Legal Experts Suggest Justice Department Unlikely to Win Antitrust Suit Against Apple

[bbeagle]

You understand that Amazon buys the books and sells them? Apple is not buying any books or anything from the publishers.

You're going down an interesting road that I never thought of - where Amazon buys e-book licenses, and then sells the e-book licenses, and Apple just allows other publishers to sell their books in it's store without Apple doing any buying or selling.

If this is the case, then Apple is clearly not doing anything wrong, as they have NOTHING AT ALL to do with buying or selling books or setting prices - Apple is just like a UPS driver delivering goods from one place to another.

 

[JohnDoe98]

I love that everyone has an opinion on whether Apple's been naughty despite not knowing the law or precedent. Then again, the same bunch are expert programmers, graphic designers or network admins when the thread calls for it.

While I'm comfortable with EU competition law, my knowledge of US antitrust ends at the schools of theory and areas which have had an effect within the EU.

You don't have to have a degree to have read-up on a topic. I thought these threads were for informed discussions.

 

[ftaok]

Exactly. If the Publishers charge Amazon more for an ebook than they charge for the physical books, consumers will complain that's crazy since an ebook costs less to manufacture and distribute. But if the publishers sell ebooks at the same price as physical books, Amazon can kill the competition by selling the books cheaper since they make money on hardware sales and bookstores can't do that. In the long run the only way to avoid giving Amazon a monopoly is to employ something like the Agency Model Apple proposed. Otherwise the publishers will be in a world of pain.

The problem with the publishers is that they really don't have tech people in position of power (at least that's what it seems like). In this new age of media distribution, you need people familiar with technology making decisions, or at least contributing.

The solution to having Amazon killing the competition and then abusing their dominant position is to only allow the retailer to sell a common, standardized file. That way, Amazon isn't able to leverage their Kindle hardware since they would be compatible with all devices. Add some sort of DRM if you need to.

Sell the ePub files to the Amazons and Apples of the world at a specific price. If they want to discount it and take a loss in the hopes of making up in other ways, then so be it.

 

[drorpheus]

Are you talking about ebooks or paper books?

Both, Amazon buys all of there paper books and ebooks from publishers and or distributors and sells them in their store amazon.com, Apple buys zero paper or ebooks, they're just giving whoever wants a vehicle to sell there products and they require you pay them a fixed percentage for using Apples vehicle

What buying leverage does Apple have in ebooks? Amazon still has 61% of the market in the US. Apple has 7%.

http://www.the-digital-reader.com/2012/03/20/bowker-amazon-dominates-the-world-ebook-market/
http://www.flickr.com/photos/59991790@N02/7001278467/sizes/l/in/set-72157629630447801/

Apple doesn't have any buying leverage because they aren't buying any books.

 

[JohnDoe98]

The problem with the publishers is that they really don't have tech people in position of power (at least that's what it seems like). In this new age of media distribution, you need people familiar with technology making decisions, or at least contributing.

Yep, and that's a theme Walter Isaacson kept repeating throughout the Steve Jobs book.

The solution to having Amazon killing the competition and then abusing their dominant position is to only allow the retailer to sell a common, standardized file. That way, Amazon isn't able to leverage their Kindle hardware since they would be compatible with all devices. Add some sort of DRM if you need to.

Sell the ePub files to the Amazons and Apples of the world at a specific price. If they want to discount it and take a loss in the hopes of making up in other ways, then so be it.

That's exactly what the deal with Apple was supposed to accomplish. I guess its the way the deal was brought about that was the problem.

 

[BaldiMac]

Both, Amazon buys all of there paper books and ebooks from publishers and or distributors and sells them in their store amazon.com, Apple buys zero paper or ebooks, they're just giving whoever wants a vehicle to sell there products and they require you pay them a fixed percentage for using Apples vehicle

That's a weird distinction for ebooks. What's the difference?

Apple doesn't have any buying leverage because they aren't buying any books.

Ah. You were referring to Amazon's buying leverage, not Apple's. It was not clear.

I'm baffled by your argument though.

 

[JohnDoe98]

Both, Amazon buys all of there paper books and ebooks from publishers and or distributors and sells them in their store amazon.com, Apple buys zero paper or ebooks, they're just giving whoever wants a vehicle to sell there products and they require you pay them a fixed percentage for using Apples vehicle


Apple doesn't have any buying leverage because they aren't buying any books.

I don't think Amazon orders 500 licences for ebooks and orders more when they run out. I'm pretty sure they just sell the ebook and send a check to the publisher for the agreed upon price, which is also what Apple does.

 

[terrymr]

This is assuming that the costs for printing, shipping, etc is a big piece of the overall cost.

You're forgetting all of the overhead and talent costs. You have to pay the author. You have to pay the employees of the publishing house (editors, fact checkers, etc). You have to pay for promotion and advertising.

I don't know what the breakdown is, but I'm sure any accountant worth their salt can get the data to say whatever they want it to say.

If it's anything like the music industry then most of those costs are deducted from the authors royalty which is probably a dismal 1% of the retail price.

 

[JohnDoe98]

If it's anything like the music industry then most of those costs are deducted from the authors royalty which is probably a dismal 1% of the retail price.

For the very successful titles sure, but it isn't always easy to predict what's going to be the next best seller, so often times the costs do end up being covered by the publishing/recording/movie industry.

 

[ftaok]

That's exactly what the deal with Apple was supposed to accomplish. I guess its the way the deal was brought about that was the problem.

Not really. Amazon's ebooks are in a proprietary format. Apple's iBooks are in a proprietary format.

What I would suggest would be a single, standard format that is controlled by the publishers that the Apples and Amazons would sell. The publishers would offer these files to the retailers at a set price and the retailers could sell them for whatever they wanted. They would need to have some pricing science to help set these prices, since there's no inventory involved.

ft

 

[Huracan]

It's funny how many people try to justify Apple, probably against their own self-interest of having a potential for cheaper books. Of course Apple has leverage, tons and tons of it. Access to their IOS devices for publishers. Yes, I know you can install a number of competitor apps, but there is only one Apple app for that, iBooks, and iTunes to tie the whole thing together.

They have a huge advantage over their competition.

Anyway, as a consumer, this is what I would like to see. I would like to be able to buy ebooks at the best price available (same way I am used to buy a physical book). I should be able to read that book in whatever device I choose, and in whatever app compatible with the ebook format, better yet, allow for change of format, i.e. epub to pdf, html, etc. Ideally without DRM. However, even with DRM this could still be possible if the publishers are able to permit downloads to a customer in whichever format they choose. I know I am kind of dreaming, but just think about all the freedoms you lose when you go digital book, opposed to a physical book. Just think you buy an entire collection of book from Apple and in a few years Sony or someone else comes with a great device, all that investment in books, gone. It is as if you buy a new house and the bookcase is not compatible with your books and you have to get rid of all your books and start anew. I don't even want to get started about the restrictions to borrow books from friends, etc.

 

[blow45]

Yep, and that's a theme Walter Isaacson kept repeating throughout the Steve Jobs book.

That's exactly what the deal with Apple was supposed to accomplish. I guess its the way the deal was brought about that was the problem.

Actually that's not at all what apple were trying to accomplish. They were involved in price fixing with the publishers at 12.99 and upwards for books to ensure a 30% cut for them and a more profits for the publishers that what they currently had. It's one thing favouring the agency model, and quite another setting prices with the publishers to ensure a fixed profit for your company (apple).

 

[firewood]

It's funny how many people try to justify Apple, probably against their own self-interest of having a potential for cheaper books.

Or for their self interest, as Apple's stock price has gone up by more than they might have saved buying books at Amazon's predatory prices.

Amazon is trying to kill all the independent bookstores that Border's failed to kill (before getting killed themselves). The end result of your potential for cheaper books is that there will be no books (real ones), but they would be really cheap if they still existed. Have fun reading blogs.

 

[BaldiMac]

It's funny how many people try to justify Apple, probably against their own self-interest of having a potential for cheaper books.

Hard to believe, but cheaper isn't everyone's only concern.

Of course Apple has leverage, tons and tons of it. Access to their IOS devices for publishers. Yes, I know you can install a number of competitor apps, but there is only one Apple app for that, iBooks, and iTunes to tie the whole thing together.

They have a huge advantage over their competition.

After two years, Apple has 7% of the eBook market in the US. Amazon has 61%.

Anyway, as a consumer, this is what I would like to see. I would like to be able to buy ebooks at the best price available (same way I am used to buy a physical book). I should be able to read that book in whatever device I choose, and in whatever app compatible with the ebook format, better yet, allow for change of format, i.e. epub to pdf, html, etc. Ideally without DRM. However, even with DRM this could still be possible if the publishers are able to permit downloads to a customer in whichever format they choose. I know I am kind of dreaming, but just think about all the freedoms you lose when you go digital book, opposed to a physical book. Just think you buy an entire collection of book from Apple and in a few years Sony or someone else comes with a great device, all that investment in books, gone. It is as if you buy a new house and the bookcase is not compatible with your books and you have to get rid of all your books and start anew. I don't even want to get started about the restrictions to borrow books from friends, etc.

Funny how quality and variety of the actual content isn't one of your concerns. There is a downside to competing on price alone. (Especially when the market leader is willing to lose money on each sale to drive out the competition.)

 

[gnasher729]

Not really. Amazon's ebooks are in a proprietary format. Apple's iBooks are in a proprietary format.

What I would suggest would be a single, standard format that is controlled by the publishers that the Apples and Amazons would sell. The publishers would offer these files to the retailers at a set price and the retailers could sell them for whatever they wanted. They would need to have some pricing science to help set these prices, since there's no inventory involved.

All the free books on the iTunes book store that I checked are in standard ePub format. I think (but I could be wrong) that books with DRM are ePub, wrapped into the same DRM that was used by Apple for music years ago. And ePub 2 is basically a standard zip file with html inside.

Any reasonable person would refuse to buy ebooks in a format that cannot be used everywhere. I go a little step further and don't buy ebooks in a format that I cannot use everywhere legally.

 

[JohnDoe98]

Not really. Amazon's ebooks are in a proprietary format. Apple's iBooks are in a proprietary format.

What I would suggest would be a single, standard format that is controlled by the publishers that the Apples and Amazons would sell. The publishers would offer these files to the retailers at a set price and the retailers could sell them for whatever they wanted. They would need to have some pricing science to help set these prices, since there's no inventory involved.

ft

I stand corrected then. I thought Apple was using epub with DRM, I didn't realize only their software could read them.

----------

It's funny how many people try to justify Apple, probably against their own self-interest of having a potential for cheaper books. Of course Apple has leverage, tons and tons of it. Access to their IOS devices for publishers. Yes, I know you can install a number of competitor apps, but there is only one Apple app for that, iBooks, and iTunes to tie the whole thing together.

They have a huge advantage over their competition.

Anyway, as a consumer, this is what I would like to see. I would like to be able to buy ebooks at the best price available (same way I am used to buy a physical book). I should be able to read that book in whatever device I choose, and in whatever app compatible with the ebook format, better yet, allow for change of format, i.e. epub to pdf, html, etc. Ideally without DRM. However, even with DRM this could still be possible if the publishers are able to permit downloads to a customer in whichever format they choose. I know I am kind of dreaming, but just think about all the freedoms you lose when you go digital book, opposed to a physical book. Just think you buy an entire collection of book from Apple and in a few years Sony or someone else comes with a great device, all that investment in books, gone. It is as if you buy a new house and the bookcase is not compatible with your books and you have to get rid of all your books and start anew. I don't even want to get started about the restrictions to borrow books from friends, etc.

What makes you think Apple wants DRM? The second the Music industry allowed it, didn't they remove it from their music store? Also, I think a lot of us are basing ourselves on what Walter Isaacson reports in the Steve Jobs biography. If you have a better source, please share it with the rest of us.

Oh and for the record, you can strip the DRM and use the book on any device you want, legally. Just like we did with music when we ripped CDs.

 

[blow45]

Or for their self interest, as Apple's stock price has gone up by more than they might have saved buying books at Amazon's predatory prices.

Amazon is trying to kill all the independent bookstores that Border's failed to kill (before getting killed themselves). The end result of your potential for cheaper books is that there will be no books (real ones), but they would be really cheap if they still existed. Have fun reading blogs.

what the heck has apple's stock price to do with price fixing for the ibook store?

Oh, and apple isn't trying to kill independent bookstores, they are mother teresa and trying to revive them via having everyone buy through apple...
Remind me where I read exactly that apple was talking with the publishers that they should be offering a discounted ebook via apple's store for every printed book bought at an independent bookstore...Oh that's right I didn't read this anywhere.

 

[JohnDoe98]

Actually that's not at all what apple were trying to accomplish. They were involved in price fixing with the publishers at 12.99 and upwards for books to ensure a 30% cut for them and a more profits for the publishers that what they currently had. It's one thing favouring the agency model, and quite another setting prices with the publishers to ensure a fixed profit for your company (apple).

You have proof of Apple's being complicit in the price-fixing scandal? I thought that was going to be determined by the courts. But since you already have it settled, I guess the DoJ should contact you for your insight into this case. As for the 30%, that's the distribution fee Apple charges for participating in its online store. It's the same cut for books, apps, etc.

 

[Wondercow]

Yep. The DOJ should be more concerned about regulating the price of gasoline and food, so we the consumers don't have to keep paying those outrageous prices. People can choose to buy or not to buy a book, but people have no other choice than to buy gas and food.

Walk, jog, ride a bike, rollerblade, rollerskate, skateboard, bus, e-bike, electric car, electric scooter.

 

[ftaok]

I stand corrected then. I thought Apple was using epub with DRM, I didn't realize only their software could read them

All the free books on the iTunes book store that I checked are in standard ePub format. I think (but I could be wrong) that books with DRM are ePub, wrapped into the same DRM that was used by Apple for music years ago. And ePub 2 is basically a standard zip file with html inside.

Any reasonable person would refuse to buy ebooks in a format that cannot be used everywhere. I go a little step further and don't buy ebooks in a format that I cannot use everywhere legally.

I think I'm wrong on this. I just looked at Wikipedia and it looks like iBooks does indeed use standard ePub. I think I got confused with the new textbook format.

Anyways, my point would be that the publishers would force everyone to sell the same format. So Amazon would have to drop the Kindle format and sell standard ePub files.

BTW, can iBooks be read on Macs/PCs? If they're standard ePub files, then this should be no problem. But I seem to recall loads of threads here complaining that Apple doesn't have an iBooks app for the Mac.

 

[calb]

You don't have to have a degree to have read-up on a topic. I thought these threads were for informed discussions.

But you can't come to a sensible conclusion on the matter without knowing the law and precedent. I don't know US law, so won't pretend to impose my reading of it upon others.

 

[blow45]

Hard to believe, but cheaper isn't everyone's only concern.

Yeah of course, once we are talking foxconn we are talking cheaper, when we switch to ibooks cheaper isn't everyone's concern, but the interests of the reading public and independent bookstores that apple is safeguarding by .

After two years, Apple has 7% of the eBook market in the US. Amazon has 61%.

What does that have to do with their general clout and power they can leverage via the proliferation of their devices? It's obvious that in two years they would have a 7% or so percentage because they have only been selling much (much) fewer titles and for only two years. Actually it's a testament to their clout that in two years they've managed to go up to 7% with as few as the books they sell in comparison to other outlets.

Funny how quality and variety of the actual content isn't one of your concerns. There is a downside to competing on price alone. (Especially when the market leader is willing to lose money on each sale to drive out the competition.)

This is bs that has been repeated here to the point of stupidity. Amazon isn't losing money on each sale. They have select loss leaders in ebooks. Educate yourself before repeating this. Btw, apple's strategy of setting artificially high and set prices with publishers to guarantee them a 30% per sale is a strategy that is supposed to benefit the consumer right and NOT drive out the competition?

The things you read in these forums...

 

[Amazing Iceman]

Walk, jog, ride a bike, rollerblade, rollerskate, skateboard, bus, e-bike, electric car, electric scooter.

You go ahead and do that. Isn't your mind capable to understand that a gas price increase affects not only to regular people driving, but to transportation, freight services, electricity cost, and everything else that depends on a service that requires the use of gas or diesel?

Mmm.. Your nickname says it all...

 

[BaldiMac]

I think I'm wrong on this. I just looked at Wikipedia and it looks like iBooks does indeed use standard ePub. I think I got confused with the new textbook format.

Anyways, my point would be that the publishers would force everyone to sell the same format. So Amazon would have to drop the Kindle format and sell standard ePub files.

BTW, can iBooks be read on Macs/PCs? If they're standard ePub files, then this should be no problem. But I seem to recall loads of threads here complaining that Apple doesn't have an iBooks app for the Mac.

Free books are standard ePub. Paid (or protected) books are standard ePub wrapped in Fairplay DRM, so they can only be read in iBooks.

 

[JohnDoe98]

BTW, can iBooks be read on Macs/PCs? If they're standard ePub files, then this should be no problem. But I seem to recall loads of threads here complaining that Apple doesn't have an iBooks app for the Mac.

Only if you strip the DRM. With the DRM in place you can't view it on your Mac. I don't know who to blame, the publisher's licensing agreement or Apple, but it really sucks. Apple needs to get an ibooks for OS X and enable the syncing of all files in ibooks across devices. It's pretty annoying right now.