Google Executive's Testimony Weakens Justice Department's Case Against Apple in E-Book Price Fixing Trial

[tongxinshe]

Nope. Government taking steps to protect the consumer from the collusion of big business to fix prices rather than to compete. That's a proper function of government, which is better equipped than an individual to do this.

The system is not the problem, the real problem in the US nowadays is that the system is fully controlled by the powerful few.

In this specific aspect, there are a lot of other real cases worth their attention if the real intention is to protect regular people or consumers, not like in this case the only one being protected is the existing monopoly.

 

[Smoothie]

I was going to post a witty reply but then realized you're from California where the government is expected to do everything for the people. Soylent Green, anyone?

In the absence of government intervention, I wish you lots of luck in any individual quest to drink clean water, breathe clean air, drive in safe cars, fly in safe airplanes, ingest safe medicine and eat uncontaminated food. I'm sure it will be a fair fight against Big Oil, Big Pharma, Big Agra, etc.

 

[petsounds]

Apple needs to subpoena this guy for the patent lawsuits. I don't know for what, but I'm sure it can't hurt.

 

[tongxinshe]

Bottom line is the most favored nations clause is price fixing in and of it's self and no one denies that clause was there, so why this long lengthy trial?

Yes, it sounds like there may have been even more price fixing beyond that, but there was clear price fixing to begin with.

The clause would be like Walmart going to a company and saying, we will carry your product, but you can't let anyone else sell it for less money than we are.

No, the difference in your example and this ebook case is, in your case the price is set by Walmart, while in this ebook case the prices are set by the publishers. That's a critical difference.

In your example Walmart can freely raise the price and the company who offers the product will then need to make sure the same product is sold at the same higher price at all other places.

In this ebook case, Apple has no rights to raise prices at all, instead it only has the rights to cut the price, when the publisher set a book's iBookstore price higher than other places and the publisher cannot persuade other places to match the same higher price. In another words, Apple is essentially making a price-matching promise to its customers, while shifting the financial risk to the publishers at the same time.

 

[Kid Vorpal]

Suits was awesome. What happened to it?

New season starts next week, I believe. Love that show.

 

[MikBe]

And then the DOJ asked every executive on the face of the planet if lawyers are required to OK, if not actually write, every letter of important documents due to everyone suing everyone.

 

[genovelle]

Nope. Government taking steps to protect the consumer from the collusion of big business to fix prices rather than to compete. That's a proper function of government, which is better equipped than an individual to do this.

New industries don't form in a vacuum. ebooks had devolved into a one player market where the publishers were being undercut on their own product making it impossible for them to build wide distribution. Would you open a ebook store if Amazon's price is lower than what the publishers wholesale the books to you for? There was something illegal going on, it was the Monopolistic practices of Amazon. The publishers were compelled to go with Amazon originally be cause the were their largest seller of books, Google was already trying to use their works without paying by scanning books and putting them online. The other problem was bootlegs. They trusted Amazon but did not foresee them preventing the market from expanding while undermining their core business. Everyone in this country seems to only want something for nothing, but this is a business and they deserve to make whatever the market will bare.

 

[Renzatic]

In this specific aspect, there are a lot of other real cases worth their attention if the real intention is to protect regular people or consumers, not like in this case the only one being protected is the existing monopoly.

Amazon controls upwards of 60% of the book market. That's a majority, not a monopoly.

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Snip

And you obviously don't know what's going on. Read the other thread on the subject and educate yourself.

 

[Oletros]

There was something illegal going on, it was the Monopolistic practices of Amazon.

DoJ investigation contradict your claim

Google was already trying to use their works without paying by scanning books and putting them online.

Please, before writing such wrong claims it is better to read about what you want to talk, you won't look like you don't know nothing about it

 

[zin]

You call the practice of protecting a monopoly "trying to protect the consumer"? What a man so easy to be manipulated by believing everything said on words by the government.

Protecting a monopoly? Forgive me, I was under the impression that the government filed suit because of the kind of anti competitive behaviour that is found in monopolies.

 

[marksman]

Turvel: Are we clear that I work for Google?

Sandoval: Crystal.

...,

Sandoval: Mr. Turvel, Did Apple order the book read?

Judge: You don't have to answer that question!

Turvel: I'll answer the question. You want answers?

Sandoval: I think I'm entitled!

Turvel: You want answers!?

Sandoval: I want the truth!

Turvel: You can't handle the truth! Son, we live in a world that has walled gardens and those walled gardens are guarded by executives with impunity. Whose going to do it? You? You Mr. Sandoval? Apple has a greater responsibility than you can possibly fathom. People weep for Amazon and curse Apple. They have that luxury. They have the luxury of not knowing what i know, that Apple changing book pricing, while short term tragic, probably saved the e-book industry. And Apple's existence while grotesque and incomprehensible to some. Saved e-books. You don't want the truth because deep down in places you do not want to talk about at parties, you want Apple in the ebook business, You need Apple iin the ebook business. We use words like agency model , conspiracy , and Amazon Monopoly. Apple uses these words as the backbone of superior services they continue to offer. The court users them as a punch line. I have neither the time nor inclination to explain myself to a court who rises and sleeps under the blanket of technological excellence Apple provides, and then questions the manner in which Apple provides it. I would rather the DOJ and the Judge just say "thank you" to Apple , and be on their way. Otherwise I suggest all the lawyers and judges here start creating revolutionary technology and make a difference. Either way I don't give a damn what the DOJ thinks people are entitled to.

Sandoval: Did Apple order the book read?

Turvel: Apple did the job--

Sandoval: Did Apple order the book read?!

Turvel: YOU ARE GODDAMN RIGHT THEY DID!

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Protecting a monopoly? Forgive me, I was under the impression that the government filed suit because of the kind of anti competitive behaviour that is found in monopolies.

Amazon was a monopoly and also was using anti competitive behavior to keep out competition.

Amazon had 90% of the ebook market and was selling ebooks below cost to keep out the competition. Amazons behavior was much more egregious than Apple's. in fact without Apple leveraging the agency model amazon would have maintained their monopoly. By the way amazon never intended to sell books below cost forever.

 

[Oletros]

Amazon was a monopoly and also was using anti competitive behavior to keep out competition.

Amazon had 90% of the ebook market and was selling ebooks below cost to keep out the competition. Amazons behavior was much more egregious than Apple's. in fact without Apple leveraging the agency model amazon would have maintained their monopoly. By the way amazon never intended to sell books below cost forever.

Do you have any source to that anti competitive behavior? Because DoJ findings don't support your claim.

I suspect that you're not saying that Amazon sold all the ebooks below cost, do you?

 

[marksman]

Yeah, I am sure nobody takes the advice of their lawyer when embroilled in legal matters of this magnitude. Hardly a Eureka moment...

Also, I cannot remember the exact details of matters I discussed last week at work, let alone something that happened years ago.



Yeah, so they are not guilty of price fixing then, [even though Steve Jobs sent emails and had it published in his biography], case closed move along nothing to see here...

Yeah that is not evidence of price fixing. Apple is allowed to negotiate terms with individual publishers. The charges are apple facilitated a conspiracy between publishers. Apple negotiating similar terms among like suppliers is what all retailers of any size do every day.

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Yeah, trying to protect the consumer is pretty stupid, I agree.

Trying to protect amazons illegal ebook monopoly is pretty stupid though

 

[Renzatic]

Do you have any source to that anti competitive behavior? Because DoJ findings don't support your claim.

I suspect that you're not saying that Amazon sold all the ebooks below cost, do you?

I don't get this whole "Amazon is a monopoly" thing. It's like they're failing to understand what a monopoly actually is, and parrot it out simply because they don't know any better.

A company with 60% marketshare going up against stiff competition is not a monopoly. They're not the sole company in a market. They don't have direct control anything, let alone the books market.

 

[Oletros]

Trying to protect amazons illegal ebook monopoly is pretty stupid though

What illegal ebook monopoly?

 

[marksman]

Bottom line is the most favored nations clause is price fixing in and of it's self and no one denies that clause was there, so why this long lengthy trial?

Yes, it sounds like there may have been even more price fixing beyond that, but there was clear price fixing to begin with.

.

Most favored nation clause is not price fixing. As a retailer I have the right and ability to negotiate that I always have the lowest cost on your products. That is not illegal. None of these things are illegal on their own. The government has to prove apple facilitated a conspiracy between publishers. None of apples specific negotiation tactics are illegal on their own.

 

[Renzatic]

Most favored nation clause is not price fixing. As a retailer I have the right and ability to negotiate that I always have the lowest cost on your products. That is not illegal. None of these things are illegal on their own. The government has to prove apple facilitated a conspiracy between publishers. None of apples specific negotiation tactics are illegal on their own.

The most favored nation clause is only peripherally related to this case. The question is if Apple played a direct part in the alleged collusion to fix prices using the agency model, or if they were simply willing to take advantage of it, which would allow them to be put on even footing with Amazon.

 

[marksman]

Amazon controls upwards of 60% of the book market. That's a majority, not a monopoly.

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And you obviously don't know what's going on. Read the other thread on the subject and educate yourself.

Amazon had over 90% of the ebook market before apple got involved. Not only did the have almost the entire market, they were selling books below cost thus making it almost impossible for anyone else to get involved. The publishers did not like it and the only way to break amazons monopoly and anti competitive hold on ebooks was to get creative.

The publishers were more than happy to jump in with apple and an agency model because it would reduce amazons control and stop them from underpricing their products.

It is clear most people do not understand what was going on in the ebook marketplace before apple was significantly much worse for consumers in the long term. People are so short sighted they we were willing to cede total control of all ebooks to amazon in exchange for a handful of $9.95 books.

 

[Oletros]

The publishers did not like it and the only way to break amazons monopoly and anti competitive hold on ebooks was to get creative.

Second time, what anti competitive hold?

 

[MacDav]

Where are physical copies cheaper? I don't think I've ever seen that

You know...After the book has been out of print for a few years and you pick up a paperback copy at a garage sale.

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Yeah, I am sure nobody takes the advice of their lawyer when embroilled in legal matters of this magnitude. Hardly a Eureka moment...

Also, I cannot remember the exact details of matters I discussed last week at work, let alone something that happened years ago.



Yeah, so they are not guilty of price fixing then, [even though Steve Jobs sent emails and had it published in his biography], case closed move along nothing to see here...

Wow, Steve Jobs admitted to price fixing in his biography? Did not know that.

 

[Renzatic]

Amazon had over 90% of the ebook market before apple got involved. Not only did the have almost the entire market, they were selling books below cost thus making it almost impossible for anyone else to get involved. The publishers did not like it and the only way to break amazons monopoly and anti competitive hold on ebooks was to get creative.

No. They were only selling bestsellers below cost, and making the difference by marking up other ebooks in the store. It's a loss leader setup, and is just as legal as a most favored nation clause.

As a retailer, you're allowed to price your products any way you see fit. If you want to mark some books lower than the competition, that's fine, so long as you don't undercut by extreme amounts, and still turn a profit at the end of the day. Amazon lost no money on their ebook business.

The publishers were more than happy to jump in with apple and an agency model because it would reduce amazons control and stop them from underpricing their products.

Assuming you're correct, and the agency model was, in fact, an attempt to break a monopoly, one judge's quote would be quite apt here...that it's not okay to attempt curtailing one monopoly by colluding to create another.

In simplistic terms, two wrongs don't make a right. If Amazon was using it's market power to illegally undercut the competition using predatory pricing tactics, the publishers coming together to create an equally monopolistic book cartel was equally as illegal.

It is clear most people do not understand what was going on in the ebook marketplace before apple was significantly much worse for consumers in the long term. People are so short sighted they we were willing to cede total control of all ebooks to amazon in exchange for a handful of $9.95 books.

At the end of the day, the one thing that could be said is that everyone involved, from the publishers, to the retailers, to the readers, have been paying more for their products and making less selling them since the introduction of the agency model. Amazon still has the largest stake in the ebook market, Apple has only a slight foothold, and profits are down overall. The whole ordeal netted no winners, only losers.

 

[TMay]

I don't get this whole "Amazon is a monopoly" thing. It's like they're failing to understand what a monopoly actually is, and parrot it out simply because they don't know any better.

A company with 60% marketshare going up against stiff competition is not a monopoly. They're not the sole company in a market. They don't have direct control anything, let alone the books market.

At the time that Apple signed contracts Amazon was at 70%-80% of the market, though some say it was 90%. YMMV but that is the case.

Either way, since Apple established its iBook presence, there are more competitors and Amazon is still at around 60% if I am not mistaken. Prices rose, and have come down steadily. Buyers of the latest best sellers pay more than they did pre-Apple, but the publishers have the power to reprice to meet market demands over time, which they do. Wait and save money.

Hardly the ripoff of consumers portrayed, and ultimately a better way to keep original and creative writing coming to the consumer. Certainly no different than pricing models Amazon uses for print media such as magazines.

I see companies competing at a very high level. Perhaps the DOJ jumped the gun?

 

[marksman]

Do you have any source to that anti competitive behavior? Because DoJ findings don't support your claim.

I suspect that you're not saying that Amazon sold all the ebooks below cost, do you?

Holding a 90% marketshare and selling products below cost is pretty much the definition of anti competitive behavior/. That the DOJ did not do anything about it does not change that. That the doj would go after a company who actually busted Amazons stranglehold on ebooks instead is silly and laughable.

The reason nothing happened to amazon is because consumers were easily pacified with below cost books in the short term while amazon built up its kindle business and waited on the ebook business to be big enough for them to drain all the money out of it.

You should probably study up on this issue. You will find the model of cornering a market and selling below cost to be fairly common in anti trust and monopoly cases. What you will not find are many examples of wholesalers telling retailers what they can sell their products for. While that used to be illegal, the law was repealed a while back.

The impetus for all of this was consumers crying because their ebook prices went up. The fact that they were being long conned by Amazon did not matter. People were just me me me now now now. Since the DOJ was not doing their job and allowing Amazon unfettered and illegal control of the ebook market it required a company with hugevresources to even try and get in

What if you and your cousin tried to get into the ebook business with your 500k inheritance several years ago? You go to the book publishers and they say "sure you can resell our books. We will sell you each copy for $11.95". Now you go work on your business and decide you can sell the books for $14.95 to cover costs and profit. You get your website up and open for business. Only then you see amazon is selling all the same books for $9.95.

You go back to the publisher and ask them "what's up" and they tell you amazon gets a bulk discount and only pay $11.45 per copy. You shake your head and realize you are screwed as you can not sell books for 9.95 and stay in business.

But don't worry ten years down the road when everyone owns a kindle and amazon has cornered the market they will raise prices so you can try again!

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I don't get this whole "Amazon is a monopoly" thing. It's like they're failing to understand what a monopoly actually is, and parrot it out simply because they don't know any better.

A company with 60% marketshare going up against stiff competition is not a monopoly. They're not the sole company in a market. They don't have direct control anything, let alone the books market.

You are the one who does not understand.

Before apple got into ebooks amazon had 90+ % of the market and sold products below cost. I am confident and comfortable in believing I know a lot more about these issues than you do.

 

[Oletros]

Holding a 90% marketshare and selling products below cost is pretty much the definition of anti competitive behavior/

Ups, the problem is that they didn't sold below cost all the ebooks, the sold SOME ebooks below cost and the whole division was profitable.

As you are saying that most people don't understand what was going on I think you can enlighten us and you can show us at least a proof of that anti competitive behavior.

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I am confident and comfortable in believing I know a lot more about these issues than you do.

I am confident and comfortable in believing that you don't know much because Amazon was not selling below cost.

As you're accusing others of not understanding you will proof your accusations, don't you?

 

[Renzatic]

I see companies competing at a very high level. Perhaps the DOJ jumped the gun?

That's the thing. With the agency model in place, they're not actually competing. At least not on prices. Why would anyone choose Amazon over Apple, or Apple over Amazon? They're all priced exactly the same, don't have any big sales, self driven promotions, and only offer the barest of incentives to bring customers in to their stores over another. Ebook retailers were nothing more than middlemen portals to the publishers.

You know why I used iBooks over Kindle? Because I could shop directly from the app. I didn't have to hop into Safari, buy a book, hop into Kindle, download it from my cloud account to my iPad, then read it. It offered a more direct experience. Other than that, hell...they offer the same selection at the same prices. Why would I choose one over the other if not for convenience alone?

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You are the one who does not understand.

Before apple got into ebooks amazon had 90+ % of the market and sold products below cost. I am confident and comfortable in believing I know a lot more about these issues than you do.

The problem is, what you "know" is based more around an imaginary construct you've built in your head, and is contradictory to the reality of the situation. It's completely misrepresented, and fails to account for tons of facts that have been brought up regarding the case. Read my reply to you above, and respond to that.