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)
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No it's not, it's copyright infringement.
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Re:cheeper bookes? (Score:5, Informative)
Re: cheeper bookes? (Score:3)
Condoming an island country could prove to be extraordinarily difficult.
How hard could it be? It's a reasonably small island, and latex grows on trees!
Re: cheeper bookes? (Score:5, Funny)
Re:cheeper bookes? (Score:4, Funny)
Condoming an island country could prove to be extraordinarily difficult.
It might be easier if it were a penisula.
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What island country are you talking about?
If you mean Vietnam, let me be the first to tell you that Vietnam is not an island. Vietnam lies on mainland asia, just south of China.
They'll be fine. (Score:2)
They'll be fine, with maybe a small fine of much less than the money made from the deals. At least they won't likely get their 'pet' judge this time.
Still confused (Score:2)
Re:Still confused (Score:5, Insightful)
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Wrong choir, son.
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, Informative)
If Apple truly charges 'too much', then it is nothing but an opportunity for an enterprising individual to start a competing business and provide better prices.
And that's exactly the problem here, Apple's exclusive contract forbids the publishers to get into a deal with anyone else.
At least not at a competitive price.
Not about damages (Score:2)
The Department of Justice is not seeking financial damages from Apple if the government wins the case.
http://www.tuaw.com/2013/06/03/apple-doj-ebook-price-fixing-trial-begins-today/ [tuaw.com]
Not really a shakedown for bribes. Your forgetting government power also include contract law. Apple was seeking to control prices with contracts. If the courts enforced those contracts then they would be shutting down competition.
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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.
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Precisely. In the EU, Apple and the publishers have settled to the authorities' satisfaction without having to do away with the agency model. The model itself is not the issue.
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Makes sense. Usually stores just set their own prices, so the store obviously has control over the minimum they sell at. That isn't a problem unless they're in collusion with other stores, or in Apple's case forcing their supplier to do the collusion for them.
Re:Still confused (Score:5, Informative)
Re:Still confused (Score:5, Informative)
Apple's iBook publishing deals included a clause that no other eBook outlet could get a better price than Apple. So, yes, they were engaged in price-fixing that directly favoured them as a seller. In a wholesale bookselling model that's not quite so terrible - you can compete by eating into your margins - but in an agency model where the selling price is set by the publisher isn't allowed to be any lower than on iBooks, you're fucked.
Re:Still confused (Score:4, Interesting)
Don't forget that Apple controls the apps through their app store and competing book reading apps can't purchase e-books through their app like Apple's, you have to open a web browser and go to their webstore to make a purchase.
Re:Still confused (Score:4, Informative)
You can, in principle, sell content through your app using the in-app-purchasing API*, but Apple has to get a 30% cut. Under most "agency model" ebook deals, the publisher gets 70% of the purchase price, leaving the retailer with zero. (This is why the only thirdparty content stores you'll find on the App Store are publisher outlets like Dark Horse, and not retailers/resellers.)
*The IAP API is horribly unsuitable for that purpose, but that seems rather moot.
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You do realize that Amazon is paying $12.99 for new ebooks, and selling them at $9.99 right?
So... what changed now that Apple has a deal with the publishers to sell the book for $12.99 and gets 30% of it?
Can amazon stop selling it at $9.99 regardless of what they paid for it? Or did something else change?
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Yes, something changed. Previously Amazon had a "wholesale" contract with most ebook publishers, meaning Amazon buy the books for $X and sell for $X+Y. The publisher gets $X, and the retailer gets $Y. After meeting with Apple, all of the major publishers - all of them - went to Amazon and stated that their ebooks would only be available on the "agency model" from then on. Under the agency model, the publisher sets a price of $Z, and the retailer and publisher each receive a share of that price (typically 30
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: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: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.
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You do grasp that there was a clause that specifically prohibited publishers from selling ebooks at prices that were lower than on iTunes? Do you not comprehend that this is objectionable? That whatever Apple wants people to pay for books, everyone pays for books, at every ebook store?
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With the Apple deal, it is simply not possible for anyone to beat Apple on the price the consumer pays. Not 'difficult' or 'painful' to beat Apple, impossible.
Only because *IF* the book is sold at a lower price at another retailer, Apple is allowed to lower their price to match. Nothing wrong with that, it's standard practice. Anything other would be denying Apple the right to compete.
http://www.independent.co.uk/news/world/americas/jobs-encouraged-apple-to-work-with-publishers-on-ebook-price-hike-court-hears-8642931.html [independent.co.uk]
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You do realize that Amazon is paying $12.99 for new ebooks, and selling them at $9.99 right?
Nope. Amazon sells *some* eBooks for less than cost. With most eBooks they make some profit.
Please stop spreading the misinformation that Amazon sells all eBooks below cost.
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You do realize that Amazon is paying $12.99 for new ebooks, and selling them at $9.99 right?
Nope. Amazon sells *some* eBooks for less than cost. With most eBooks they make some profit.
Please stop spreading the misinformation that Amazon sells all eBooks below cost.
Isn't Amazon using their volume sales overall to discount popular books below purchase price and effectively shutout competitors that need the profits from the popular books to fund their service anti-competitive too? Sure, in the short term the customer gets a good deal, but long term Amazon's price manipulation will favour them rather than the public. Or am I missing something?
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What possible long-term negative impact could Amazon's low prices have on consumers? The only one I see mentioned is that once they have removed the competitors they can raise prices. That, however, doesn't hold water because selling ebooks has a very low barrier to entry, so as soon as they raise prices even a little competitors will re-appear, forcing prices back down.
The current case has an obviuous and immediate short-term and long-tem negative impact on consumers.
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Driving all other competition out of business isn't good for the consumer in many ways.
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That said, I question the ethics of Amazon's own pricing plan if it caused such a problem for publishers, and I find it hard to believe that something like that wouldn't have damaged consumers as much if not more in the long term. Here's my reasoning: Amazon, as we all know, was willing to sell titles at a loss to maintain their low prices. This sounds great for consumers, because we save money right away. But over time, the businesses that can't afford to sell titles at a loss go under. Amazon no longer needs that super-low price to be the lowest price around because their price is the only price, now they can finally sell it for a profit without fear of consumers just walking to a book store or clicking over to the next site. Book prices go back up, competition is gone with little hope of return, and Amazon stands over the corpses of Borders and B&N triumphantly.
People said the same thing about Wal-Mart, except somehow Target spanks their a** every quarter. Either way, your supposition has a few problems, notably Amazon, unlike Apple, still sells the physical copies of the books, as well as the e-books. Said physical copies are NOT covered by the Apple agreement and Amazon is free to price them as it wishes. Amazon, as a part of their business, allows other retailers to compete with them ON THE SAME PAGE. You can see other prices for both new and used books, ri
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Amazon, as a part of their business, allows other retailers to compete with them ON THE SAME PAGE.
It's hardly competing if it's part of the Amazon business model, performed under Amazon's terms and conditions, and contributes to Amazon's bottom line.
You might as well say Apple allows developers to compete with them ON THE SAME PAGE by letting them into the Apple App Store. Though of course in THAT case you're more aware of the conditions than you are in the Amazon case.
It was either buy books at wholesale, setup a division to manage prices and take a loss like Amazon, or collude to change how the market was structured. Guess which one they picked.
They picked neither of those. What they did was extend the existing model of selling songs, apps and movies to ebooks. The absolutely mo
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.
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Actually yes it is illegal and unreasonable. You can't set contract terms that prevent your competition from undercutting you with a better deal or from them being willing to make less money than you. You are in effect by establishing such a contract engaging in price fixing as you are setting a minimum price.
http://feldmanfile.blogspot.de/2012/04/most-favored-nation-landmine.html [blogspot.de]
It's very important to understand that Apple isn't the only eBook retailer with a "Most Favored Nation" clause; both Amazon and Barnes & Noble have them as well. In fact, Amazon is far more aggressive at exercising its clause than the other two retailers. Amazon regularly scans the prices for eBooks at competitive websites and will automatically drop the price of any title that it finds lower at another site, without giving notice to the publisher (or, for a self-published eBook, the author.)
Re:Still confused (Score:5, Informative)
For non-agency titles (in other words, titles that Amazon purchases to sell under the wholesale model,) Amazon reserves the right to set and change the price as it sees fit, although it will still remit the same wholesale amount back to the publisher or author. If Amazon drops its price for a title below that of Apple or Barnes & Noble, even without the knowledge of the publisher or author, Apple and Barnes & Noble have the right to match Amazon's price.
Read that through again. The blogger you are sourcing is misrepresenting what a "Most Favored Nation" agreement is. When a retailer, such as Amazon, buys a product at wholesale, either a book or a pipe fitting, they have the right to set whatever price they wish for that item. If they're cutting into their own profit that doesn't matter and is not illegal, the manufacturer/distributor/publisher was paid their asking price. This is not a MFN clause, it's standard retail practice. Apple's deal changed that. Retailers could no longer set their own prices. If they didn't charge the price the publishers demanded then they would not be sold any books, and several publishers did withhold books from Amazon until they agreed to their scheme. They could no longer use pricing as a competitive tool against Apple, which is why Apple is in court and not Amazon.
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Amazon regularly scans the prices for eBooks at competitive websites and will automatically drop the price of any title that it finds lower at another site, without giving notice to the publisher (or, for a self-published eBook, the author.)
Ok... can you explain how Amazon cutting their own profit is price fixing?
And why Amazon should give the publisher notice?
I assume that with the big publishers, Amazon has a deal where the company pays a fixed price for any sold book.
This is different with books self-published through Amazon. Those authors probably get a percentage of the profits. In this case (and only in this case) Amazon hurts the profits of the authors.
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I don't think you know what a most-favoured-nation clause is.
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...
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...because it's illegal to collude to set inflated prices? Exactly the same reason why it's obviously illegal to steal someone's car?
Re:Still confused (Score:4, Informative)
Apple has an agreement with the publishers that says "No one is permitted to sell for less than this."
In other words, they tell potential ebook sellers "Sure you can try to compete, but don't think you can sell more / establish yourself / give consumers a better deal by selling at a lower price."
Now, here's the purpose of the Sherman Antitrust Act [wikipedia.org]:
"To protect the consumers by preventing arrangements designed, or which tend, to advance the cost of goods to the consumer."
Sounds pretty obvious that what Apple is doing is an example of what the Sherman Antitrust Act is about, doesn't it?
And here's how the law starts:
http://books.google.com/books?id=biU3AAAAIAAJ&pg=PA209 [google.com]
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In that it sets a single price across the market, it's obviously anticompetitive. Now, whether anticompetitive actions are a bad thing may be a matter of debate for you, but that's not the issue at hand.
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If Apple doesn't set the prices, how can they fix the prices?
Furthermore, for the sake of argument: What if Apple Loses? They'll be ordered to ... what? Fix the prices?
Re:Still confused (Score:5, Interesting)
If it's anything like Europe, Apple will be required to end their most-favoured clause immediately, and publishers will be required to offer Amazon discounted prices on their books for a few years to offset the elevated prices that they'd been forced to accept under the anticompetitive regime that existed.
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If it's anything like Europe, Apple will be required to end their most-favoured clause immediately, and publishers will be required to offer Amazon discounted prices on their books for a few years to offset the elevated prices that they'd been forced to accept under the anticompetitive regime that existed.
In reality what has happened in Europe was that Apple had to give up their most-favoured clause immediately, while Amazon got to keep theirs. And that's all that has happened.
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It is the nature of punitive action that it will tend to favour the transgressor rather than the transgressed, yes. What "most-favoured" clause of Amazon's are you talking about?
Comments (Score:5, Interesting)
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.
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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
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.
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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.
What I find curious, given the fear of monoculture, is how publishers continue to let fear of pirates(who, at last writing, don't seem much deterred by current DRM schemes, and who often have access to scanned versions in any case) drive them right into the same mistake that Team Music made.
While there effect on pirates is muted, DRM schemes certainly do help encourage a winner-take-all market by tying a customer more heavily to a given store the more he has used it in the past. With computers and high-capa
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No argument here.
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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.
So it's actually a long-term tactic to fuck over their shareholders. And I wouldn't call losing 20% on most ebook sales "slim".
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It would not surprise me if a majority of Amazon's sales on everything came out at a loss, with enough big profit items to shift it back across the other side of the line. They're playing a dangerously volatile game.
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You might want to go look at their profit statements over the life of the company.
They've always been playing this game.
Making millions while selling billions.
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That's why I referred to them as Amazon's long term strategy in the earlier post.
Re:Comments (Score:4, Informative)
" What I have trouble determining in this shift from physical media to digital is how the artists are making out in this brave new world."
A couple of artists that sell e-books direct through Amazon have become millionaires actually. http://blog.nathanbransford.com/2011/03/amanda-hocking-and-99-cent-kindle.html [nathanbransford.com]
The problem with e-book prices, in the main, is the perception of value. When they are listed next to the retail prices for the paperback version and it's still cheaper to have a paperback shipped to your home, then something is very very wrong. When the e-book version of a book that has been out of print for a decade or more hits the market for $9.99, you know that's not a fair price.
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There is a very simple formula for deciding if the price of a luxury item (like a book) is fair: If the seller is willing to accept the price, and the buyer is willing to pay the price, then the price is fair.
Re:Comments (Score:4, Interesting)
Standard Oil didn't get in trouble because they had low prices, they got in trouble because they created a trust. They not only sold oil, but they either owned or controlled most of the oil transportation system. Because of that control, nobody could compete with them in the oil market because it would have been too expensive for a competitor to build their own transportation system. Therefore, competitors could not arise, and SO could in fact raise prices to very high levels.
Ebooks are not remotely like that. Sure, Amazon could drive competitors out of the ebook market by having very low prices, but as soon as they try to raise prices competitors will pop up, as it is stupidy cheap to retail ebooks.
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).
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Good! Now what abut banks? (Score:3)
Glad to see they have enough evidence to go after Apple.
It seems fairly obvious that they are guilty.
Now how about some banks?
Quotes from Steve Jobs Official Biography? (Score:2)
Re:GIVE APPLE THE NEEDLE !! (Score:4, Funny)
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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.
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:GIVE APPLE THE NEEDLE !! (Score:5, Informative)
Keep in mind these cost are assuming domestic US production of books! I don't think I can pick up one of my kids books and not see "PRINTED IN CHINA" on the back.
Nature: online science papers 1/2 printed cost (Score:2)
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Hahahahaha, you mean scanning the paper version and stuffing it into a .mobi file after some dodgy OCR?
A lot of the legitimate ebooks I've seen should be returned as unfit for purpose.
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"Technology giant Apple is to begin its defence against charges ..."
Doesn't the prosecution present their case before the defence begins?
Normally yes, but the DOJ has already presented its case to the public, and the judge has already decided. Might as well go right for the appeal.
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Books I understand, the people who bought iDevices paid a premium fully knowing cheaper "viable" alternatives existed. I don't follow why they should get anything back, those were fully informed decisions.
P.S. I prefer android personally.
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:Stupid case (Score:5, Interesting)
Prior to e-books, when a publisher stopped printing a book, their profit from that book was done. If it was a very popular book they might order more printings, but again, when the printing stopped so did that books revenue stream. This was a problem for the publisher, the author and the reader. The publisher and author's side is easy to understand; no new income, but consider also the reader that didn't know about that author at the time, it's been 20 years and they just read an author's newest novel which is part of a series and they feel a desire to read their older books. If they are lucky they might be able to track down a copy from a library or hunt through a few used book stores for one, neither of which gets any profits back to the author. Or conversely they found a dog eared used copy in a flea market and want to read more of that author's works, but the author died and all their books are out of print.
E-books, and Amazon created a new revenue stream for publishers, buying up books at wholesale (for which they paid what the publishers asked! how is that anti-publisher??) and selling those e-books below their own costs to expand a market from a niche curiosity into every day ubiquity. E-books continue to generate revenue long after the printing presses shut down, unlike paper books. So these poor, taken advantage of publishers went from zero profits after print to "some" profits. Oooo, evil Amazon, how could you mistreat them so???
It was the publishers with Apple's help that decided "some" profit wasn't enough, they wanted moar! So now you get numerous cases where the e-book's price is HIGHER than the paperback!! I've seen e-books listed for the hardcover price years after the book was released and used paperback copies were selling for $1 right beside it.
I swear, the only publisher that ever really understood e-books was Baen. Give the old books away for free as advertising for the new books, it's not like they were making money sitting on a hard drive waiting for a new print run!
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?
Re:Stupid case (Score:5, Interesting)
First off, Amazon built the e-book market. When e-books started they were just niche amusements people got for their Palm Pilots and Windows PDA's. Publishers didn't care about them at all and made zero effort to establish them.
Amazon laid the groundwork, connected their store to a decent e-book reader and made e-books into the market it is today.
They were also not bankrupting any publishers. They paid the wholesale price for the books that the publishers asked for and then CUT THEIR OWN PROFIT MARGIN by selling lower than what they paid. The publishers already made a profit off the hardcover, the paperback and the e-books.
The problem wasn't that publishers were getting paid, in fact e-book sales were keeping alive books that were decades out of print and creating new profit where none had existed before. It was that they didn't feel they were getting enough. These are the same publishers that have said publicly that Libraries are stealing profits from them, btw. They are the reason an e-book now retails the same price as the hardcover even when the paperback is being sold simultaneously. Publishers are the reason an e-book can retail for $9.99 when the paperback sells for $7, if it's still even in print.
The publishers jumped into Apple's arms when they proposed their deal because it gave them a way to increase their profits and if it wasn't shady they wouldn't have all settled with the government rather than stand with Apple in their defense.
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Apple's point was that they had no deal at all in the shady part, the publishers colluded among themselves.
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Apple's point was that they had no deal at all in the shady part, the publishers colluded among themselves.
Ignorance is no excuse for breaking the law!
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In other words Apple tried to do what they did with music , open up a market and allow everyone to make money and be of benefit to the users.
This model kept the ebook prices artificially high and removed competition on price.
How would that be to the benefit of the users?
Re:Who is the victim here? (Score:5, Interesting)
Smaller competitors who want to get into the market. Effectively, price controls like this will freeze out the competition. How? Well, say Apple are making 200% profit on everything they sell because they have price-fixed. You now can sell at 200% profit and compete with them (and thus become part of the cartel yourself), or you can try to undercut them. But they have a huge market, to themselves, with huge profit margins, complete control of the market (because they are all agreeing to price at whatever they want) and lots and lots and lots of spare cash to keep you out / buy you up.
Because of this, you also get a lack of competition (what's the point of competing if you can all agree to just set prices to X and no-one "wins" the market for having a better product?), the market stagnates and the customer gets screwed - not by the raised prices (as you say, that's up to the customer) but because the market is so closed that they either pay lots or DON'T get the products at all. It's also a pretty good way to kill off the technology and (thus) competitors who rely on book sales to sell reading devices, etc.
A company sets its own prices. That much is certain. But they should not be getting into groups and DECIDING how much the customer pays between them collectively, with no reference to how much it costs to supply the product itself, and no consumer interest. It's illegal for a reason. It destroy markets, stifles innovation, removes competition, and makes everything a big game to make money with no regard to consumers at all. And, at the end of the day, it becomes "pay lots, or get nothing", which isn't a technique that benefits taxpayers either. Yes, you get greater tax revenue from profits (you hope!), but you also get less people spending money and less money available to spend on other things for those that do.
The point is that the market is bigger than a company, even a government. Harming the market DIRECTLY harms the stability of the economies of world governments. Thus it is illegal.
There's nothing stopping a company with a patent licensing its patent ONLY for 10 bajillion dollars even though it costs next to nothing to manufacture. That's just business. Nobody's stopping that. But colluding with competitors to price other competitors and your own customers out of the market is in nobody's interest - not even the companies that do it, or their shareholders!
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But this is the publisher (owner of copyright) licensing it's copyright for some price they and Apple agreed to.
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In every voluntary trade each side benefits otherwise there would be no trade.
True.
If Apple wants to set up deals with publishers to set prices nod the customers agree to pay those prices who is actually the victim?
Everybody but Apple.
The reason its not so simple is because its not a single-variable problem. The optimal price for each retailer to sell at is different.
A simple example of this sort of thing are price differences between the prices at convenience stores and grocery stores.
What Apple was doing was conspiring with the publishers so that the minimum price that anyone could sell at was a close approximation of only Apples optimal price. The publishers have already plead guilty. Apple is trying t
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They could price the book at $10,000 if they want I don't have to buy it. If I agree to buy something only to find it cheaper elsewhere doesn't mean I was ripped off.
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The point is that under Apple's iBooks publishing contracts, you're not supposed to be able to get it cheaper elsewhere. (As an ebook, anyway.)
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I'm not an Apple apologist I just don't see a problem with this.
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You don't see the problem with publishers being able to directly set a single price for their product across all retail outlets? A product for which no secondary market exists?
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That's what you get when you allow the monopoly of IP.
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I would love for you to explain how that argument makes the least bit of sense.
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And if the US had a better banking system there wouldn't be any loan sharks, but we still have an obligation to prosecute Johnny Thumbs for breaking people's knees when they miss a payment.
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You are not allowed to make the deal because you previous agreed not to. You had a contract to do something so if you violate it you are subject to whatever is in the contract.
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:Purchasers. (Score:4, Informative)
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Lots of things are against the law. I am trying to figure out the logic why.
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%.