Justice Department Calls Apple the "Ringmaster" In e-book Price Fixing Case 192
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."
Interesting (Score:4, Insightful)
Such activities involve a pretty large number of people. It's interesting how they collectively can keep it a secret for a pretty long time.
Except its not true (Score:2)
Such activities involve a pretty large number of people. It's interesting how they collectively can keep it a secret for a pretty long time.
It is was published in his biography. This has been going on for forever.
Re:Interesting (Score:4, Insightful)
Such activities involve a pretty large number of people. It's interesting how they collectively can keep it a secret for a pretty long time.
It wasn't a secret so much as thinking the government wouldn't come after them for it. Everybody knew about it.
Comment removed (Score:5, Interesting)
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when in reality it was simply Apple making sure nothing ran on Apple hardware that they didn't get a cut.
Yeah, it totally sucks that I can't run Flash and Silverlight on my Mac. Oh wait, I can install both with zero restrictions outside of Adobe and Microsoft's license agreements. Apple sells more than the iOS devices.
Regardless, Flash is still a huge piece of shit, and everyone should be happy with it's demise. It's a zero-sum change moving from DRM in Flash / Silverlight to DRM in HTML5, except that it
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Such activities involve a pretty large number of people. It's interesting how they collectively can keep it a secret for a pretty long time.
Actually, such conspiracies involve a surprisingly small number of people. 1 from each company and maybe their aide.
A large number of people may be involved in the activity, but not the conspiracy so they wont know what is going on, sometimes even the companies CEO doesn't know whats going on.
But this is for traditional price fixing, Apple's been quite open about setting a minimum price for e-books for some time. You may remember a few years back they threatened publishers with banishment if they sold
Re: Interesting (Score:3)
The difference? Amazon didn't get caught. Yet.
Provide the proof (Score:4, Interesting)
Did you read the article. "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." http://thehill.com/blogs/hillicon-valley/technology/299875-doj-accuses-steve-jobs-of-being-ringmaster-in-price-fixing-scheme [thehill.com]
Amazon didn't get caught because its done nothing wrong. (well its done lots of things, just not in this instance)
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Sounds like Amazon's monopoly was broken. What's the problem with that again?
Think of the Children (Score:5, Insightful)
Sounds like Amazon's monopoly was broken. What's the problem with that again?
Amazon gained its market share by competing on price, Apple got forming a cartel with publishers using price-fixing.
The bottom line is non-apple customers are being hurt by this, including children.
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If someone bought from Amazon before Apple got into the business, and then continued buying from Amazon after Apple got into the business with the same or lower prices, how did they get hurt again? It's not like e-books are a finite commodity.
You might be able to make an argument for Amazon getting hurt, but I don't see it for the non-Apple customer.
Re:Think of the Children (Score:5, Insightful)
Did you not read the article? Prices went up. Sellers agreed to only sell on an agency basis and not a wholesale basis. Please tell me how this is good for consumers? And the reason prices went up? Apple colluded with publishers to remove their books from Amazon if Amazon would not agree to sell at a higher price. How is that not price-fixing?
Re:Think of the Children (Score:5, Insightful)
Price fixing does not require a monopoly to be illegal. The FTC routinely targets price fixing in the DRAM market and there is no monopoly in that highly competitive market. In fact there have been at least 3 lawsuits by the FTC that I'm aware of that targeted price fixing in the DRAM market.
All your other arguments are meaningless against that one simple fact. Price fixing in collusion with others to force set prices in a market is illegal and has been for a very long time. Stop being a bloody fanboi, Apple colluded with the publishers and as a result eBook prices went up significantly. It's Apple's collusion that caused eBook prices to rise above the pricing for dead tree versions. If you had purchased eBook's before Apple's illegal market manipulation you would know that you could routinely purchase eBooks for less than half the paper price and after the manipulation paper was often cheaper. That's the height of market manipulation, This market manipulation cost the American book purchasers Billions. Apple shouldn't just have to pay money, the people behind it should be given prison terms.
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Re:Think of the Children (Score:5, Informative)
No, but it is "price fixing".
This is something you have made up. Price fixing can be illegal in the absence of a monopoly.
Again, you failed to RTFA:
Looks like a clear example of Apple using its app store to leverage agreements on prices.
Your frequent remarks about monopolies are pure strawman arguments. Probably invented by you because of your blind support for Apple.
That claim is refuted by the facts. Publishers were able to do exactly what you claim they could not: "gone with Apple's offer".
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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This reads an AWFUL lot like talking points handed out by publishers' PR departments (vetted by, and with contributions from, legal). I mean, that's what I would say if people called me on unwarranted 600% markups on a product. And if all the other publishers wanted to mark up the automated transfer of digital files so that the cost to the consumer was the same as for the purchase, printing, warehousing, and distribution of paper books...why no "collusion" there! That's just coincidence!
And do you really ex
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The trouble, of course, is that their lowest price was higher than the previous lowest price.
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I admire your well-crafted rebuttal! Just one note:
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.
Many readers here may have been brainwashed in grade school into believing that monopolies are always harmful. That's certainly one type of monopoly, which usually exists because of some artificial grant to it by a State, but it's also possible (and we have had) monopolies which exist simply because one co
Re:Think of the Children (Score:5, Insightful)
The collusion and price fixing was not between the publishers. The collusion and price fixing was the switch to the agency model and the guarantee that nobody could sell books to the public for a lower price than Apple. Amazon was using it's clout to force prices down. Apple was using it's clout to force prices up - for EVERYONE. As to the anti-trust aspect - there is no law against being the biggest at something. There is no law against being a monopoly at something. There IS a law against using the fact that you are dominant in one area to use anti-competitive tactics in a different area. It does not matter at all even if Apple had 0% of the ebook market. What mattered is that they used there dominant position in one market (mobile apps and iTunes) to make it impossible for anyone to compete with them in a different market (ebooks). How did they make it impossible to compete? By fixing the price.
Re:Think of the Children (Score:5, Insightful)
Are you really that stupid? Price fixing is when a MINIMUM price to the public for A PARTICULAR ITEM has been set. Since two publishers do NOT sell the same books, how could they possibly be in collusion? The price was fixed because Apple had a deal that NOBODY could sell to the public at a price lower than they could. The collusion was between Apple and the individual publishers. It was collusion because Apple said 'We can sell all the books you like, at a higher price than you are getting now. Stop wholesaling to everyone else and switch to the agency model. And once you do that, make sure nobody can sell your book at a lower price than we can'. If you can't see what is wrong with that, there really is no hope for you.
The point is not that 'Book A' costs exactly the same as 'Book B'. The point is that NOBODY can sell 'Book A' for a lower price than anyone else.
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Ohh, Wikipedia. Well, you got me there.
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The problem with your definition is that minimum advertised price (MAP) policies are generally considered to be legal (since about 2008), and they're unfortunately fairly common—Canon and Nikon, many major clothing companies, etc. There's little difference between a typical MAP and the agency model with a "most favored nation" clause beyond that a reseller is requiring the manufacturer to set a MAP in order to sell through that channel. If the MAP itself isn't anticompetitive, then neither is an MF
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how was amazon a monopoly?
I don't understand how you glance over or through this fact?
you can lower prices to whatever the shit you want, but individual deals with every publisher is what this wasn't. Low prices are not by themselves predatory, even at $0. This was collectively agreeing to the same thing and signing for it individually.
Re:Think of the Children (Score:5, Insightful)
Sounds like Amazon's monopoly was broken. What's the problem with that again?
Amazon gained its market share by competing on price, Apple got forming a cartel with publishers using price-fixing.
Amazon had a monopoly which they used to abuse the publishers. Apple made separate deals with each publisher (which is not collusion or price-fixing) which broke Amazon's monopoly.
This is exactly how the market is supposed to work. Where once there was one eBook provider, there are now four major providers. Apple is not even the biggest one! How can that be a monopoly or even a trust?
The bottom line is non-apple customers are being hurt by this, including children.
Seriously, how can you say something like this with a straight face? That's straight-up trolling.
Prices went up 50% in a single day when this agreement went into effect. Regardless of the free market principles of the thing, every consumer lost.
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The bottom line is non-apple customers are being hurt by this, including children.
Seriously, how can you say something like this with a straight face? That's straight-up trolling.
Can you, with a straight face tell me that Apple's competitors have no customers under the age of 18?
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Sounds like Amazon's monopoly was broken. What's the problem with that again?
One problem is that prices went up 50% literally overnight when Apple got all the publishers to agree to force Amazon and other sellers to charge more.
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One problem is that prices went up 50% literally overnight when Apple got all the publishers to agree to force Amazon and other sellers to charge more.
Two problems there. First where's the evidence that eBook prices went up at all, let alone 50%. People have found individual cases of books that went up, and books that went down. 50% is far too round a number to represent anything other than somebody making up statistics on the spot.
For their part, Apple claims average ebook price went down from $7.97 to $7.34. Can you prove them wrong?
Secondly, you repeat the Justice Department's assertion that Apple orchestrated price fixing. It's an allegation not a fac
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The Justice department claims that Apple is the ringmaster in an ebook price fixing case. Can you prove them wrong?
For my part, I'll trust the justice department
For my part, I won't pre-judge the court-case. But I will challenge some clearly bogus claims by people here such as ebook prices "went up 50% literally overnight",
And other bogus claims such as "yet the only one you respond to (which also does a great job of showing how wrong you are) you dismiss because it makes a "think of the children!" argument." There are very few posts that I don't respond to. The only real exception is ACs, I usually ignore them.
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Sounds like Amazon's monopoly was broken. What's the problem with that again?
Monopolies aren't necessarily a bad thing. Instead of Amazon having a "monopoly" and charge decent prices. Apple and the Big 5 formed their own "monopoly" and charged higher prices... So in this case, for the consumer, it was a very bad thing
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Such activities involve a pretty large number of people. It's interesting how they collectively can keep it a secret for a pretty long time.
It's even amazing that the "fixed" prices are not essentially different than Amazon or Alibris or BN. Very clever price fixing indeed.
BS they weren't 'different'. They were SIGNIFICANTLY higher. At least $3 to $5 higher under the 'agency' model, which on a book that was $9.99 is a 30 to 50% price hike.
Are you some Apple fanboi or something?
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Such activities involve a pretty large number of people. It's interesting how they collectively can keep it a secret for a pretty long time.
It's even amazing that the "fixed" prices are not essentially different than Amazon or Alibris or BN. Very clever price fixing indeed.
BS they weren't 'different'. They were SIGNIFICANTLY higher. At least $3 to $5 higher under the 'agency' model, which on a book that was $9.99 is a 30 to 50% price hike.
Are you some Apple fanboi or something?
Your pulling monkeys out of your butt. Here's an actual price comparison:
http://paidcontent.org/2012/09/11/apple-is-already-fighting-amazon-in-the-ebook-price-wars/ [paidcontent.org]
ht [huffingtonpost.com]
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It's even amazing that the "fixed" prices are not essentially different than Amazon or Alibris or BN. Very clever price fixing indeed.
The "fixed" prices were drastically different than the prizes Amazon WAS offering. After the prices were fixed... well they were fixed.
Re:Interesting (Score:5, Informative)
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.
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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.
No that is not price fixing. Walmart and Amazon and everyone else with clout signs contracts that say they must always be given the lowest price. And nearly all goods makers have contracts with sellers that fix the lowest price a good can be advertised at. (that's why you see those signs on web pages that say "add to cart to see price"-- cause they can't advertise it.
Re:Interesting (Score:5, Insightful)
Yes, Amazon and Walmart, etc have contracts that say THEY will be given the lowest cost. However, Amazon, Walmart, and everyone else can set whatever price their customer pays. Prices are not 'fixed' in that scenario. One retailer may use their lower cost to lower the price for their customers, someone else may use their lower cost to increase their profits. Even someone who was not given a lower cost can sell to the public for a lower price than Amazon or Walmart if they want. In the agency model, the PUBLISHER sets the price the final customer, not the retailer, pays. And the deal with Apple (nobody gets less of a cut than us) means that even if Amazon were to say 'Apple is getting a 30% cut, we'll take 20%, cut our customers price accordingly', they publishers can't do it. The price has been fixed.
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Every point in your post is wrong.
Under the Apple deal, there is NO WHOLESALE. The publisher sets the price the customer pays, and gives the retailer a percentage of that. Therefore, a retailer CAN NOT undersell Apple. Even if a retailer was willing to take a loss on the book, that just means the publisher gets more money, because the price to the consumer stays the same.
The agency model (which Apple got the publsihers to switch to) is like a real estate agent. The homeowner (publisher) sets the price o
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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.
Good thing Apple has $100 billion on the bank. They might need it.
Apple need to do no evil (Score:4, Informative)
...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.
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Using a 'favoured nation' policy to force suppliers to charge Apple's cut to non-Apple customers or eat the cost is an abuse of their market position (more-so at the time than now) and should be very illegal.
Re:Apple need to do no evil (Score:5, Funny)
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Proposed penalty: Full access to Apple's internal iOS APIs. App store unlock. Apple cannot develop software that other companies cannot develop.
That's how Microsoft has to operate with their monopoly in the OS market. The guys working on Office cannot use an API call that the guys working on Windows has not disclosed.
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violations of Section 1 of the Sherman Act, 15 U.S (Score:4, Interesting)
http://online.wsj.com/public/resources/documents/ebooks04112012b.pdf [wsj.com] from the filing
"The purpose of this lawsuit is to enjoin the Publisher Defendants and Apple from further violations of the nation's antitrust laws and to restore the competition that has been lost due to the Publisher Defendants' and Apple's illegal acts. Defendants'
ongoing conspiracy and agreement have caused e-book consumers to pay tens of millions of dollars more for e-booksthan they otherwise would have paid"
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They broke a monopoly, which is not only legal, but generally considered beneficial.
They did not break a monopoly. Amazon was already loosing share to B&N prior to the Agency model.
They used an existing model, which is legal.
Just because something is existing doesn't make it legal. ITunes is probably also illegal. That is why Apple is fighting this.
So what did they do wrong?
They raised prices. Anti Trust laws are about keeping prices low.
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Laissie Faire?? (Score:1)
Meant to type Laissez Faire - D'oh! (Score:2)
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It's acceptable to grammar nazi myself, isn't it? :-)
lazy fare.
Re:Laissie Faire?? (Score:4, Informative)
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]
Re:Laissez Faire?? (Score:1)
Re:Laissie Faire?? (Score:5, Informative)
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.
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"What I understand of the agreement seems pretty clean from Apple's perspective, but not as much for the publishers."
Which is of course why they've been accused of being the ringmasters, because it's clean from Apple's perspective.
Still, it's not as if the people who called Apple the ringmasters in this case are legal professionals or anything is it. At least we have a random Joe on Slashdot to clarify the situation who obviously knows the law better.
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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]
No it's not. Almost every major retailer insists on the lowest price. Walmart does, Amazon does.
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Hmmm... You know that's exactly what is in all government contracts too, right? You can't charge anyone less than what you charge the government for the same thing. Sounds kind of similar.
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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]
The definition isn't that long. Here it is:
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Putting pressure on your suppliers is not predatory or illegal. Every successful business pressures it's suppliers. Sometimes the pressure is cost, sometimes delivery, sometimes quality, etc. You may as well complain that the consumers are the real predators here, because they are the ones who want the low prices from Amazon, Walmart, etc.
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From what I understand, apple and publishers basically all wanted to set ebook prices for the range of 12.99 to 14.99. Apple threatened to (and did) block apps for publishers that didn't agree or didn't jump on board right away, as leverage. It's kind of a big deal because Apple was hoping to negotiate things in a way to prevent wholesale outlets, like Amazon, from having a choice in setting ebook pricing by having having deals with all the publishers that released all the ebooks through Apple first (at f
Re:Laissez Faire?? (Score:1)
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It's worth noting that all of the publishers have settled with DoJ without a fight.
It's worth noting that Apple hasn't. You do realise the publishers may have colluded without Apple's involvement.
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The issue is how much collusion was there between Apple and the publishing companies to set these prices--which, according to the e-mails, was quite a bit. Apple was working to craft an agreement that all the publishers would agree to, not individual agreements with the publishers. That's collusion.
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Not defending Apple's pricing, in fact I think that they are in many ways douchebags, but why is this an antitrust situation? They are negotiating with vendors to reach the price point they desire. They are just reaching for a higher price point, instead of a lower one. .... If Apple's customers are such zealots that they won't consider other sources for their media, let them pay the prices.
Well whether you are a zealot or not, you don't have a choice BUT to pay Apple's prices. Even if you want to buy from Amazon. This wasn't about Apple setting a higher price point for Apple, this is about Apple forcing the publishers to set a higher price point for EVERYONE.
Its a Mac article (Score:2)
...but don't let it put you off. http://www.macstories.net/stories/understanding-the-agency-model-and-the-dojs-allegations-against-apple-and-those-publishers/ [macstories.net] It basically explains the two things "agency Model" and The most favourite nation clause (which is what you talk about).
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What behavior?
Price fixing.
When Hynix et al. got done for RAM price fixing you didn't defend them. When Samsung got done for LCD price fixing, I'll bet you didn't defend them.
Price fixing is anti competitive and illegal. It's illegal because it harms consumers and producers.
Tim Cook should go to jail? For making sure no-one else was allowed to sell books for less than he did?
Fixed that for you.
It sounds quite a bit more serious when you say what is actually going on.
Whilst jail is a bit of an over-reaction (not nearly as bad as you "B-B-B-But Apple is god and can do no wrong" knee jerk response) this does need
Fair Vertical Price Fixing (Score:1)
Vertical price fixing pertains to arrangements between a manufacturer, distributor, supplier or retailer. Horizontal price fixing, which would involve competitors colluding to set prices, remains illegal. Courts have held that vertical maximum price fixing, like the majority of commercial arrangements subject to the antitrust laws, should be evaluated under the rule of reason. Therefore, suppliers of goods and services don't necessarily violate antitrust laws by setting maximum prices their retailers can charge.
http://definitions.uslegal.com/p/price-fixing/ I don't like Apple, as in refuse to buy their products and services, but this seems like Vertical price fixing which seems fair as this agreement guarantee's Apple prices are fair within the market of that particular eBook.
Cartel (Score:1)
I don't like Apple, as in refuse to buy their products and services, but this seems like Vertical price fixing which seems fair as this agreement guarantee's Apple prices are fair within the market of that particular eBook.
As a long time and faithful Apple user. this is about a Catel http://en.wikipedia.org/wiki/Cartel [wikipedia.org]
"A cartel is a formal (explicit) "agreement" among competing firms. It is a formal organization of producers and manufacturers that agree to fix prices, marketing, and production.[1] Cartels usually occur in an oligopolistic industry, where the number of sellers is small (usually because barriers to entry, most notably startup costs, are high) and the products being traded are usually homogeneous. Cartel members
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"agreement" among competing firms.
But they don't fit the definition of cartel. The agreement is not between Amazon and Apple. It's between Apple and someone selling an eBook.. If Apple and Amazon had an agreement, as in a Horizontal price fix, then it would be a cartel. If I were to have a book on the store, I could prize my book at $20 on Amazon, and if tell apple they can sell it at $25, they have the right to not allow purchases through their store. Im not sure why someone would do that other than the hope people probably blindly buy
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Is there any case where a price floor has been found to be illegal? Apple is providing them with a "service" of advertising and purchasing. They aren't forcing companies to sell their product on the iStore.
From the Sherman Act
"The agreement to inhibit price competition by raising, depressing, fixing, or stabilizing prices is the most serious example of a per se violation under the Sherman Act. Under the act, it is immaterial whether the fixed prices are set at a maximum price, a minimum price, the actual cost, or the fair market price. It is also immaterial under the law whether the fixed price is reasonable. All horizontal and vertical price-fixing agreements are illegal per se.
How would you punish Apple? (Score:3)
According to their latest 10-Q filing AAPL has about $140Billion in cash and cash equivalents... and make $70B in gross profit every year...
Short of breaking them up... there's no monetary punishment you could levy on AAPL.
While they're not too big to fail, they are too big to punish.
It's like your grandmother spanking a grown elephant, it won't do any good other than make a bit of noise.
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I don't even care if they hurt Apple. I just want things to be good for consumers again. Force the publishers to have to negotiate again on an individual basis. Thats all I, the customer, care about. Apple can do whatever the hell it wants, as long as it is legal.
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Well, if a man would be sent to prison for 5 years for such an infraction, I presume that the penalty would be 5 x $70B = $350B. What's so difficult about that?
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If a crime was committed you need to punish the *people* who did it.
If I had free choice of punishments i'd say chain them up in the stocks for a week or two and let people throw rotten fruit at them. Then send them to do hard labour for a year or so in a remote mining camp with the condition that any attempt to access or borrow against the wealth they have in their life outside punishment will result in permanent confiscation of that wealth. Visits from friends and family would be allowed but at least half
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Heh,
I thought, "send them off for a few years of hard labour", then my brain started thinking though how such a sentance could work in the modern world. Forbidding their friends and family from contact completely would be too cruel IMO, OTOH having rich friends and family jetting in all the time and bring expensive gifts wouldn't seem like much of a punishment.
I don't belive conventional prison is appropriate for most white collar criminals but I do belive they need to have their luxuries taken away and be
The iPhone ringmaster? (Score:2)
Fix it by legalizing file sharing (Score:3)
We can argue all we want about just who colluded with whom, but why not fix the root problem? Digital data are always going to be copied (and copy-able), and the sooner the law recognizes that, the sooner publishers as well as retailers (including Apple and Amazon) will adjust their prices to what people are willing to pay. As a close friend said to me,"Keep finding me free epubs on the net until the store price drops below $5." iTunes, for example, continues to sell a zillion tracks despite the plethora of torrent files available. The same model (i.e. acceptable price point) will work for books.
Except its not. (Score:4, Informative)
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.
Re:Except its not. (Score:4, Insightful)
Man I fucking love using market share as metric! Since it is a unitless number it can be used to say anything you want. So under the old model, Amazon controlled 90% of the [market for eBooks]. After publishers instituted their new pricing scheme Amazons market share fell to 60% of [the market for eBooks]. That sounds absolutely terrible!
Unless of course you realize market share is a unitless number that doesnt tell us jack shit. Before publishers changed their prices we dont know what the size of the eBook market was so we dont know what Amazons unit sales or dollar sales were for that time period. After publishers changed their prices we still dont know what the size of the eBook market was so were still unable to tell what Amazons unit or dollar sales were.
Without knowing Amazons unit or dollars sales it is impossible to know if they were materially affected by the change in publisher prices. With Apple entering the eBook retailer arena and thus bringing an eBook store to many tens of millions of iPhones, iPods, and iPads they very likely increased the overall size of the eBook market. Google also entered the fray selling books and magazines in this period of time.
Google and Apple selling eBooks likely increased the total size of the eBook market which means unless Amazons sales grew in that same period at the same rate as the total market their share of that market could only decrease. This isnt rocket surgery. Market share simply cannot show that competitors ate Amazons market share or if their share decreased from market growth. As such market sahre cant possibly be used to show that publishers changing their pricing model positively or negatively affected Amazon. This isnt about defending megacorporations but about not using stupid numbers to make definitive arguments.
Market share means market share. (Score:1)
Man I fucking love using market share as metric! Since it is a unitless number it can be used to say anything you want
No market share means just that market share. If you want to express a number meaning % of the market irrespective of the size of the market you would use that. In this instance its the perfect metric.
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"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."
SO Amazon's near monopoly was broken. Good thing.
Its not amusing at all. Amazon dominate by competing on old fashioned things like price, Not being corrupt.
That's about as rational as saying the same thing about Microsoft and Walmart.
I find it sick that your defending a mega corporation (again)
Kind of how you're defending Amazon, the book monopolist.
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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.
It's quite... fascinating, how you can defend a monopoly and demonize the company that broke the monopoly, doing the very thing you just defended the monopoly for doing in the first place!
Apple entered the book market and competed against Amazon doing the very thing you laud Amazon for doing: they competed on price!
That's some highly potent fanboy fanaticism in action!
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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.
It's quite... fascinating, how you can defend a monopoly and demonize the company that broke the monopoly, doing the very thing you just defended the monopoly for doing in the first place!
Apple entered the book market and competed against Amazon doing the very thing you laud Amazon for doing: they competed on price!
That's some highly potent fanboy fanaticism in action!
Apple did compete on price - they competed by demanding that every publisher raise the price of all ebooks by 50%. Publishers were happy to oblige. Amazon wasn't hurt - they still dominate the market. The only people who lost were consumers (like you!). People like you lost big time. Go cheer for the people who beat the shit out of you some more. It amuses them.
Re:Except its not. (Score:4, Insightful)
I'm 100% positive that that's absolutely not what happened. Funny sense of re-writing reality you have there. I've heard a term for that before, I'm sure you bandied it about before...
RTFA. That is exactly what happened, well at least the spirit of things. They told the publishers that they could set their own prices, but no one is allowed to sell for lower. This helped Apple, since they didn't have to fight over price (with their ridiculous mark-up) with Amazon (with their huge market share, and existing infrastructure, and contracts). It didn't do much to Amazon. But it screwed consumers.
90% to 60%, and no longer able to bully the publishers around to the same extent as before. I don't know how you can think that doesn't count as being "hurt". Perhaps if that three-letter term I referenced above would come to me, what is it?...
So basic economics is only useful as long as it doesn't hurt your favorite company? Amazon had a larger customer base, more infrastructure, more experience, more contacts, and thus more buying power. Normally this would mean they could leverage lower prices. But... being that this wasn't good for Apple, this is wrong now?
None of this really matters though, all that matters is if Apple actually engaged in price fixing. Which is illegal. And has been for a long time. Nintendo got busted for it in the 80's. The RIAA got busted in the 90's. So if Apple did the same thing, they should get busted now. Being a bully is legal. Price fixing isn't. Look up the definition of "price fixing", look up the actual facts of the case... This is all that matters, not what you feel about Amazon, or Apple.
You mean how I now have more plentiful options for eBooks? Wow, I'm soooooo hurt!
Before this there were multiple sources of ebooks. But... and this is all that matters to me, they were at different prices. Amazon might be cheaper, or Kobo, or Barnes and Noble, or... even Apple. Now we might have more sources, but who cares, they all cost the same (too much). Not that it matters to me anymore, I refuse to buy ebooks until they actually cost as much as I see their worth (less than actual books, since they aren't material, I don't own them, they aren't permanent, and I can't share them, and if Apple or whoever don't like me they can make them go away). Back before Apple screwed us, I loved them. Now... I'm waiting for the law, or publishers, to realize that the writing is on the wall.
They've offered products which I've willingly paid for.
At an artificially inflated price. And you have no choice than to pay that price, unlike almost any other product in the world. The real book, I can get cheaper, I can get discounted, I can get as a loss-leader, I can get clearance, I can get second hand, or at near wholesale... The ebook, I can't.
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Competing on price is an understatement. Amazon was losing money on purpose; it's more fair to say Amazon was competing via predatory pricing [wikipedia.org]. Lose money on books now until everyone else has been run out of business, then significantly raise the prices once they're the only game in town. The outcome of that would have been something that would have benefited no one but Amazon.
On a side note, the wholesale model doesn't
Re:Except its not. (Score:5, Insightful)
It is dirt cheap to sell ebooks. There is almost no barrier to entry at all, especialy for an established retailer. Therefore, your scenario can't happen, because as soon as Amazon raises the price the competitors will re-appear. Yes, in some industries predatory pricing is a real problem. Ebooks is not one of those industries.
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Um, people who SELL ebooks in competition with Amazon don't produce them. Authors and publishers produce them. You did know that, right?
Re:Except its not. (Score:4, Insightful)
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Let's say the eBook market before Apple's entry was 1,000 sales (it wasn't, but it makes the math easy), and they had 90%. That means they sold 900 eBooks.
If Apple enters, and the market increases by 50%, and Amazon still sells the same 900 that they did before (assuming flat growth without the customers Apple brings to the market), then they now have 60% with the exact same amount of sales.
Market share numbers are useless without knowing total sales volume within the market, and period-over-period growth
Re:But Amazon is of course a saint (Score:5, Informative)
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:But Amazon is of course a saint (Score:4, Informative)
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What is wrong with being a monopoly? Simply being a monopoly is not a problem, and is not illegal. What IS illegal is when the power of that monopoly is used to gain an unfair (anticompetitive) advantage in a DIFFERENT area.
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If the ends and the means involve more freedom and consumer choice, then yes.
The freedom to pay more? More choices at the exact same inflated price?
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More and consumer choice is a useful tennet of capitalism when it means prices are pushed down by competition.
But as in this case because of Apple and co's practices the prices have gone up then the tennet of increased consumer choice is irrelevant.
It's also dishonest to say it gave customers more freedom. It may have given them more choices to purchase from, but it gave them less freedom in terms of what price to pay.
Books are precious (Score:2)
Price fixing e-books? Yippie disposable income doesn't actually rate at this point; we have bigger problems.
Yeah it kind of does. Ignoring the fact that this is also about protecting education...and history has taught us how important that is, and well books are kind of a big deal from a political perspective..from an information perspective...its why people want to burn them. This is an open attack on capitalism, and on the consumer by Apple which needs an immediate ban on Apple products. Books are precious
It is not only important, but Apple employees need to start being Jailed starting with the board.
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A tried and true false equivalency argument. Afterall, if the world isn't perfect we can't think some things are bad and deserved to be punished. But why are you worried about those silly little Justice department issues when there are so many other important issues? See, false equivalency can get you too, until world peace exists and everyone lives in a mansion there are far bigger problems than tackling the real crime we can prosecute today.
Apple cost the American book buying public Billions in increased