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In no way was my comment meant as a factual representation of intentional insult toward you.

You simply seemed to be grasping for some illusive argument to substantiate your claims that all Apple Trials should end in punitive damages against Apple.

I merely suggested looking into the legal aspects of decisions. You really should go to www.fosspatents.com and look up the cases that bother you.

I'm sorry this was so difficult. ;)

Yeah, it's pretty difficult considering that website has almost nothing on the Apple Ebook case. Your link is to a site mostly dealing with patent disputes. Hence the name "FOSSPatents".

And it's not some substantiate some illusive argument here. I'm explaining to you how antitrust suits work, and how they differ from criminal and civil cases. You're the one running around here claiming the DOJ is corrupt and they have no case, despite the various websites I've linked to, and the various discussions I've had on the issue.

All you have to offer is ad hominem attacks as per the definition of the term. You're attacking me, not my arguments. I offer up an explanation of what I believe to be the case, and all you can say in reply is "olol you don't know how it works, sorry this is so hard for you".

Yeah? What am I wrong about?
 
I'm not going to jump into your argument over past posts that I did not write, but I hope a correct understand of civil procedure will be helpful to this discussion.

...because the judge said Apple was guilty before they went to trial? Of course she would. It's an antitrust hearing.

Incorrect. "Guilt" was not an issue, as this was a civil, not criminal, case. No worries, though. MR and most of the press have been getting this wrong too, from day one. The word you are looking for is "liable," not "guilty."

They have completely different standards from civil and criminal hearings, where two parties have to prove their point to a jury. In this case, it's the DOJ looking over the evidence, then calling in the defendant if they believe the evidence gives them enough reason to warrant doing so.

Why?

Because if the DOJ didn't think they were guilty of something in the first place, they never would've hauled them into court. Like I said, an antitrust hearing isn't a trial by your peers. It's more like "we've received complaints, we've subpoenaed evidence, looked it over, and damn if we don't think they're right.

Again, incorrect. Your post tries to draw a distinction between an "antitrust hearing" and a "civil trial." But this was just a plain old civil trial, where one party sued another, and the civil burden of proof and other rules applied. Don't let the fact that the judge served as the trier of fact in this stage of the case confuse you. In many civil cases, and on many civil claims, the judge serves as the trier of fact, not a jury, sometimes because that is what the law provides and sometimes because the parties agree to it. In fact, in future phases of the case, such as the damages trial next year, a "jury of Apple's peers" will be empaneled and will determine the amount of damages Apple must pay. Because it is an equitable issue, the court will determine the terms of a forward-looking injunction (if any).

The difference between "claims in equity" and "claims in law" can be confusing, I admit. It arises, in the US, from the fact that the English common law system we inherited developed around two court systems; one subject to the crown and the other subject to the church. It is a fascinating subject, and not one I pretend to be an expert on, although I did take several courses on the subject 25 years ago when I was in law school. If you are interested in further study of the subject, I would recommend Langbein's book History of the Common Law.

Also, a quick comment on the difference between a "hearing" and a "trial." The meaning of those terms comes more from the particular usage context, but typically a hearing, in this civil context, is any "meeting" before the court in which anything other than ultimate liability will be resolved. In the criminal context the statement is true if you substitute "ultimate liability" with "guilt or innocence." As the purpose of the proceeding sub judice was to resolve Apple's liability, or lack thereof, the proceeding is properly called a trial, not a hearing, although most lawyers would understand the reference if you used either term.

Again, I think the confusion in your post arises from the fact that the judge sat as the trier of fact in this part of the trial, not a jury. All that is required in a civil trial is a finder of fact, and that (depending on many rules, including even the Seventh Amendment sometimes) can be either the judge or a jury. Here, it was the judge.

Prove to us that we're wrong".

Also incorrect. The DOJ, as the plaintiff, carried the burden of proof (and, on these claims, also the burden of persuasion, which is something very different). The standard of proof properly applied by the court was a preponderance of the evidence, which is the proper standard for most civil claims-for-relief, and certainly for the claims in this case. Note that the court's opinion is replete with the statement "as the plaintiff, the DOJ carries the burden of proving....."

A lawyers job in an antitrust case isn't to defend their client so much as make the court believe they're mistaken.

Also not true. A lawyer's job in an antitrust case is the same as it is in any civil case: to zealously represent the client within the bounds of the applicable ethical and other rules. The lawyers in this case had the same "job" as the lawyers in a simple slip and fall case. No different.

In an antitrust case, you are guilty until proven innocent.

False. First, "guilt" and "innocence" had nothing to do with this trial, which the DOJ opted to bring as a civil, not criminal, case. (We can conjecture why, but, given the very different rules applicable to the two different types of cases in the antitrust context, it almost certainly had to do with the lack of proof around the mens rea required for criminal liability.) And, in the civil case, Apple was presumed not "liable" until and unless the finder of fact (here, the court) found, by a preponderance of the evidence, that Apple had committed the acts alleged in the complaint.

I think the fact that the DOJ was the plaintiff is causing confusion. The DOJ, like a private plaintiff, may bring a civil suit for violations of the Sherman Act, as happened here. When that occurs, the DOJ is just a normal old plaintiff, with no power to adjudicate right or wrong, and certainly not liability. With respect to these particular issues (but, perhaps not to other issues, such as credibility), the DOJ is no different than if you had sued Apple. In that case, you could not have adjudged Apple's "guilt" (err, liability); neither could the DOJ. One difference you did get correct: the DOJ has pre-suit subpoena power, but, in fact, so do private plaintiffs in certain limited circumstances not applicable here. The DOJ also has some additional limitations, or rules, on its conduct, since it is the government, and not a purely private plaintiff, but I won't go into those here.

So really, why am I wasting my time

Well, good question.

My goal is not to argue, but to provide accurate information.
 
And none of them support the contention that Amazon's pricing is not predatory because the supposedly maintain profitability in eBooks overall. And you've been provided several examples that show that the entire business does not need to be losing money, only specific prices.

What they support is that the courts consistently apply the above mentioned test which consists in mainly the following 2 conditions:

1. Is the price below cost?
2. The loss incurred in the below-cost pricing strategy is likely to be recoupled in the future?

Since Amazon is not incurring in any losses, I fail to see how the second condition is valid.

Books are not a commodity, and the eBook market should not be treated as if all books are created equal. To use an extreme example, below cost pricing should be excused on all but one book, just because you sold one book for a billion dollars. :D

Why not? It means your business model allows you to pull off a profit selling a few items at a very high price and many others as loss leaders.

No, you're the one that has switched argument. I'm still talking about predatory pricing. However, traditionally, the end goal of predatory pricing is to raise prices after eliminating competition. I just think Amazon has a different goal for eliminating competition through their below cost pricing.

That's exactly what I meant and explained: traditionaly the courts have used a very clear and specific definition of predatory pricing. On this I guess we can both agree. We disagree in how we speculate the courts would judge Amazon's practice. I speculate they would stay consistent with the test they used in the past, you speculate they would change it because Amazon's practice does not fit the old test but (in your opinion) still infringes.

You were the one that was arguing that if a court doesn't find them guilty, then they are doing nothing wrong. I think that's silly.

There can be different reasons which makes the court would not find you guilty. One is that not enough proof was found, which is not what typically happens in predatory pricing cases. The other is that what the plaintiff consinders predatory pricing does not match what the courts consider predatory pricing, which is what typically happens.

If the court doesn't find them guilty they either got away with their illegal practice or are doing nothing illegal in the first place. This of course doesn't mean they are doing something right, but the same applies the other way: if they are found guilty doesn't mean they did something wrong. Many here consider Apple's actions in the ebooks case not to be wrong, but they have still been found guilty.

None of your citations state that overall profitability in a market is a defense against charges of predatory pricing. And you've been provided multiple citations that say the opposite.

The citations I provided make perfectly clear that sofar the courts have applied a very specific definition and test to judge predatory pricing cases. One of this test makes absolutely no sense if you are profitable, even the article you linked does not address this issue. As example:

As former Circuit Court Judge Breyer elegantly explained, unless the price cutter can show tha its low price is purely promotional (e.g., a “free sample”) or show that it expects costs to fall when sales increase, “the firm cannot rationally plan to maintain the low price; if it does not expect toraise its price, it would do better to discontinue production.”

You need to go not further than the original sentence to get the whole picture:

Despite this dispute, there is general agreement that a profit-maximizing firm might sometimes find it rational to engage in predatory pricing; it might do so if it knows (1) that it can cut prices deeply enough to outlast and to drive away all competitors, and (2) that it can then raise prices high enough to recoup lost profits (and then some) before new competitors again enter the market.

Again, the same test I mentioned above.

One can understand the intuitive idea behind this test by supposing, for example, that a firm charges prices that fail to cover these "avoidable" or "incremental" costs--the costs that the firm would save by not producing the additional product it can sell at that price. Suppose further that the firm cannot show that this low price is "promotional," e.g., a "free sample." Nor can it show that it expects costs to fall when sales increase. Then one would know that the firm cannot rationally plan to maintain this low price; if it does not expect to raise its price, it would do better to discontinue production.

This is yet again the "profitable" idea. Can Amazon rationally plan to maintain its low prices? Since their pricing strategy is profitable, the answer is yes.
 
nope

I agreed with the saying, "this whole situation amounts to a perverse interpretation of 'anti-trust' laws.":cool:
 
I'm not going to jump into your argument over past posts that I did not write, but I hope a correct understand of civil procedure will be helpful to this discussion.

[...]

My goal is not to argue, but to provide accurate information.


What an outstanding post. I've popped in this thread and the other DOJ related topic a few times the last couple of days (it's a *beautiful* long weekend here on the east coast, so I've spent more time with the family at the beach, surfing, grilling, attending car shows vs. MR activities :) ) It's nice in a legal topic, to get a contribution from a user - who appears to have formal education on the subject matter (and presumably hands on professional experience) - that provides some clarity on the language, process and procedures of the court. :cool:
 
What they support is that the courts consistently apply the above mentioned test which consists in mainly the following 2 conditions:

1. Is the price below cost?
2. The loss incurred in the below-cost pricing strategy is likely to be recoupled in the future?

Since Amazon is not incurring in any losses, I fail to see how the second condition is valid.



Why not? It means your business model allows you to pull off a profit selling a few items at a very high price and many others as loss leaders.



That's exactly what I meant and explained: traditionaly the courts have used a very clear and specific definition of predatory pricing. On this I guess we can both agree. We disagree in how we speculate the courts would judge Amazon's practice. I speculate they would stay consistent with the test they used in the past, you speculate they would change it because Amazon's practice does not fit the old test but (in your opinion) still infringes.



There can be different reasons which makes the court would not find you guilty. One is that not enough proof was found, which is not what typically happens in predatory pricing cases. The other is that what the plaintiff consinders predatory pricing does not match what the courts consider predatory pricing, which is what typically happens.

If the court doesn't find them guilty they either got away with their illegal practice or are doing nothing illegal in the first place. This of course doesn't mean they are doing something right, but the same applies the other way: if they are found guilty doesn't mean they did something wrong. Many here consider Apple's actions in the ebooks case not to be wrong, but they have still been found guilty.



The citations I provided make perfectly clear that sofar the courts have applied a very specific definition and test to judge predatory pricing cases. One of this test makes absolutely no sense if you are profitable, even the article you linked does not address this issue. As example:



You need to go not further than the original sentence to get the whole picture:



Again, the same test I mentioned above.



This is yet again the "profitable" idea. Can Amazon rationally plan to maintain its low prices? Since their pricing strategy is profitable, the answer is yes.

I'm not sure how you manage to ignore all the citations that say overall profitability is not a defense to predatory pricing. Apply the same two prong test to the portion of Amazon's sales that are below cost.
 
I'm not sure how you manage to ignore all the citations that say overall profitability is not a defense to predatory pricing. Apply the same two prong test to the portion of Amazon's sales that are below cost.

Let's apply the test...

1. Are the sales below cost? Yes.
2. Are the losses likely to be recouped in the future through increased prices once the competition is driven away? No, the losses are being recouped right now through increased sales of other ebooks which the below-cost sales drive.

Test failed -> no predatory pricing.

Would the courts use this test or decide to use a new one? I think they would use this test, you think they should use an updated version.
 
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<snip>You have it backwards: Amazon does not make money selling Kindles, it actually makes money selling the content, kinda like a gaming console makes money selling games and not selling the console itself.

It is the so-called razor blade model.

The problem underlying all this is the anti-competitive practice of price fixing.

It is little wonder to me that eBooks have not taken off to a greater extent when the eBook, more often than not, costs as much as, and sometimes more, than the physical book. The publishers restrict reuse and have device incompatibility designed into the process. If you buy a physical book, you can pass it around to family, friends, etc when you finish reading it. You can even donate it to the library or sell it to someone.

Let's face it, eBooks are overpriced. If one had access to the proprietary data on the cost of goods sold, I think we would all be surprised how much is being made on these things. It seems to me that the companies involved could make the same profit on an eBook as on a physical book with a substantially lower price...which would promote sales.

In any event, free competition would determine the market value of eBooks vs. physical books.
 
It is little wonder to me that eBooks have not taken off to a greater extent when the eBook, more often than not, costs as much as, and sometimes more, than the physical book. The publishers restrict reuse and have device incompatibility designed into the process. If you buy a physical book, you can pass it around to family, friends, etc when you finish reading it. You can even donate it to the library or sell it to someone.

I think some ebooks should be cheaper but ultimately I'm fine in paying more for a quality product. I'd rather pay a few dollars more for a well formatted, structured ebook than the physical equivalent. Also the typical physical book doesn't sell that much after the initial wave and needs to be cycled out of the store after a while, which makes the price drop dramatically.

Also I'm not sure about ibooks, but Amazon allows authors to enable lending for their titles. Device incompatibility is in my opinion the biggest issue since it causes vendor lock-in.
 
:confused: There was no monopoly.

Price fixing, collusion, or restraint of trade create defacto monopolies where there is no competition. The net result is the same.

----------

I think some ebooks should be cheaper but ultimately I'm fine in paying more for a quality product. I'd rather pay a few dollars more for a well formatted, structured ebook than the physical equivalent. Also the typical physical book doesn't sell that much after the initial wave and needs to be cycled out of the store after a while, which makes the price drop dramatically.

Also I'm not sure about ibooks, but Amazon allows authors to enable lending for their titles. Device incompatibility is in my opinion the biggest issue since it causes vendor lock-in.

I am not sure you grasp the difference in the cost of goods sold between a physical book and an ebook. The fixed costs are the creation of the content, both by the author, the editors and the staff that format it for publication, whether that be electronically or as a dead tree version.

Each physical book has to be printed on the same paper on the same presses with the same ink and be bound & etc as the one before it. Without need of exact proof, that cost should seem to be substantially greater than the marginal cost of creating one more eBook. Therein lies the big difference in cost of goods sold. (For the moment, I am ignoring the cost of transportation and other distribution costs, although they are very real.)

As far as a quality product goes, that is always a question. Some publishers do a better job of editing, proof reading and so in in the preparation of a book for publication. I will add, as an aside, textbooks for public school seem to be having a very bad time of getting facts straight. Once published, those books are an expensive mistake. An eBook is rather more easily corrected and redistributed at a much, much lesser cost.

Cheers
 
If you are entitled you are entitled. ... If you are not entitled you are not entitled.

Obviously I am not real clear on this.

Good points. I wasn't very articulate. I'll try again. In this case it's pretty clear cut if people deserve something or not. But often I see people feel entitled to a benefit or compensation when they are not. I worked 3 years in Apple Retail and the hardest part was explaining why we couldn't replace something for free when it was the customer's fault it was broken. I saw a lot of 'entitlement attitude' where it was not justified. Sure if people deserve something they should get it. But I also got jaded seeing a lot of people refusing to take responsibility and feeling it was their right for Apple to correct the customer's mistake.

Hopefully that was better explained.
 
Each physical book has to be printed on the same paper on the same presses with the same ink and be bound & etc as the one before it. Without need of exact proof, that cost should seem to be substantially greater than the marginal cost of creating one more eBook. Therein lies the big difference in cost of goods sold. (For the moment, I am ignoring the cost of transportation and other distribution costs, although they are very real.

The problem is not the higher cost of physical ebooks' production, the problem is the higher cost of keeping unsold physical ebooks around indefinitely. After the initial sales most books don't sell very well, which means that unless you lower the price dramatically you would not get rid of them. Physical books take precious space on the shelves and in the warehouse, and you need the space for new books being published.

So after a while physical ebooks' prices get dumped in an effort to sell out the leftovers and mitigate the losses. This is obviously not an issue for ebooks which don't need these price cuts.
 
The problem is not the higher cost of physical ebooks' production, the problem is the higher cost of keeping unsold physical ebooks around indefinitely. After the initial sales most books don't sell very well, which means that unless you lower the price dramatically you would not get rid of them. Physical books take precious space on the shelves and in the warehouse, and you need the space for new books being published.

So after a while physical ebooks' prices get dumped in an effort to sell out the leftovers and mitigate the losses. This is obviously not an issue for ebooks which don't need these price cuts.

A physical book's cost of goods sold remains higher than that of an eBook and always will. That alone is determinative of the pricing structure. Other costs are associated with the physical product, not just books, and the market practice of clearing shelf space for the new products, whether it be the fall line of clothing or newer books.
 
A physical book's cost of goods sold remains higher than that of an eBook and always will. That alone is determinative of the pricing structure. Other costs are associated with the physical product, not just books, and the market practice of clearing shelf space for the new products, whether it be the fall line of clothing or newer books.

What I meant is that to get rid of unsold physical books you might have to resort to selling them at loss because the cost of keeping them might be higher. This can make the phisical book's price lower than the ebook price.
 
Let's apply the test...

1. Are the sales below cost? Yes.
2. Are the losses likely to be recouped in the future through increased prices once the competition is driven away? No, the losses are being recouped right now through increased sales of other ebooks which the below-cost sales drive.

Test failed -> no predatory pricing.

Would the courts use this test or decide to use a new one? I think they would use this test, you think they should use an updated version.

:D And, again, you ignored the primary point that overall profitability is not a defense to predatory pricing.

In the Second Circuit, “The relationship between a firm’s prices and itsmarginal costs provides the best single determinate of predatory pricing.”
Moreover, under the lawin this Circuit, “prices below reasonably anticipated marginal cost will be presumed illegal.”


See the brief I posted earlier for cites.

And pricing below marginal costgreatly increases the probability that rivalry will be extinguished or prevented for reasonsunrelated to the efficiency of the monopolist. Accordingly, a monopolist pricing belowmarginal cost should be presumed to have engaged in a predatory or exclusionary practice.”Areeda & Turner at 712. In accord, Northeastern, 651 F.2d at 87-88.

Price fixing, collusion, or restraint of trade create defacto monopolies where there is no competition. The net result is the same.

:confused: There was no monopoly, defacto or otherwise, in this case.
 
What I meant is that to get rid of unsold physical books you might have to resort to selling them at loss because the cost of keeping them might be higher. This can make the phisical book's price lower than the ebook price.

While that is true to varying degrees (depending upon the book's sales), the up front cost of goods sold by the publisher is what I am addressing. If a publisher makes a certain percentage mark up to the cost of goods sold on a physical book, it is possible for them to actually make that same profit (at a larger percentage of cost of goods sold (or "markup") and still sell the product at a lower price point which should encourage more sales.

There is little doubt that the distribution and inventory costs of an eBook are less.

Cheers

----------

:D And, again, you ignored the primary point that overall profitability is not a defense to predatory pricing.

In the Second Circuit, “The relationship between a firm’s prices and itsmarginal costs provides the best single determinate of predatory pricing.”
Moreover, under the lawin this Circuit, “prices below reasonably anticipated marginal cost will be presumed illegal.”


See the brief I posted earlier for cites.

And pricing below marginal costgreatly increases the probability that rivalry will be extinguished or prevented for reasonsunrelated to the efficiency of the monopolist. Accordingly, a monopolist pricing belowmarginal cost should be presumed to have engaged in a predatory or exclusionary practice.”Areeda & Turner at 712. In accord, Northeastern, 651 F.2d at 87-88.



:confused: There was no monopoly, defacto or otherwise, in this case.

In economics, monopolies earn what are called "extra-normal profits". Competition drives those profits downward to more normal profits. Monopolistic pricing is different in nature than predatory pricing (or a related issue in international trade of "dumping") in that predatory pricing is a practice where a manufacturer (unfairly) competes with other manufacturers either for the specific purpose of driving them out of business in order to raise prices long term or ,in very unusual circumstances, where the pricing may be deemed predatory based upon the result irrespective of the initial intent.

Predatory pricing should not be confused with common, every day loss leader products which merchants frequently advertise in order to get customers into the store to sell them other things.

Monopolistic practices have been found even where there were no overt acts of collusion, but rather an unspoken agreement (by conduct) to maintain prices at certain levels. It can get very messy indeed when looking backwards from the result toward the origin of the practice or event.
 
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I economics, monopolies earn what are called "extra-normal profits". Competition drives those profits downward to more normal profits. Monopolistic pricing is different in nature than predatory pricing (or a related issue in international trade of "dumping") in that predatory pricing is a practice where a manufacturer (unfairly) competes with other manufacturers either for the specific purpose of driving them out of business in order to raise prices long term or ,in very unusual circumstances, where the pricing may be deemed predatory based upon the result irrespective of the initial intent.

Predatory pricing should not be confused with common, every day loss leader products which merchants frequently advertise in order to get customers into the store to sell them other things.

Monopolistic practices have been found even where there were no overt acts of collusion, but rather an unspoken agreement (by conduct) to maintain prices at certain levels. It can get very messy indeed when looking backwards from the result toward the origin of the practice or event.

:confused: Sorry, but I'm not sure what your point is. I can't even tell if you were agreeing or disagreeing with what I said. Or just going on a tangent. :D
 
:confused: Sorry, but I'm not sure what your point is. I can't even tell if you were agreeing or disagreeing with what I said. Or just going on a tangent. :D

Everyone else is talking about being overcharged because of monopolistic practices (price fixing) and you are talking about predatory pricing (being undercharged). People will be getting minuscule refunds, but refunds nevertheless for purchases made. There is no predatory pricing involved here.

You are off topic as well as off on a tangent, but that is your privilege.
 
Everyone else is talking about being overcharged because of monopolistic practices (price fixing) and you are talking about predatory pricing (being undercharged). People will be getting minuscule refunds, but refunds nevertheless for purchases made. There is no predatory pricing involved here.

Obviously, I disagree with you that there was no predatory pricing involved on the part of Amazon, and I've cited legal arguments that support that contention.
 
Obviously, I disagree with you that there was no predatory pricing involved on the part of Amazon, and I've cited legal arguments that support that contention.

You are obviously without a clue as to what predatory pricing really is. Out.
 
Great News

This is great news.

I've been seeing ebook prices come down since these trials.
 
Let's see if I can help the understanding, there seems to be some overlap in thoughts...
Everyone else is talking about being overcharged because of monopolistic practices (price fixing)
Discussion of Apple's legal issues, currently embroiled in an actual court case.
and you are talking about predatory pricing (being undercharged).
Discussion of Amazon monopolistic practices, should have been an actual court case, but is not.
People will be getting minuscule refunds, but refunds nevertheless for purchases made. There is no predatory pricing involved here.
Back to Apple. Different topic, so yes, they don't necessarily have to have the same points.
You are off topic as well as off on a tangent, but that is your privilege.
Yes. That's what makes it exciting!
 
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