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DoJ Files Suit Against Apple, Ebook Publishers 235

Posted by Unknown Lamer
from the project-gutenberg-accused-of-price-fixing dept.
forkfail writes "The Department of Justice has filed suit against Apple and a number of book publishers, including Hachette SA, HarperCollins, Macmillan, Penguin and Simon & Schuster, claiming that they worked in collusion to artificially rig prices on eBooks."
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DoJ Files Suit Against Apple, Ebook Publishers

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  • by Anonymous Coward on Wednesday April 11, 2012 @11:13AM (#39645175)

    wasn't it in steve jobs biography him stating that ebooks couldn't be cheaper than in the itunes store or he wouldn't allow them to be in the store at all? That seems that Apple would have actually been the driving force.

  • by Anonymous Coward on Wednesday April 11, 2012 @11:22AM (#39645315)

    If you have control over whether it's in those other bookstores, then, yes, you do have control over the price. You don't like their terms, don't publish it there. That's how you control it.

    The problem being, what if there is only one option that dominates the industry by luring people in by selling Hunger Games below the price they paid for it? Everyone buys that reader, uses the built in store, and you can either pay them what they ask or go away and not do business. That is why establishing dominance through dumping is against antitrust law, which is what Amazon was doing. Why is the DOJ not going after Amazon again?

  • by DurendalMac (736637) on Wednesday April 11, 2012 @11:25AM (#39645365)
    Because after decades of $100+ physical textbooks from the major publishers, they go after far cheaper eBooks while they're still young.

    Why they didn't go after publishers a LONG TIME AGO and only choose eBooks now is beyond me...
  • Re:Really? (Score:5, Interesting)

    by canajin56 (660655) on Wednesday April 11, 2012 @11:52AM (#39645805)
    Don't know if the "collusion" bit is true, but Shyster and Shyster books are all $19.95 on Amazon and Kobo, even while the paper version of the same book is going for $6. They used to be less than the paperback, which is why it made economic sense to buy an ereader, since you'd eventually make the money back in book savings. Now you're paying treble for a book you cannot lend, resell, or give away.
  • Re:Really? (Score:4, Interesting)

    by ZombieBraintrust (1685608) on Wednesday April 11, 2012 @12:05PM (#39646043)
    The agency model is what Apple and the publishers are being sued over. The retailer doesn't have control over price because of the price fixing. Thus you get wierd things like ebooks costing more than discounted physical books. I think physical books will still sometimes cost more than ebooks even if the agency model goes away. At some point physical bookstore need to clear their inventory. They do this by selling unwanted books at cost. Ebook stores don't have inventory issues so they will never offer discounts. Of course no one cares about this. These are unwanted books. People don't like the price difference on best sellers on release day. That problem will be solved.
  • Collusion? Really? (Score:3, Interesting)

    by MikeMo (521697) on Wednesday April 11, 2012 @12:43PM (#39646671)
    Before Apple started with the agency model, the "average" price for eBooks at Amazon was, indeed, lower than those prices today. Amazon was selling the books at a loss in order to sell more Kindles [knowledgeproblem.com]. This infuriated the book publishers, out of concern that Amazon was devaluating the book in general with prices that low. The book publishers had no control whatsoever over the retail price. Combined with Amazon's weight, the publishers had no choice but to just "suck it up".

    Apple, on the other hand, needed to do something to break Amazon's lock on the eBook market, and to get the publishers to offer their material on the Apple store. So, they offered the publishers what they wanted, which is the agency model.

    How this turns into collusion is beyond me, as Apple is not establishing the price of these books, nor did they convince the publishers to all agree on a price or any such thing. The DOJ's angle appears to be the "most favored nation" clause, which has the effect of making Apple's price the best price for a given title, but that seems pretty weak to me, as that does nothing to get the various publishers to sell their books at the same price as all of the other publishers. Even if it did, doing so is not collusion.
  • by cpu6502 (1960974) on Wednesday April 11, 2012 @01:22PM (#39647299)

    P.S.

    I was reading the Year's Best SF of 1992. The intro provides a summation of the state of the industry, and it said the publishing industry was "dying". A quick scan through the 1997, 2002, and 1987 editions had the same dire prediction of publishing going away: Magazines no longer existing and books ceasing to be published.

    The only difference is today they blame amazon and "too cheap ebooks". Back in the 90s and 80s, they were blaming TV and movies for stealing-away audience. Whatever the cause it's always the same tired song-and-dance.

    Ever heard the story of the boy who cried wolf? After awhile people stopped believing the boy's claims of seeing a wolf. Well I view the publishing industry the same way. They've been crying wolf for 25 years. Instead of fighting technology, they should embrace it.

  • Re:Really? (Score:4, Interesting)

    by bws111 (1216812) on Wednesday April 11, 2012 @02:44PM (#39648467)

    This is an oft-repeated meme on slashdot, and for the most part it is just plain wrong.

    The only time that statement is true is when there are multiple sources of a product, and there is no difference between the products (or the purchasing thereof) except for price. For instance, supposing there are two sellers of product X, selling the exact same item. Retailer A charges $2 and has the product available today. Retailer B only charges $1, but you have to wait a month to get the product. Those two purchases are NOT identical, and the fact that retailer B is charging only half of what retailer A is charging is not going to cause A to lower his price.

    Now, for the comparison between paper books and e-books. The first, most obvious, thing is that ebooks and paper books are not the same thing. Therefore, comparing their prices is meaningless. Sure, they both have the same content. But beyond that there are value adders and detractors. Is paper an adder or detractor? Depends on the purchaser. Some people would pay more to have a physical book. Some people would pay more to NOT have a physical book they have to carry around, store, and dispose of.

    If people are willing to pay more for an ebook (ie the ebooks are selling), why is the market not 'working as it should'? If people are not willing to pay more for an ebook (the ebooks are not selling), why is the market not 'working as it should'? The market works both ways - sometimes prices go up, sometimes they go down.

  • Re:It doesn't matter (Score:5, Interesting)

    by WaywardGeek (1480513) on Thursday April 12, 2012 @03:49AM (#39655097) Journal

    Here's what's going on. Steve Jobs wanted 100% of the saving of switching from print to ebooks to go to Apple, not users or publishers and authors. However, he didn't want to drive customers away with higher prices. So, how do you suck 30% of the revenue out of an industry as pure profit without adding value or inviting unwanted competition? This is pure Steve Jobs evil marketing genius, and one reason to be glad he's dead.

    The answer is the "agency model" combined with "most favored nation status". The agency model eliminates the likes of Ebooks.com and Ebook Depot, where you could often go and find an ebook for $1 or $2 less than Amazon. By forcing the industry to go to the Agency model, an ebook costs the same no matter where you buy it, eliminating any priced based competition, and reducing the consumer's choice to a matter of convenience, where Steve could dominate with the iPad and iTunes. Just for good measure, he removed any apps that also sell e-books from the App Store, like Sony's e-book app.

    However, the big publishers wanted all of the profits for publishing as ebooks and then some. They pretty much wanted to screw authors, users, and the ebook stores, and were hopping mad at Amazon for forcing them to sell at $10 while Amazon took a bigger share of the profits than was even close to reasonable (over 50% for small publishers). In dealing with Apple, they loved the agency model and immediately raised prices, and of course they wanted all of the revenue. Statements like "4% would be a reasonable fee for the digital distributor" were common. Rather than bicker with each publisher like Amazon did, Apple simply demanded the lowest price the publisher offered anyone, meaning Amazon's price. Thus, Steve gets just as good a deal as Amazon had for so long. And in this case, he gets tons of cash with no work, and no added value in the chain. On the positive side, he did lower Apple's cut for doing nothing to 30%, or roughly 100% of the savings for going digital. Amazon responded by requiring their publishers also give them the lowest price, and then even Google jumped on board. Thus over 90% of the distribution channel for ebooks agreed on one thing: Apple, Amazon, and Google get 30% for doing almost nothing. Screw users, authors, and publishers. Between them, they have become the new gate keepers, sucking money out of you and me and crushing independent stores and sales channels. It's about time the DoJ looked into this!

    This anti-competitive price fixing pisses me off. In the age of digital media, authors should be closer than ever to their readers. Publishers are still needed for editing and marketing, as books rarely become best sellers by themselves. However, the lower cost of digital distribution should mostly go to us, the consumers. If a print book is $10, I want the ebook for $7.

    I got so upset at how all these companies are screwing the consumers over, that I came up with a potential solution. I've got a stalling effort to create Ebooks.coop. Members of this coop would pay for ebooks through the coop at the same price as they would using iBooks or a Kindle, because of the agency model. The coop would hopefully get close to the price from publishers as Amazon and Apple. Thus, for doing pretty much nothing, Ebooks.coop would make an unreasonable amount of money on each sale. At the end of the year, members would be mailed a check for their share of the profits, which would be proportional to how much they spent at the coop. This should enable us readers to "earn" most of that 30% savings.

    The main reason I've stalled on this effort is DRM. I have difficulty reading print or a computer screen, and use text-to-speech software to read ebooks. Fortunately, I can get many popular ebooks almost for free from Bookshare.org, because of a loop-hole in copyright law specifically designed to help the blind. However, most ebooks are not available there, so I am forced to break the DRM manually, which is a huge pain, and always a moving challenge as publisher

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