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Justice Department Presents Opening Arguments Against Apple in E-Book Price Fixing Trial
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Predatory pricing is illegal.
http://en.wikipedia.org/wiki/Predatory_pricing
So, what do you think was illegal in those documents?
That's not true. Apple didn't fix margins nor did they fix prices.
Apple did not but that's what the original poster suggested as a good idea. Government is not suggesting Apple fixed the prices. Apple is charged with facilitating the fix which was done by publishers. Before Apple came into book business, for more than 100 years book publishers could not agree on going with agency model. Agency model materialized the same day iBooks was announced by Apple. This alone should be enough to convict Apple but government has a lot more evidence than that.
So, now AMAZON's greed, by selling books below cost, to lure customers to their site and presumably buy other stuff on which AMAZON makes up the difference, has been replaced by APPLE's greed, to help publishers jack up prices so that they, as well as the independent bookstores can make some money, and APPLE can get their 30% cut? I frankly don't know, who to root for.....can somebody enlighten me, please.
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Why? Agency pricing isn't illegal. The question is whether the publishers colluded. I have no idea if they did or didn't. If they all negotiated separately with Apple, then Apple did nothing wrong. Offering all the publishers the same deal isn't collusion.
This has nothing to do with Apple's case. Are you saying that Apple took it upon themselves to fix Amazon's wrongs? This does not make what they did any more legal. Besides, as you can find out by reading this very article that you referenced selling at low prices by itself does not constitute predatory pricing.
I never said it had anything to do with the case (though that argument can be made). You were the one that said it was legal. I was just refuting your statement.
They make a profit on some books and not others, my guess is it's likely about break even. They're making it up by selling Kindles and other items.
Regardless it isn't really relevant to this case. They could lose massive amounts of money selling E-books and it doesn't change the fact that Apple and the publishers were caught doing something illegal.
Do I think that Amazon is going to find themselves is hot water? Yes I do, and I do worry about their power in the market and on my local booksellers. Overall I think we agree and I'd love to see a solution but this wasn't it.
Agency model is not illegal. Agency model in this case was simply used as a mechanism to ensure Amazon could not break up the collusion between all major market players resulting in a significant price hike. I am confused why do you still argue with the obvious. Did not you read Steve Jobs biography. He himself admitted that Apple conspired with book publishers to get higher profit margins. Don't you believe him?
As opposed to the clauses in contracts stipulating that other retailers will be unable to negotiate deals with publishers that result in Apple not receiving the lowest wholesale price.
Let's be honest here, it's just one big company being a dick instead of another. It's just that these forums just happen to not exactly be impartial in this case.
Only one alternative
Apple could have, according to the DoJ, entered into the market if they charged what Amazon did, and just gave back the whole profit to the publishers.
I love Amazon, I do. But it's ridiculous that it's doing so well, because its profits are minuscule. Talk about exposes, how about something on the work standards in Amazon warehouses?
Predatory pricing as an art. And thanks to the taxpayers from all the states, who lost a bigger and bigger part of their budgets as Amazon got richer, driving moms and pops out of business.
Apple could have, according to the DoJ, entered into the market if they charged what Amazon did, and just gave back the whole profit to the publishers.
I love Amazon, I do. But it's ridiculous that it's doing so well, because its profits are minuscule. Talk about exposes, how about something on the work standards in Amazon warehouses?
Predatory pricing as an art. And thanks to the taxpayers from all the states, who lost a bigger and bigger part of their budgets as Amazon got richer, driving moms and pops out of business.
Now you are just making stuff up. Agency pricing moves pricing competition from retailers to the suppliers.
Not sure what you are getting at here. Apple was not paying any wholesale price.
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No. Predatory pricing is illegal.
Waste. Screw the Feds.
This must be Teat Party's definition of "waste". DOJ already got tens of millions of dollars from book publishers. Now they will get more from Apple. It's anything but waste. Besides, even if government did not get a penny for this it would still be totally justified to spend tax payers money because taxpayers will get this money back with nice interest now that the monopoly was broken and e-book prices dropped dramatically. It's just a nice illustration of why saying that all government spending is a waste is plain stupid. I bet citizens in some low tax rate countries (like Somalia) would be happy to have a government like ours.
Loss leading and thin margins are common in retail. They can create a race to the bottom but it's not an inescapable vacuum. In the computer hardware market just compare Apple to Dell. Dell started a race to the bottom (which created casualties like Compaq and IBM's home PC business) but Apple never joined. Dell has gone private in hopes to right-itself while Apple's computer sales are doing better than the industry as a whole.
Speaking of Apple... When the iTMS service launched Jobs said it was designed to operate at a loss leader or break even point. Why? Because Apple makes money selling hardware like iPods so they don't need big (if any) margins on selling music. Apple's pricing effectively blocked out all competing music services until Amazon came along because Amazon had diverse enough revenue streams that it could match, or beat, Apple's pricing.
If anyone crosses the line into predatory pricing there are laws against that.
Why would Apple deep discount it's hardware when hardware is what pays the bills? Apple will discount its software/services to get people to buy hardware and Amazon will discount its hardware to get people to use its software/services.
Nobody forces Apple to lower their prices. But if you don't have a good business model to compete - don't compete. Saying that it was OK for Apple to conspire with book publishers because Apple did not want to lower their prices is heresy. And BTW people did not really ask for iBooks. They would be happy to use Kindle on iPhones/iPads.
Unless your goal is to put pressure on your competitors to get out of your market while also being a loss-leader and encouraging customer loyalty.
While I think what Apple did was fundamentally wrong, I completely understand and empathize with them. Amazon's practices ultimately were hurting the book market and related ecosystem. I happen to like books, and would prefer that companies continue to produce them.....
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Sorry to quote (part of) my own post, but this strategy is largely working. I've noticed more often lately that Amazon does not necessarily have the lowest price any more. But yet it's the first place I go when I want to buy pretty much anything...
Don't be ridiculous. Are you saying that anti monopoly legislation was created by congress to facilitate government shakedowns of corporations? Remember, if the law calls for it, it's not a shakedown. I bet every year when filing your tax return you think that government shook you down once again, right?
I agree with most of what you said here, but I think that line into predatory pricing drawn by the law isn't very clear. For the most part it's about divining intent.
http://www.ftc.gov/bc/antitrust/predatory_pricing.shtm
Personally, I think Amazon's dominance of the physical book market and early dominance of the ebook market are clear indicators of their intent to create a monopsony .
I think the numbers showed a significant increase in competition in the eBook market after Apple's entry (though Apple's share remained very low.)