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Apple Ordered to Stagger E-Book Contract Negotiations, Refrain From 'Most Favored Nation' Clauses

MFN was a positive as it kept prices down and kept Amazon (in particular) from using books as a loss leader to sell Kindle because at least Apple could match their prices.

Again we have power-hungry politicians wanting to control everyone else and decreasing competition as a result.
 
Rafagon said:
DOJ sure seems to have a lot of free time on their hands... worrying about ebook sales and pricing...
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I know. When you consider the tons of other significantly worse behavior that goes on in American corporations completely unchecked, its actually pretty pathetic they go full-blast on a stupid little e-book case but don't give that same treatment to the scum oligopolists like big oil companies, or the telephone carriers who almost certainly engage in price fixing as well AND have an oligopoly. However, allow publishers to raise ebook prices 3 dollars, and you'll get swarmed by Uncle Sam.

America the Beautiful.
 
GadgetDon said:
We don't know what the DoJ was demanding to settle. Based on their requests for what to be included, it's a fair assumption that they wanted to put limits on all of Apple's digital stores. Remember, while the verdict went in favor of the DoJ, they got almost none of what they were asking in the injunction.



If there are future stores, say turning iTunes University into real online education system with digital classes, they may want to do MFN + Agency.

And the Agency agreements stand. It's only MFN that the judge struck down.
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Right, we don't know what the DoJ was offering as a settlement, but we can assume safely I think that the DoJ's hand was strengthened by their courtroom victory

Agency may stand in theory, but it was my understanding that the publishers all backed out of that arrangement in their settlements.
 
GadgetDon said:
And the Agency agreements stand. It's only MFN that the judge struck down.
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Didn't the publishers broke the contracts when they settled? Doesn't the "The judge also required Apple to sever any agreements with the top five book publishers that restrict retail ebook prices in any way" clause forbid agency model because agency model restricts retail price?

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mbarriault said:
That Verge quote confirms my suspicion, so I think you meant to say "Yes".
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No, The Verge quote doesn't confirm your suspicion, it confirms that Apple can make contracts with all the publishers
 
IJ Reilly said:
Right, we don't know what the DoJ was offering as a settlement, but we can assume safely I think that the DoJ's hand was strengthened by their courtroom victory

Agency may stand in theory, but it was my understanding that the publishers all backed out of that arrangement in their settlements.
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All books in the iBooks store are still sold under the agency model, the publishers can log into Apple's site and set the price they want to sell the books at.

And as for the DoJ's hand being strengthened - the DoJ asked the judge for a lot of control over Apple's other digital stores. The judge turned them down, and specifically said the injunction was to "rest as lightly as possible on how Apple runs its business". That's not what the DoJ wanted, which doesn't represent a strengthening of their hand.
 
Thunderhawks said:
Government is overreaching here, by telling a corporation what they can and cannot do.

If the law is clear, Apple has to abide by it and if they don't they should get fined every time they break it until they do.

Anything else is not the DOJ's or a judges business.
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I wouldn't say it's overreaching - it is quite appropriate, but only after the judge made a completely wrong decision. There was no evidence that the publishers colluded, and there was even less evidence that Apple colluded with the publishers.

The result is that Amazon's eBook monopoly is strengthened.
 
Oletros said:
No, The Verge quote doesn't confirm your suspicion, it confirms that Apple can make contracts with all the publishers
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Apple can make contracts but it looks like not immediately (based on reading the judgement). They also have to space out any contracts 6 months apart which means they will not have a contract with some publishers for some time. Since they voided the current contracts, the question still remains. How can Apple sell the ebooks from the major publishers when they don't have a contract and might not for some time ?
 
Plutonius said:
Apple can make contracts but it looks like not immediately (based on reading the judgement). They also have to space out any contracts 6 months apart which means they will not have a contract with some publishers for some time. Since they voided the current contracts, the question still remains. How can Apple sell the ebooks from the major publishers when they don't have a contract ?
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No, they can make contracts, what they can't make is put clauses like MFN o agency model

"Nothing in this [order]," Cote wrote, "prohibits Apple from entering into or maintaining an agreement with an ebook publisher merely specifying prices that Apple must pay for the ebook publisher's ebooks.
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GadgetDon said:
All books in the iBooks store are still sold under the agency model, the publishers can log into Apple's site and set the price they want to sell the books at.

And as for the DoJ's hand being strengthened - the DoJ asked the judge for a lot of control over Apple's other digital stores. The judge turned them down, and specifically said the injunction was to "rest as lightly as possible on how Apple runs its business". That's not what the DoJ wanted, which doesn't represent a strengthening of their hand.
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My understanding is the publishers agreed with the government to forego the agency model for two years. They objected to the DoJ's settlement proposal because it extended this prohibition for three additional years.

The strengthening of the DoJ's hand can be seen in their proposed settlement. That the judge didn't go along with the DoJ's plan doesn't reflect on whether they asked for more after winning at trial than they'd offered to Apple before winning at trial. I think it's pretty certain that they did try to get more after winning, if only because they now had adjudicated findings on which to base their proposed penalties.
 
centauratlas said:
MFN was a positive as it kept prices down and kept Amazon (in particular) from using books as a loss leader to sell Kindle because at least Apple could match their prices.
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MFN + Agency had the effect of increasing consumer prices, not to keep them down. Amazon makes no profit on Kindle sales, the profit comes from the content sales and ads (ebooks sales included).
 
centauratlas said:
MFN was a positive as it kept prices down and kept Amazon (in particular) from using books as a loss leader to sell Kindle because at least Apple could match their prices.
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Positive for Apple maybe, because they...

centauratlas said:
Again we have power-hungry politicians wanting to control everyone else and decreasing competition as a result.
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...could never compete with Amazon in a competitive marketplace
 
DipDog3 said:
Actually these punishments are not too bad. I think Apple should just accept these and move on.
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I agree. The only reason for an appeal is to undo any damage to the Apple brand. The penalties being imposed are pretty minor. In the end, I think Apple will end up with better eBook pricing than Amazon because Apple can use eBooks as a loss-leader or simply sell them at cost.
 
Thunderhawks said:
Government is overreaching here, by telling a corporation what they can and cannot do.

If the law is clear, Apple has to abide by it and if they don't they should get fined every time they break it until they do.

Anything else is not the DOJ's or a judges business.
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Apple is operating in the US economy- so yes, the Feds have a say on what they can and can't do - Just like how Apple has random say on my App in the app store.

Also it was not just the DOJ... the EU and individual US states also went after Apple for the same thing.
 
So much for Amazon having any competition in the near future. I wonder when Apple will announce, they are no longer in the book industry. I thought, government sponsored monopolies were illegal in the United States.

(It makes you wonder, what did Amazon give the NSA to get this judgement?)
 
Thunderhawks said:
Government is overreaching here, by telling a corporation what they can and cannot do.

If the law is clear, Apple has to abide by it and if they don't they should get fined every time they break it until they do.

Anything else is not the DOJ's or a judges business.
Click to expand...


If anything we need more corporate control by the government, especially in the US.
 
BC2009 said:
I agree. The only reason for an appeal is to undo any damage to the Apple brand. The penalties being imposed are pretty minor. In the end, I think Apple will end up with better eBook pricing than Amazon because Apple can use eBooks as a loss-leader or simply sell them at cost.
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Why would Apple want to use iBooks as a loss-leader? To get people to buy iPads? Doesn't make sense. No, Apple has always intended for iBooks to be a money maker. That's why this case is so interesting, because it appears to protect a monopoly like Amazon in the eBooks business, and prevent others from entering the market.
 
I think this is a decent result, people don't buy iBooks because they're cheaper than eBooks, its because they are better on the iBooks platform.

Now I would ban any other book reader from iOS. Specifically Amazon B & N and indeed anyone else

People can always purchase their readers

win win
 
giantfan1224 said:
Why would Apple want to use iBooks as a loss-leader? To get people to buy iPads? Doesn't make sense. No, Apple has always intended for iBooks to be a money maker. That's why this case is so interesting, because it appears to protect a monopoly like Amazon in the eBooks business, and prevent others from entering the market.
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Apple and other competitors are not prevented from entering, they are prevented from doing so with illegal practices. There is no reason Apple cannot compete with Amazon excluding their own unwillingness to operate on thin margins.
 
I'm sure Amazon was hoping for better than this!

This sounds like a pretty fair and direct response to the two worrying issues: the timing (dealing with all the publishers around the same time) and the MFN.

Now there's nothing illegal about MFNs, and nothing illegal about dealing with multiple companies at the same time in the same way... that's only natural (why wouldn't you?)... but all together it crossed a line. A line Amazon did not want crossed :) (I can see why Apple disagrees--their actions made total sense at the time.)

I'm not sure why so many people see "Amazon = cheap stuff = always good in the long run" and can't see any further subtleties to the situation. Is devaluing of authors' work good? Does that bring us more and better ebooks? Is an Amazon monopoly good? Will Amazon skate by on low profits forever, or will they turn on the money hose one day? Is "race to the bottom" pricing always good? Is selling at a loss (sometimes known as "dumping") always good? Is letting Amazon control book pricing instead of the creators OF books doing so necessarily the best thing?
 
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