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Apple Fires Back At DoJ Over eBook Price Fixing 311

Posted by Soulskill
from the best-defense-is-a-good-offense dept.
An anonymous reader writes "CNN takes a look at Apple's response to the Department of Justice's investigation into eBook price fixing. The filing 'cuts the government's case to shreds' while at the same time not bothering to defend the five publishers also under investigation. Apple said, 'The Government starts from the false premise (PDF) that an eBooks "market" was characterized by "robust price competition" prior to Apple's entry. This ignores a simple and incontrovertible fact: before 2010, there was no real competition, there was only Amazon. At the time Apple entered the market, Amazon sold nearly nine out of every ten eBooks, and its power over price and product selection was nearly absolute.'"
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Apple Fires Back At DoJ Over eBook Price Fixing

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  • Re:A lot of words (Score:5, Interesting)

    by sribe (304414) on Sunday May 27, 2012 @02:20PM (#40129475)

    That's a lot of words that don't change the fact that virtually every eBook you could ever want to buy costs more now than it did before Apple entered the market, which is the actual problem that the DOJ case intended to address.

    Except that if you actually read the words, they claim the exact opposite. I have no data to offer about their claims, but you haven't offered any either. In fact, you seem to be offering what the DOJ offered, anecdotes involving the prices of a tiny number of books, with no analysis at all of the overall market.

    And remember, Apple exerts almost zero (the exception being the so-called "most favored nation" clause) control over book prices.

  • Re:A lot of words (Score:5, Interesting)

    by DesertJazz (656328) on Sunday May 27, 2012 @02:24PM (#40129503) Homepage

    Unfortunately I think the argument that Apple itself isn't responsible will probably be considered true in the end. The book publishers on the other hand can, and should, still get nailed to the wall. Charging as much for an ebook as a physical book is completely off-base. You still have to make the money back on editors, artwork, advertisement, etc., but the physical print, transportation, and storage costs should cause those books to be discounted a good amount. As it is, much of the time you can buy a print edition cheaper than an eBook version on new releases...

    Apple certainly deserves some of the blame, but I just can't see the DOJ managing to make it stick against them in this case.

  • by utkonos (2104836) on Sunday May 27, 2012 @02:33PM (#40129549)
    We need some independent publishing houses, and we need them fast. The content distribution should not be that difficult, as long as these indie publishers are able to publish DRM-free books in multiple formats. Make your books available in all the major formats (kindle/epub), and you will kill Amazon, Apple, Google, and anyone else. The question is, what will those companies do to stop you?
  • Re:A lot of words (Score:5, Interesting)

    by cpu6502 (1960974) on Sunday May 27, 2012 @02:38PM (#40129579)

    The DOJ will demolish Apple's filing by saying, "That means 1 in 10 ebooks were not sold in Amazon, but on other magazine and book websites. So there was a healthy market of multiple e-stores competing with one another to lower the prices of this product, until Apple arrived on the scene and colluded with the publishers to engage in price-fixing" --- When the record companies tried this with CD sales, the case found Walmart was part of the collusion, and just as guilty of the crime. Same applies to Apple mart.

  • by MrHanky (141717) on Sunday May 27, 2012 @02:38PM (#40129583) Homepage Journal

    It's harmful to pay for books?

  • Oxford Comma matters (Score:2, Interesting)

    by nastav (2611511) on Sunday May 27, 2012 @02:41PM (#40129595)
    From Page 6, Bullet #7 (emphasis mine) "This lawsuit wrongly seeks to condemn Apple based on the Government’s apparent dissatisfaction with the impact of competitive entry, demand stimula- tion and innovation (ignoring significant indicia of consumer and market benefit), not based on any anticompetitive conduct by Apple. This is contrary to law and sound economic policy." "This is contrary to law and sound economic policy" means ( "This is contrary to law" ) AND ( "This is sound economic policy" ) When written correctly, with the Oxford Comma in place, it would have the intended meaning: This is contrary to law, and sound economic policy Yeah, parts of Oxford University don't use the serial comma any more, and some even actively recommend against it's use [mediabistro.com]. Doesn't mean they are right though.
  • by artor3 (1344997) on Sunday May 27, 2012 @02:55PM (#40129683)

    I want you to lose. I think that authors deserve to earn a decent living. So I'll keep buying books and supporting authors I enjoy.

  • by Anonymous Coward on Sunday May 27, 2012 @03:07PM (#40129753)

    No, they don't. A writer must sell a great many books to earn a good living; this can be done by writing books you do not like, but it cannot be done by a horrible writer. If you think you've read a published book by a horrible author, then you haven't seen the stuff they're rejecting.

  • Re:A lot of words (Score:5, Interesting)

    by Richard_at_work (517087) <richardpriceNO@SPAMgmail.com> on Sunday May 27, 2012 @03:20PM (#40129823)

    Before iBooks, I bought a lot of stuff from Ereader.com, and here are some of my comparisons (in GBP)

    Revelation [Mass Effect Series Book 1] £2.99 - iTunes price £4.99
    Ascension [Mass Effect Series Book 2] £2.99 - iTunes price £4.99
    Pandoras Star £4.99 - iTunes price £8.99
    Judas Unchained £4.99 - iTunes price £8.99

    Those examples were purchased in 2008, the iTunes prices are right now. I could go rough the other 50 or so books I purchased if you wish?

    None of the purchases I made on Ereader are currently available for new purchase - I can still download my purchased copies under my account, but you couldn't buy them now.

    I think the DOJ have a fairly decent case here.

  • Re:A lot of words (Score:3, Interesting)

    by Anonymous Coward on Sunday May 27, 2012 @03:28PM (#40129883)

    I don't intend to waste my time pulling up research to prove what is already obvious to me. I've been buying ebooks for years. Before the agency model, books were cheap. After it, they were not. Every single book on my 100+ book wishlist on Amazon that has the prices set by the publisher (agency model) is $10+; every single book on my 100+ book wishlist on Amazon that has the prices set by Amazon (pre-agency model) is $7 or less. These are all full length books, and most either literary classics or science fiction.

    The DOJ and Apple can headbutt each other in court to actuall prove the claim, but I don't need to do so to know why I would side with.

  • Re:A lot of words (Score:5, Interesting)

    by teg (97890) on Sunday May 27, 2012 @03:55PM (#40130023) Homepage

    Amazon wasn't as much dictating more reasonable prices (for your definition of "reasonable") as "selling at below cost" [salon.com] to build a dominant market position.

    Besides, one vendor being able to dictate prices in the market is hardly seen as a healthy market.

  • Important Dates (Score:4, Interesting)

    by ZombieBraintrust (1685608) on Sunday May 27, 2012 @04:21PM (#40130165)
    2006 Amazon was the king of books sold online. If you purchased a book and had it delivered to you house via Fedex chance are you purchased your book from Amazon or its chief competitor Barnes and Noble. Amazon was the Walmart or the Tower records of books.
    Sept 2006 Sony releases the PRS-500 e-ink ereader.
    Nov 2007 Amazon releases the Kindle and begins marketing it on Amazon.com to its large book buying customer base.
    Nov 2009 Barnes and Noble, Amazons primary competitor, releases the Nook two years after the Kindle. It receives good reviews. B&N starts marketing the device in B&N stores to its millions of customers.
    Mar 2009 Amazon releases the Kindle app for IPhone (app would later work on IPad)
    April 2010 Apple releases the IPad with IBooks three years after the release of the Kindle and 1 year after the release of the Kindle app. The Agency model replaces the wholesale model.
    July 2010 Borders starts selling the Kobo ereader three years after the release of the Kindle
    Oct 2011 Borders goes into bankruptcy. Kobo survives and still sells books under the Agency model.
    So saying there was no competition is strictly true. With the exception of Sony, Amazon did not have any competition for 2 to 3 years. So of course it gained 90% market share. And of course that market share went down after B&N started selling the Nook. If you look at current market share it is similar to Amazons share in 2006. Amazon in #1 and B&N is #2.
  • Re:A lot of words (Score:5, Interesting)

    by poemofatic (322501) on Sunday May 27, 2012 @04:38PM (#40130251)

    Copyright is not a free market and filing antitrust suits over pricing or price collusion is specious

    This misunderstanding is at the heart of the matter. Copyrights grant a monopoly (and therefore the right to engage in monopoly pricing) to the copyright holder for that specific work. The fact that a work is copyrighted does not grant monopoly rights to everyone else in the production chain, nor does it allow monopoly pricing for all books. I.e. you can say "this work which I own, I only make available to bookstores and re-sellers for $20". But the publishers cannot collude together and say "All books that *we* collectively own are only available for $20", nor can the bookstores and re-sellers collude to charge a fixed premium over what they pay publishers. The bookstore does not hold any copyrights, and no individual publisher holds all copyrights. So a general increase in the price of *all* books without any corresponding increase in marginal costs, prices paid to authors, or input prices is pretty good evidence of illegal collusion, irrespective of whether any individual book is copyrighted.

    So what you have here are two illegal practices:

    * publishers colluding with each other to charge high prices. They should be competing with each other, setting only the prices for the works that they (individually) hold copyrights over. Then if they charge too much for sci-fi author A, you can go to publisher B who holds sci-fi author B's copyrights. If B is substitutable for A, and B will be, to some extent, then a low enough price will force the publisher of A to also lower their price. When they all get together, they can set prices for all books, and this is illegal.

    * Collusion on the part of the re-sellers (e.g. apple, Amazon), who hold no copyrights. Whenever anyone says, "I will charge a fixed markup", they run the risk of being undercut by someone else who is willing to take a smaller margin. Unless the first person colludes with the (monopoly) supplier, so that whenever the competing re-seller tries to lower their markup, the supplier jacks up the price to the re-seller or refuses to supply the re-seller until the re-seller gets the message that he must charge the same fixed markup. Incidentally, this is why there were multiple lawsuits over "MSRP" -- suppliers aren't supposed to have the power to set retail prices, and retail stores need to have the right to try to undercut each other by lowering prices to the end user. But when the original good has a sole supplier, there is always the possibility of producer forcing retailers to sell for a certain price by withholding supply or charging more to those retailers that offer discounts.

    Whether or not the DoJ can *prove* collusion is one thing, but looking at the behavior or prices its pretty clear that illegal collusion is occurring, this despite the fact that that books are copyrighted.

  • by hairyfeet (841228) <bassbeast1968@NOspaM.gmail.com> on Sunday May 27, 2012 @06:09PM (#40130733) Journal

    But that argument not only doesn't work it frankly has NEVER worked. How many here boycott the big labels? I know i haven't bought a big label CD anywhere but the occasional yard sale in over a decade. How many here boycott games with always on DRM? Or Apple because of their walled garden? didn't stop D3 from backing up the money truck or make those lines for the latest iDevice any smaller now did it?

    The ONLY way such a thing could work was if you had a spokesman with enough charisma to make the MASSES boycott, otherwise the only person being deprived is you. Hell they'll just blame the lost sales on piracy anyway and get ever more draconian laws passed, so its not like you are hurting them any.

    As for TFA, isn't it about time for an antitrust investigation into Apple? Lets face it they have enough control over mobile that they could kill flash and get businesses and academia to suddenly support iPads. Remember folks you do NOT have to have 100% to be considered a monopoly, just that you can exert influence upon the market and I doubt even the most ardent iFanboy would refuse to admit that Apple can shape the market. Sure there are plenty of Android devices out there but they are fragmented among dozens of OEMs fighting over the scraps while the big cheese has been and probably will be Apple.

    So I say its time for the DoD to take a look at possible antitrust, hell they exert more on an iron grip on the software ecosystem of Apple devices than MSFT did in their wettest dream and if they are using the huge mobile market to muscle their way in and control prices? Well then I'd say now is a perfect time to look at the bigger picture and see what is going down at Cupertino. It might even be good for Apple in the long run, after all after MSFT got spanked and had to watch what they bundled we ended up with more software for Windows than ever because companies didn't fear being crushed like a bug.

    But their argument sucks, replacing one controlling corp with another controlling corp ain't exactly an improvement and if they are using their control of the huge appstore market to sign exclusives and set prices that an ebook can be sold to a competitor? Yeah i'd say its time for an antitrust investigation.

  • by AngryDeuce (2205124) on Sunday May 27, 2012 @06:32PM (#40130835)

    Exactly. Consider the entire romance genre. The vast majority of them are the literary equivalent of a Happy Meal and I know many women who buy a dozen a month and blow throw them as if someone may steal it from them.

    Ever read anything by V.C. Andrews? An ex-girlfriend goaded me into reading one of her books and I didn't even finish due to how fucking sick it was, and I've been reading Stephen King and similar since I was in 3rd grade. She must have really enjoyed reading about rape and sexual abuse or something...

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