If someone puts something for sale at a certain price and you decide to buy it for that price how is anyone harmed? Now if it was something like health insurance that you are forced to buy under physical threat that's a different story.
You can set your own prices however you want. What you can not do, and Apple did, is make it so all your competitors must raise their prices to match yours.
They did not force any competitors to raise their prices. Anybody was free to offer their book for a lower price, as long as they offered the same low price on the iBookStore.
Completely wrong. Amazon and everyone else were NOT free to offer the books for a lower price, that is the whole point.
In the normal wholesale model, the retailer and wholesaler negotiate a price for the retailer to by the goods. The retailer can then retail those goods for whatever price they want. If some retailer wants a 30% profit on the item, another retailer can take 20% and beat them on price. That is competition.
In a normal, non-fixed, agency model the producer and retailer negotiate the markup. The producer sets the retail price and gives the retailer a cut of it. If the retailer takes a smaller cut, then the retail price they sell for can be lower. That is competition.
What Apple and the publishers did was make it so that no matter how little cut another retailer would take, the retail price was never below Apples price, and they ALWAYS got 30%. There is no opportunity at all for another retailer to beat Apple on price, and Apple has absolutely no risk because they always get their 30%. That is about as uncompetitive as you can get.
How is this illegal? (Score:2)
If someone puts something for sale at a certain price and you decide to buy it for that price how is anyone harmed? Now if it was something like health insurance that you are forced to buy under physical threat that's a different story.
Re: (Score:3)
You can set your own prices however you want. What you can not do, and Apple did, is make it so all your competitors must raise their prices to match yours.
Re: (Score:1)
They did not force any competitors to raise their prices. Anybody was free to offer their book for a lower price, as long as they offered the same low price on the iBookStore.
Re:How is this illegal? (Score:3)
Completely wrong. Amazon and everyone else were NOT free to offer the books for a lower price, that is the whole point.
In the normal wholesale model, the retailer and wholesaler negotiate a price for the retailer to by the goods. The retailer can then retail those goods for whatever price they want. If some retailer wants a 30% profit on the item, another retailer can take 20% and beat them on price. That is competition.
In a normal, non-fixed, agency model the producer and retailer negotiate the markup. The producer sets the retail price and gives the retailer a cut of it. If the retailer takes a smaller cut, then the retail price they sell for can be lower. That is competition.
What Apple and the publishers did was make it so that no matter how little cut another retailer would take, the retail price was never below Apples price, and they ALWAYS got 30%. There is no opportunity at all for another retailer to beat Apple on price, and Apple has absolutely no risk because they always get their 30%. That is about as uncompetitive as you can get.