Apple E-book Price-Fixing Trial Begins 213
An anonymous reader writes "Technology giant Apple is to begin its defence against charges by the US government that it tried to fix the prices of e-books. The iPad-maker is accused of working with publishers in 2009 to set prices in an effort to compete in the e-book market dominated by Amazon. Quotes from Steve Jobs' official biography have been cited as evidence in the case."
cheaper books? (Score:4, Insightful)
Re:Still confused (Score:5, Insightful)
Re:Stupid case (Score:4, Insightful)
That Amazon's business model is anti-publisher does not excuse an alternative business model that is rabidly anti-consumer. They're both garbage.
Re:Comments (Score:4, Insightful)
Amazon's ridiculously thin margins aren't a short-term tactic to eliminate competitors. If they were, Amazon would've started hiking up prices in things like books and videogames where they've all but eliminated the competition. Slim margins are the entire (incredibly dubious) business model, and they'll continue with that process, bringing in fractions of cents of profit per dollar of sales, indefinitely.
It ain't healthy for anybody.
Re:Still confused (Score:5, Insightful)
Except that's not what's happening here. It's "I'll sell quantities at a higher price you choose at a fixed margin, but you can't sell via anyone else at a lower price or better margin". That's why it's anti-competitive; the new system they put in place prevents their retail competitors from ever competing on price. To me, that seems entirely unreasonable.
Re:Still confused (Score:3, Insightful)
Re:Comments (Score:3, Insightful)
Ii all Amazon are ever interested in doing is making purchasing / delivery ever more efficient, then isn't that what we'd like to happen? [I don't believe they will restrict themselves to that, but it's pretty hard to see why it would be a problem if they did.]
If not can you explain
-what is the problem
-what you want to see happen
-what does Amazon have to do with it?
Is it "damage to competitors"? The public prefer to buy things for cheaper. The value of a shop floor where they can see or try certain goods is not enough to buy the public's loyalty or to use your loyal core of customers to offset the higher costs. For items which ship in standard sizes/qualities or guessable forms it's even less of a deal (you don't need to "try" a book by your favorite author, just pick paper or hardback).
Is it "the high street"?
For all of the supposed value middlemen always claim they add, a lot of retail stores do or did add add little value - high prices, nothing in stock, little knowledge about their products , crap environments to visit, no used etc - they deserve to go bust. Who should miss years of being gouged on simple things, and paying list price for stuff simply because manufacturers wouldn't ship products or their glossy catalogues direct to consumers?
Is it "warehouse/retail/packing jobs"?
If we end up needing less manual labor - it's hardly fair to blame Amazon, or to expect them to subsidise non-jobs simply because their competitors are crap. We don't need people to carry shit in wheelbarrows through city streets any more either, and I can't see anyone misses that.
Is it a general antipathy towards large corporations? If so it's perfectly understandable, but please don't claim that makes it correct, reasonable, or actionable.
Re:Still confused (Score:5, Insightful)
The case has nothing to do with that. Do you really think that going to a supplier and saying "I'll buy huge quantities at a reasonable price, but if you sell to someone else for less then I instead get that price" is in any way illegal or even unreasonable?
Apple didnt organize fixed wholesale pricing with publishers. They organized fixed retail pricing via publishers.
Not just illegal.. obviously illegal. The fact that you dont see that tells us something about you...
Re:Comments (Score:5, Insightful)
Monoculture, essentially, is the issue. If Amazon was one of a half-dozen ultra-low-margin online retailers, we wouldn't be having this conversation.
Re:Still confused (Score:3, Insightful)
Re:Still confused (Score:5, Insightful)
Would you leave it to companies like Apple or Google they could, like in this example, brute force their ways on smaller business partners.
When you don't trust your politicians, don't complain here but go voting.
Re:Still confused (Score:5, Insightful)
The difference is, there is no evidence Amazon was telling the publishers they couldn't sell their books cheaper elsewhere - that's the crux of the issue with the way Apple was doing it here.
Re:Comments (Score:0, Insightful)
Standard Oil NEVER SOLD AT A LOSS, it's a fairy tale for the ignorant and unintelligent. Standard Oil operated for half a century, lowering prices from about 60 cents to under 6 cents in that time period, the same exact time period that made Rockefeller one of the wealthiest people that ever lived (equivalent of 600,000,000,000 dollars).
I comment on this site that government is the only entity that truly creates monopolies and all of its activities aimed at supposedly 'making market fair' are just corruption and racketeering. [slashdot.org]
I get moderated 'off-topic', that to me is fascinating.
Re:Still confused (Score:5, Insightful)
I can't believe I need to integrate these ideas for you, but here we go: because the publishers set the price in the agency model, and because all of the major publishers colluded to switch to an agency model simultaneously, and because Apple's deals mandated that Apple always receive the best available price, it was no longer possible for Amazon to ever sell an eBook at a price lower than that offered by Apple.
That is an illegal anticompetitive action that reduces competition.
Re:Purchasers. (Score:4, Insightful)
Wrong. You can't make the deal because APPLE has a contract with the publishers that prevents YOU from setting your prices.
You: Mr Publisher, I would like to lower the prices to my customers. To do this, I will take only a 20% cut, you will still make the same money.
Publisher: No can do. We have this deal with Apple that says nobody gets a lower price than their customers. However, since you offered to take only 20%, you will get only 20%, but your customers will pay the same. We will keep the difference.
Re:Still confused (Score:4, Insightful)
If you can't see what's bad about having one retailer decide the minimum selling price for every other retailer in the market, you are beyond help in an economics discussion.
Re:GIVE APPLE THE NEEDLE !! (Score:4, Insightful)
I know it's trendy to hate apple, but the fault lies at the feet of the extremely greedy publishers.
An e-book should be MAX 50% the price of the paper book.
A lot of the troubles of the modern-day world can be credited to "should be". A lot of things "should be", but actual fact makes them impossible.
Before saying an e-book "should be" max 50% of a paper book, I'd want to see an honest breakdown of the true costs of producing the book in the abstract - paper, electronic - or whatever, totalling up the costs of creating the book, making it fit for human consumption, typesetting, marketing and so forth, all while paying all those involved a decent living wage and supplying them with the capital equipment they require. Plus enough profit to make them want to go through it all over again for the next book. If that can be done for half than the approximately $7USD/copy that seems to be about average for USA paperbacks, well and good. but leave the "should be"s out of it. A fair price for a fair product is all that I ask. There are books I haven't bought because I considered them overpriced, and no few of them are ebooks at hardback prices, and there are books that I bought because they were so cheap I didn't care if they were immortal literature or not. Very little of my purchase decision was based on what "should be" the cost of producing them.
Books are not commodities. A work by Terry Pratchett probably costs no more to produce than a bodice-ripper from Harvey Snorkwacker. Less, once purchase volumes start kicking in. However, Pratchett's work has more intrinsic value, and that's something worth paying a premium for. At least as long as it's not too high a premium. The old-fashioned "sell it hardback for a year at a high price first" model doesn't work for me. Even when it was the only game in town, I waited for the lower-cost paperback edition.
Re:publishers (Score:4, Insightful)
To be fair and clear, publishers are scum and this seems to be consistent regardless of the material being published -- research/scholarly journals, books, music, movies/TV and video games.
They are in the business of selling someone else's work and occasionally giving some of that money back to the people who created the content. For the publishers, it's "Money forever" but for the creators, it's "work for hire" and so they don't get money forever unless they somehow managed to cheat the publishers out of it. This type of capitalist vampirism should be outlawed as they don't "represent" the content creators as they so often claim. What we need are agency type arrangements where the publishing agencies can only get like 10 to 15%.
Re:Still confused (Score:4, Insightful)
Oh, I'm sorry, because Apple only suggested their illegal anticompetitive scheme, and didn't dangle the book industry over smouldering cauldrons of acid until the they decided it was a good idea, clearly they're immune from prosecution for their part in an illegal anticompetitive business group that they greatly profited from.
Re:Comments (Score:4, Insightful)
Except by then, everyone would have been using Kindles for ebooks and have significant investments in Kindle ebooks.
Remember, books have DRM, and unless an upstart platform were to offer them DRM-free (try getting publishers onside for that), then people won't bother. The barrier to entry is extremely high and people with Kindles won't want to buy your book reader because it won't read their Kindle books.
Remember what happened a few years ago with iTunes? Prior to it going DRM-free, it was all DRM'd and even worse, no one could sell DRM music that worked on the iPod (the most popular music player at the time). Sure there were competitors, but they were related to crap "PlaysForSure" style stores who more often than not closed shop because of low traffic.
With DRM, once a platform has achieved critical mass, there's no way to break it, short of going DRM-free. It happened for music, but publishers seem reluctant to adopt that model.
And ebooks were sold prior to Amazon releasing the Kindle - Sony did it. But once the Kindle came out, it was pretty much over - the Kindle was superior - easier to get books on it (no PC required), you could get books from anywhere with 3G, etc. So it legitimately took over the market. Except the publishers (like the music industry) were getting unhappy with Amazon's tactics. Apple offered them an alternative that they readily adopted, which pressured Amazon into switching models as well. Of course, the Apple model didn't really do much - other than allow other bookstores to open (besides Amazon's store, there's also the Barnes and Noble Nook, Kobo and iBooks. Even though iBooks is probably the smallest, the fact that other stores have popped up is generally a good thing).
Of course, Amazon isn't in the clear - I come across many "kindle only" books where the author typically takes the "amazon exclusive' offer and with no print option... the only alternatives would be to do without (better) or pirate (I don't have any Kindle books).
Re:Stupid case (Score:5, Insightful)
The publishers were doing fine, and continue to do fine. They still continue to make most of their profits from physical books, btw, which they seem to have no problem selling through Amazon and allowing Amazon to set the price for. In the vast majority of e-book listings, in fact, the PHYSICAL PAPER BOOK COSTS LESS THAN THE E-BOOK, and yet e-book sales account for only 25%-30% of publisher profits.
How exactly, does that work btw? I can buy a CD for $15, but download the album in MP3 format for $9.99. A DVD costs $20, buying the download is $15. Yet only in books is the digital copy routinely priced higher than the physical copy. Yet you want to tell me the publishers are going bankrupt? The same publishers who would gleefully close down all public libraries and have openly accused them of theft? How do you defend these a-holes and feel good about yourself?