is able to run everyone out of business. That's what usually happens. You undercharge and run everyone out of business, once there's no one to remain competitive over, you exponentially raise the prices and the consumer is screwed since there's no where else to go. That's the natural cycle of the market.
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So you're saying (for example) in 20 years - if Amazon has a monopoly and cranks up the cost of ebooks - NO ONE could enter the market?

What about Apple? What about Google. What about some company that doesn't even exist yet.

Again - your scenario isn't likely to occur. But it will drive fear for sure...
 
AdonisSMU said:
Only in America is allowing people to charge what they think something is worth collusion.
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The publishers always were and are able to charge what they think a book is worth. Even under Amazon's original model -- the publishers set the price that Amazon paid per copy. Amazon was then free to compete on price by charging consumers whatever price they wanted.

The collusion is when the publishers decided (with Apple) to band together to force the Agency model on the entire industry. The agency model itself wasn't a problem, and it wouldn't have been a problem if the publishers acted individually in dumping Amazon. But they didn't, they acted in collusion
 
appleisking said:
Except there won't be any competition at that point, once Amazon is able to run everyone out of business. That's what usually happens. You undercharge and run everyone out of business, once there's no one to remain competitive over, you exponentially raise the prices and the consumer is screwed since there's no where else to go. That's the natural cycle of the market.
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Under Apple's plan which relied on the agency model being industry-wide with a MFN clause, there is no point to competition anyway. Every retailer is selling the exact same digital copy, for the exact same price. Competition is then merely an illusion
 
AdonisSMU said:
There is nothing wrong with allowing publishers to charge what they want for books. If the books sell at the publishers price great, if not they will lower it to Amazon levels. Thats letting the market work.
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Did you not read anything on this case? The book publishers (who compete) worked through Apple to raise book prices. When you talk to your competitors to raise prices you are guilty.

Apple was guilty as hell and it is a joke to even think they can get an appeal based on evidence Apple supplied from their own emails.
 
spazzcat said:
What I think a lot of people don't understand is Amazon's goal here is to push out the competition by selling ebooks at a loss. In many cases at a deep loss. This has been done many times before and has always ended bad for consumers. You know why? Because there will come a point in time when Amazon will have total control and will jack up prices and there is nothing you can do at that point... Now right or wrong, Apple forced Amazon to sell books at cost, yes you paid more, but it also allowed for more players in the market. There is a reason a lot of books are not ebooks, they don't want Amazon selling them for a loss.
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Amazon sell "some" ebooks at a loss. Not all ebooks.

It's called a loss leader.

From the DOJ

"When Amazon launched its Kindle device, it offered newly released and bestselling e-books to consumers for $9.99. At that time, Publisher Defendants routinely wholesaled those e-books for about that same price, which typically was less than the wholesale price of the hardcover versions of the same titles, reflecting publisher cost savings associated with the electronic format. From the time of its launch, Amazon's e-book distribution business has been consistently profitable, even when substantially discounting some newly released and bestselling titles."
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If Amazon got 100% market share of ebook TODAY and it decides to raise the price TODAY, a guy in his garage can undercut Amazon on prices. There is very low entry level.

Amazon buy ebook for $10 and sell for $15.
Guy in his garage buy ebook for $10 and sell for $12.

If a guy in his garage can do it, so can Google, Apple, Samsung, Kobo, Nook, Sony etc..
 
So Apple is a convicted price-fixer, just like Microsoft is a convicted monopolist. Anyone have a problem with that?
 
EbookReader said:
WRONG.

According to the DOJ, Amazon has been overall profitable from the beginning in selling ebooks.
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Anyone can say anything but that doesnt make it so. Selling books below cost of you paid is not profitable. Amazon assumes books are a loss leader for people to buy other items on their site. So while Amazon may be profitable ebooks sold at a loss are not.
 
yojo056 said:
Really? I thought that case was starting to really slide Apples way...
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I thought, from the judges pre trial comments, the case was already decided against them.

So I'm glad they are appealing and I hope they demand a jury trial, might help them to avoid this kind of pre judgment issue.

And I rather hope they or someone sues Amazon over the exclusive contracts over books, videos etc. demanding that, for example, Netflix yank Downton Abbey from streaming so it can be a Prime Exclusive, is as anti consumer as raising a book price two dollars. Especially to those consumers that loathe Amazon
 
A big LOL to the people defending Apple that don't quite understand why what they did was so wrong.

Having been in sales myself, we are repeatedly warned against communication with our competitors and clients that could even possibly be construed as conspiring.

Long story short, you cannot conspire to break anti-trust rules just to force your way into a market. Amazon's predominance was not a monopoly. They were the #1 ebook seller because they did it the best....just like Apple was the best smartphone manufacturer once upon a time.

A lot of people saw this ruling coming. 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.

Apple will just have to work its way into new markets under their own power (like they are doing with cloud services and mapping).
 
How can you even determine if an eBook is sold at a loss? There is no "bill of materials" like with a phone to determine per-unit cost. The best you can do is see if the entire Amazon e-Book division is operating at a profit/loss.
 
pmz said:
So what if Apple is levied a fine for, say, $20,000,0000. That would EXORBITANT, and yet would have no effect on anything. Apple would argue it down, cut a check, and everyone would move on.
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With perhaps tons of books now Amazon exclusives at what price Amazon might charge because of the court taking actions that nix contracts etc. sorting out that mess could take months
 
There is a difference they offer CHEAP PRICES fairly.
They don't go around telling companies they are the ONLY one that will get the cheap price and other companies must pay FULL prices.
Unfair Business practice can't be allowed.
Otherwise we would all be running IBM machines running Microsoft products only and they would of just paid everyone off and dominated the market (remember them having to break up the company?). There would also be no small business and none of you "PRO's" working out of your basement.



appleisking said:
Except there won't be any competition at that point, once Amazon is able to run everyone out of business. That's what usually happens. You undercharge and run everyone out of business, once there's no one to remain competitive over, you exponentially raise the prices and the consumer is screwed since there's no where else to go. That's the natural cycle of the market.
Click to expand...
 
Saturn1217 said:
I was an avid Kindle user at the time that Apple introduced iBooks and their purchasing model and I remember quite clearly the outrage it caused me and many others on Amazon's discussion boards that all of a sudden ebook prices almost uniformly were hiked
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And Amazon, which had pricing control, could have done that on their own at any time. And now basically can again.
 
It's only too bad Apple will get off with a meager fine, probably $50 million. Hit 'em where it hurts. Fine 'em $10 billion.
 
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