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Justice Department Calls Apple the "Ringmaster" In e-book Price Fixing Case 192

Posted by samzenpus
from the paying-more dept.
An anonymous reader writes "Back in April 2012, the U.S. Justice Department filed an antitrust lawsuit against Apple and a number of publishers for allegedly colluding to raise the price of e-books on the iBookstore. As part of its investigation into Apple's actions, the Justice Department collected evidence which it claims demonstrates that Apple was the 'ringmaster' in a price fixing conspiracy. Specifically, the Justice Department claims that Apple wielded its power in the mobile app market to coerce publishers to agree to Apple's terms for iBookstore pricing."
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Justice Department Calls Apple the "Ringmaster" In e-book Price Fixing Case

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  • by tuppe666 (904118) on Wednesday May 15, 2013 @07:56PM (#43736573)

    ...and customers get bent over; thank Apple

    And the rest of us have to pay a premium for its Monopolistic abuse. Call me a hater.

    What is missing from the article is this is saint Jobs corrupt to the core.

    "Jobs explained to his biographer that he told the publishers, "We’ll go to the agency model, where you set the price, and we get our 30 percent, and yes, the customer pays a little more, but that’s what you want anyway.” http://thehill.com/blogs/hillicon-valley/technology/299875-doj-accuses-steve-jobs-of-being-ringmaster-in-price-fixing-scheme [thehill.com].

    Thankfully Microsoft is slowly catching up so we will be back with that evil duopoly again.

  • Re:Laissie Faire?? (Score:4, Informative)

    by kris2112 (136712) on Wednesday May 15, 2013 @08:10PM (#43736665)

    The DoJ's case alleges that the agency pricing model had a clause where the publisher wouldn't sell their books in other stores for less than they were charging in the iBookstore. If true, this is Collusion, and falls under anti-trust laws. http://definitions.uslegal.com/c/collusion/ [uslegal.com]

  • Except its not. (Score:4, Informative)

    by tuppe666 (904118) on Wednesday May 15, 2013 @08:17PM (#43736729)

    http://thehill.com/blogs/hillicon-valley/technology/299875-doj-accuses-steve-jobs-of-being-ringmaster-in-price-fixing-scheme [thehill.com] "Under the old model, Amazon controlled about 90 percent of the market, but after the publishers instituted the new pricing scheme, Amazon's share fell to 60 percent."

    Its not amusing at all. Amazon dominate by competing on old fashioned things like price, Not being corrupt. I find it sick that your defending a mega corporation (again), when the illegal corrupt actions affect everyone.

  • by lucm (889690) on Wednesday May 15, 2013 @08:18PM (#43736733)

    I find it amusing the Apple is accused of being a "ringmaster" when it's Amazon that is in total dominance of the electronic book market and pricing.

    This story is about collusion with publishers, not about market share. Read the article, there is a part where they discuss Amazon.

  • Re:Interesting (Score:5, Informative)

    by bws111 (1216812) on Wednesday May 15, 2013 @08:19PM (#43736737)

    Amazon was operating under a normal wholesale/retail model. They bought from the publisher for some agreed-on price, and sold the books to the public for a price they set (which could be higher or lower than what they paid the publisher). Apple convinced the publishers to stop selling to Amazon and switch to an agency model. Under the agency model, the publisher set the price the public paid, and gave the retailers a cut of that. Apple also managed to write into the contracts that nobody could get less of a cut than Apple. That is price fixing.

  • Re:Laissie Faire?? (Score:5, Informative)

    by aaarrrgggh (9205) on Wednesday May 15, 2013 @08:49PM (#43736911)

    It is all in how you say it; if you say that if the publisher offers a better price to another outlet, they must match that price for Apple, then it is ok. The tricky part is that if Apple's clause says that Apple can match any other retailer's price and give the publisher 30%, but that would seem like it still isn't collusion; it creates a situation where selling to Amazon at wholesale is better than selling to Apple at an Agency model. Hence the publisher's collusion amongst themselves to force Amazon to the agency model.

    What I understand of the agreement seems pretty clean from Apple's perspective, but not as much for the publishers.

  • by ZombieBraintrust (1685608) on Wednesday May 15, 2013 @11:38PM (#43737913)
    Amazon "dominance" was totally a result of them converting their existing physical book customers into digital customers. They were doing this years before Apple even put out the IPad. B&N, and Kobo were also late. They were out there with only Sony as a competitor. So they had 90% share when it was them vrs Sony. Sony didn't have a huge website with millions of book sales. So of course Sony was clobbered. When Amazon main physical book rival B&N came out with the Nook their share went down. Then the Apple launched IBooks and prices went up on best sellers. Then their was the lawsuit. Then prices went down.
  • by whoever57 (658626) on Thursday May 16, 2013 @12:26AM (#43738111) Journal
    And you have the gall to call others posters fanbois!

    That's not a fixed price.

    No, but it is "price fixing".

    1. Apple does not have an app monopoly (required for this to be illegal)

    This is something you have made up. Price fixing can be illegal in the absence of a monopoly.

    2. App "dominance", even monopoly, has no bearing on book sellers (how is Apple supposed to leverage this against them?).

    Again, you failed to RTFA:

    When Random House ultimately signed on the dotted line, Eddy Cue sent an email to Jobs stating that one of the reasons Random House agreed to Apple's terms was because "I prevented an app from Random House from going live in the app store."

    Looks like a clear example of Apple using its app store to leverage agreements on prices.

    3. Even assuming they have a monopoly (they don't, but just for argument's sake), in what way did they exploit this?
    4. It's funny how supposedly "Android is winning", but somehow Apple is a monopoly.

    Your frequent remarks about monopolies are pure strawman arguments. Probably invented by you because of your blind support for Apple.

    5. Publishers could have easily not gone with Apple's offer. Amazon was eBook monopoly at the time (which is exactly why they went with that deal, to leverage against Amazon!), and are still the dominant eBook seller (60% market share).

    That claim is refuted by the facts. Publishers were able to do exactly what you claim they could not: "gone with Apple's offer".

    This was just a shrewd business deal which gave power back to the publishers and busted the Amazon monopoly (which they were actually abusing against other book sellers, and even the publishers themselves!).

    Yeah, great monopoly busting: resulting in increased prices. Yeah, that's the way to go. Don't want those dirty monopolies that result in lower prices.

    Honestly, do you realize how stupid your posts are?

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