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If the U.S. or a state government decided to regulate and fix book prices, that arrangement would not be challenged by the DOJ or FTC. Anticompetitive conduct is protected in the U.S. as well if its done under active government supervision. German-style book pricing would not raise concerns here.

I do a fair amount of work with the EC. While the EC at one point had more of a dual mandate (of attempting to protect competitors as well as consumers), they have embraced U.S. style consumer welfare standards instead recently as well.
 
Fair enough. I think the evidence was pretty unambiguous, and so did the DOJ, the Southern District, and two of three judges on the Second Circuit, but I suppose reasonable minds can differ.

Fair enough. If the evidence was "unambiguous" why do you think the DOJ only pursued civil charges instead of criminal charges?

I don't know what that means. Neither does anyone else for that matter. That's why the Supreme Court adopted the current "consumer welfare" approach - there was a general realization that "competition" could mean anything. To make it concrete however - the things you mentioned are broadly legal.

I think you are being flippant here. The FTC website refers frequently to maintaining a free and open market
and promoting vigorous competition in order to benefit consumer welfare.

Selling below cost is legal. Selling below cost, AND then raising prices can be illegal. That's what makes something predatory pricing. This is extremely rare however (as the FTC points out).

Your competitor can sell below cost, run you out of business, and until they raise prices above market levels, nothing illegal has happened.

:D So when Amazon sold an eBook below cost while it was new or a bestseller and then raised the cost above market levels that doesn't count because... the DOJ chose to look at eBooks as a commodity market when it's not. I also think that the Areda-Turner test, while too stringent for even classic predatory pricing schemes, does not even anticipate a business strategy like Amazon's!

And, again, I'm not saying that Amazon's pricing is illegal on it's face. I think it should be looked at in combination with the other factors - monopsony power and vendor lock in.

Antitrust laws don't protect consumer welfare at the expense of "competition", but they do often protect consumers at the expense of competitors. As I noted above (as as the Wright article I linked earlier discusses, "competition" is a very broad term that can mean anything, which is why courts have narrowed the inquiry onto consumer welfare.

I think we agree here for the most part. I just see a distinction between consumer welfare and promoting competition to benefit consumer welfare.

This really isn't that complicated. From the perspective of antitrust law (and mainstream economics), "efficient" pricing is whatever is reached by competitors without agreement between each other. This means pricing can go so low as to run all but one competitor out of business, and that's fine if it's done in response to consumer demand.

The DOJ and FTC don't get involved in setting or regulating prices (with limited exceptions). They're not trying to enforce low prices. They're trying to enforce market prices - i.e., prices reached by sellers acting independently. If the publishers had independently moved to the agency model, then there would be no issue. It's the fact that they had an agreement to do it that caused the issue. This really isn't that tough a burden. Don't agree on business models or price with you competitors, and don't facilitate such agreements.

I think you are agreeing with me here. The goal is efficient pricing as determined be a free and open market. Not simply lower costs to consumers.
 
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The simple difference (for those bringing up Amazon) is that Amazon did not collude with publishers regarding pricing. End of story there. People can accuse Amazon of other things all they want - but they have not been found guilty. Apple has. This puts it to rest.
 
The simple difference (for those bringing up Amazon) is that Amazon did not collude with publishers regarding pricing. End of story there. People can accuse Amazon of other things all they want - but they have not been found guilty. Apple has. This puts it to rest.

Considering they had more than twice the market share of those publishers, I think the story is very much alive.
 
I read the entire orders from the SCOTUS rulings on ACA and same-sex marriage. The dissents are quite interesting since they state in clear and convincing terms the Majority did not follow the law and procedure when arriving at those rulings. I agree. That casts a shadow on federal courts generally, and this ruling is no different. However I have no idea what recourse is possible.

Rocketman
 
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Fair enough. If the evidence was "unambiguous" why do you think the DOJ only pursued civil charges instead of criminal charges?
Because there's basically no upside to bringing a criminal complaint, given they'd just be seeking to impose a fine regardless.

I think you are being flippant here. The FTC website refers frequently to maintaining a free and open market
and promoting vigorous competition in order to benefit consumer welfare.
I'm sorry if that's how it comes off, but that's really not my intent. This is a fairly important point in the history of the development of antitrust law. Promoting "competition" is a very vague concept, and led to a lot of contradictory decisions in the 60s. That's why the Court adopted the present consumer welfare standard. One of the elements of this standard is that we don't try to ensure the survival of competitors for competitor's sake. It needs to be tied to consumer welfare.

:D So when Amazon sold an eBook below cost while it was new or a bestseller and then raised the cost above market levels that doesn't count because... the DOJ chose to look at eBooks as a commodity market when it's not. I also think that the Areda-Turner test, while too stringent for even classic predatory pricing schemes, does not even anticipate a business strategy like Amazon's!
I'm unfamiliar with the bolded here (I do mostly health care work). Is this a reference to a particular incident? Can you give more details?

I think you are agreeing with me here. The goal is efficient pricing as determined be a free and open market. Not simply lower costs to consumers.
Okay, so do you see that Apple helping facilitate an agreement between the publishers poses issues? The crux here is an agreement.
 
I actually read the ruling. I was previously baffled how Apple could have been found guilty. After all, the agency model is simple, the publisher sets the price, not Apple. Apple only get's a commission. And even MFN is standard in many contracts, so that alone was not enough. The problem was that Apple insisted that the publishers had to convert all other ebook sellers to the Agency model and at the last minute changed the wording to MFN with the same intent. It's unfortunate, but they were loose in the negotiations and that's where they got in trouble. The agency model by itself is fine, as it is in the App Store. MFN on its own is fine, but when it was placed in there to specifically force the transition of the competition to the agency model, that was not so fine.

I do think the court is overreaching with bromwich, as the fine would have been enough and maybe nullifying the contracts and forcing them to renegotiate without a MFN clause. The rest seem cruel and unusual IMO.
 
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Don't see how any consumer can defend apple and all these massive corporations. They conspired to raise the prises of books and make the price unified therefore no competition in terms of prices. They did this for themselves and not the consumer because they decided to break into the E-book market and instead of using innovation to set themselves apart from the competition, they used back door methods. They are doing this with apple music and the exclusive deals with certain artists. This is not good for the consumer. But keep defending apple fan boys....
 
How does Amazon get away with it then? They sell and sold books at under he market value short changing the authors.

They didn't short change authors at all. They paid the price that the authors/[publishers asked for, then sold to consumers as a loss-leader. It's what a Supermarket does when they do a 2-for-1 offer on groceries. If anything, what you describe is what Apple wanted to do for the 3 month free trial for their new Music service, short-changing recording artists by giving away (streaming) their music without recompense.

Considering they had more than twice the market share of those publishers, I think the story is very much alive.

Complete straw-man there. The issue was of collision between Apple and the publishers. Amazon's market share has nothing to do with this.

Don't see how any consumer can defend apple and all these massive corporations. They conspired to raise the prices of books and make the price unified therefore no competition in terms of prices. They did this for themselves and not the consumer because they decided to break into the E-book market and instead of using innovation to set themselves apart from the competition, they used back door methods. They are doing this with apple music and the exclusive deals with certain artists. This is not good for the consumer. But keep defending apple fan boys....

Well said
 
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I was referring to the Apple collusion charges and that story. It's done. They were found guilty.

No, they were found liable. And it's not necessarily done unless they decide not to appeal.

Because there's basically no upside to bringing a criminal complaint, given they'd just be seeking to impose a fine regardless.

:confused:The large majority of antitrust cases are criminal and mainly impose a fine regardless.

I'm sorry if that's how it comes off, but that's really not my intent. This is a fairly important point in the history of the development of antitrust law. Promoting "competition" is a very vague concept, and led to a lot of contradictory decisions in the 60s. That's why the Court adopted the present consumer welfare standard. One of the elements of this standard is that we don't try to ensure the survival of competitors for competitor's sake. It needs to be tied to consumer welfare.

Again, you keep saying competitors when I say competition. I think we actually mainly agree here.

I'm unfamiliar with the bolded here (I do mostly health care work). Is this a reference to a particular incident? Can you give more details?

It's Amazon's whole business plan for eBooks. They sell most new and bestselling eBooks at a loss and then raise prices after a certain period of time.

Okay, so do you see that Apple helping facilitate an agreement between the publishers poses issues? The crux here is an agreement.

I disagree your classification of the agreement as being between publishers. I see it as being a negotiation with multiple suppliers at the same time under a tight deadline. Which Cote confirmed was as legal.

Complete straw-man there. The issue was of collision between Apple and the publishers. Amazon's market share has nothing to do with this.

I disagree. Amazon's market power vs the market power of the five publishers is certainly an issue to me. Again, the DOJ approved the "collusion" of two publishers with slightly less market share that the five publishers when it approved the merger of Penguin and Random House.
 
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Ironic that a supposed anti-trust ruling doesn't help the consumer. What Apple did with the publishers was an attempt to relax the grip that Amazon had on the e-book market to, in turn, increase competition.
 
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Ironic that a supposed anti-trust ruling doesn't help the consumer. What Apple did with the publishers was an attempt to relax the grip that Amazon had on the e-book market to, in turn, increase competition.

Didn't realize hiking up ebook prices led to increased competition.
 
An attempt to bring other providers into the marketplace that could not compete otherwise because of the predatory pricing tactics of Amazon.
There were no other providers and there was not any predatory pricing. If you think there was then it el be easy to provide proof of that.

By the way, how it is forcing the price in all the stores improving competition?
 
There were no other providers and there was not any predatory pricing. If you think there was then it el be easy to provide proof of that.

By the way, how it is forcing the price in all the stores improving competition?

Again, agency pricing is not illegal. Pricing competition simply move from the retailers to the publishers. Instead of one company setting the price for 90% of the market. In fact, the argument could be made that Amazon was the on that wasn't allowing competition based on price, since almost all new releases and best sellers were the same price.

And then there is the fact that retail pricing isn't the only component of competition. 90% of the market being locked in to a proprietary platform is also harmful.
 
There were no other providers and there was not any predatory pricing. If you think there was then it el be easy to provide proof of that.

Predatory pricing is easy to prove? All a company has to do is call it loss leading tactics and purport it to be legitimate. With predatory pricing you have to prove the intent is to corner the market and then jack up prices.

By the way, how it is forcing the price in all the stores improving competition?

Because, in this case, it allows more providers to get in the game. Apple couldn't get in the game because there wasn't money to be made because of Amazon's tactics. With more providers then the free market could operate.
 
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apple.jpg
 
I feel like the justice department could have used a little more prosecutorial discretion here. I don't get the impression that the intent was to raise consumer costs above a fair level from any of the parties involved, nor does it seem they were trying to gain on Amazon so much as balance the field (the MFN clause).

Amazon selling eBooks at or below cost is, at best, only of short term consumer benefit. If Amazon goes on to hold 80%-90% of the market, does anyone think they won't then use that to squeeze publishers, price jab consumers or both? How is fair market value determined when they are the market?

Ignoring Apple for the moment, what could any new eBook seller do at this point to enter into the market and compete without a huge slush fund to operate at a loss? If the answer is not much/nothing then at the very least this investigation should be followed with a separate investigation of Amazon.
 
Predatory pricing is easy to prove? All a company has to do is call it loss leading tactics and purport it to be legitimate. With predatory pricing you have to prove the intent is to corner the market and then jack up prices.



Because, in this case, it allows more providers to get in the game. Apple couldn't get in the game because there wasn't money to be made because of Amazon's tactics. With more providers then the free market could operate.

Amazon ebook division was profitable so yes, there was money to he made.

Still waiting what Amazon tactics abs what predatory pricing.

Abd I repeat, what more providers?
 
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