US DOJ Plans Anti-Trust against iBooks (1 Viewer)

[Patrick_S]

This round. It's not over.

Should I rearrange the deck chairs while the band plays on?

 

[DaveF]

I've not followed this case. But the bit I've read it's not obvious Apples actions were anti-consumer. What's the summary? Am I glad collusion was punished? Or sad that Amazon is free to become the book monopolist?

 

[Sam Posten]

Here's a good write up of where we are at:http://tidbits.com/article/13912?rss=&utm_source=dlvr.it&utm_medium=twitter&utm_campaign=tidbitsPatrick, as I said, reading through the two slide decks alone I thought the Government had a strong case even tho Amazon was an existing Monopoly. The line "you guys probably want higher prices anyway" line is kinda damning. But a lot can still happen in appeals!

 

[Patrick_S]

Of course you are right they could win an appeal. It just seems rather silly to fight since it is pretty obvious they are guilty of the charges.As for Amazon, they are not relevant to this case, only Apples actions should be considered.

 

[Sam Posten]

If you are Apple how do you enter the books business without going this route against a standing monopoly? If I'm in Apple's shoes I might see the -potential- of monopoly charges against me as a very low probability CoDB.

 

[Patrick_S]

If you are Apple how do you enter the books business without going this route against a standing monopoly? If I'm in Apple's shoes I might see the -potential- of monopoly charges against me as a very low probability CoDB.

It really is incorrect to call Amazon a monopoly but I would be interested to know why you think it is one. Their market share is not reason enough to label it one. Interestingly you question how Apple could enter the e-Book business without going the route they did, seriously? Apple of all companies in the world is probably the one that is best suited to enter the business without breaking any laws.

 

[Sam Posten]

Would you like to ask Borders and Barnes and Noble if Amazon is a Monopoly?

 

[Sam Posten]

Said better than I can, here:

How do you compete with a crazy person, a guy who seems congenitally allergic to profits? When it entered the e-book market, Apple had two choices. First, it could out-crazy Amazon—it certainly had the cash reserves to take a similar loss on e-books, to sell them at $9.99 or less in order to become a leader in the business. But Apple had no desire to do that. Documents in the case make clear that it didn’t see much value in competing on price, especially because it believed the iPad offered a better experience than the Kindle for e-books. Apple also had no interest in losing any money, whereas at Apple, profits are inviolable—the only real point of doing anything.

But how could Apple make a profit on e-books if the prevailing price, set by Amazon, was below cost? There was only one way: by working with publishers to force Amazon to raise its prices. To do so, Apple proposed that publishers adopt the “agency model” for e-books. Under this model, a publisher sets the retail price of the book, and the e-book store—i.e., Apple and Amazon—would take 30 percent of that price

http://www.slate.com/articles/technology/technology/2013/07/apple_e_book_price_fixing_federal_judge_rules_in_amazon_s_favor.html

Slate very much agrees with your take, btw:

It’s possible to sympathize with the publishers in this saga. With their business models in peril, they were stuck between two behemoths and had little leverage; though it’s illegal, collusion might have seemed like the only way to fight back against Amazon. But I really can’t see anything good in Apple’s effort. Jobs embarked on a strategy that had the effect of helping Apple and potentially helping publishers, but by raising prices on every customer. It was shameful. It was also a failure, and now, despite the iPad and the iBookstore, Amazon is still the undisputed leader of the worldwide market for e-books. Thank goodness.

Thank goodness we still have a monopoly and one weak competitor and the rest of the challengers unable to survive? Really?

 

[Johnny Angell]

I'm just a consumer, I don't know the fine points of the law. Before Apple, ebooks are $10, after Apple they're $15. I'm thinking "more competition raises the price? What's wrong with this picture."

 

[Sam Posten]

hypocrites:
http://online.wsj.com/article_email/SB10001424127887323977304578654520916138596-lMyQjAxMTAzMDAwNzEwNDcyWj.html

 

[Walter Kittel]

For some reason the phrase "There is no honor amongst thieves." comes to mind.

- Walter.

 

[Sam Posten]

That's one way to look at it. I don't doubt that what has happened here is somewhat shady but I still maintain that the bad guy is not Apple or the publishers but Amazon. That's the elephant in the room and the publishers playing prisoners dilemma and dropping the blame on Apple in order to beat Amazons unfair dumping monopoly isn't all that unexpected. But to then say that they STILL need the Apple deal when Apple has taken all the heat? That's bush league.

 

[Patrick_S]

I've not followed this case. But the bit I've read it's not obvious Apples actions were anti-consumer.

This comment begs the question, what the hell have you been reading? It is clear as day that what Apple did was anti-consumer. Their horizontal price fixing scheme with the publishers resulted in an anti-competitive environment that resulted in higher prices for the consumer. How more obvious would it have to be for you to see that as anti-consumer?

 

[DaveF]

If it caused prices to increase. If it put more bookstores out of business than Amazon did. If there was collusion with Amazon to create an oligopoly. If prices went up on Amazon and went down at Apple. If books stopped being published in eBook or audiobook formats as a crutch to conventional publishing. I didn't notice overt signals that I was being harmed by Apple. It seemed more internecine fighting among tech giants. (Very casually, it created competition with Amazon's (near?) monopoly on ebooks, and not obviously anti-consumer.)So what have you read that made it clear as day that Apple is anti-consumer? As I said, I've read very little on this and don't have a strong opinion on the villains.

 

[Walter Kittel]

If it caused prices to increase.

Examine the chart in this article to see what happened to prices when Apple entered the market.

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/10/a-judge-says-apple-fixed-e-book-prices-this-chart-shows-how-they-did-it/

- Walter.

 

[Sam Posten]

But that's a bit disingenuous tho. The monopoly seller kept prices artificially low by selling often under wholesale by shifting profits from other sales.

 

[Walter Kittel]

Disingenuous or not, consumers saw a 20 percent or greater increase in prices for titles.

Are prices artificially low? Excerpt from the findings of judge Denise Cote, while approving the DOJ's settlement with three publishers in September of 2012

None of the comments demonstrate that either condition for predatory pricing by Amazon existed or will likely exist. Indeed, while the comments complain that Amazon’s $9.99 price for newly-released and bestselling e-books was “predatory,” none of them attempts to show that Amazon’s e-book prices as a whole were below its marginal costs.

And as has been discussed in this thread...

Third, even if Amazon was engaged in predatory pricing, this is no excuse for unlawful price-fixing. Congress “has not permitted the age-old cry of ruinous competition and competitive evils to be a defense to price-fixing conspiracies.” ... The familiar mantra regarding “two wrongs” would seem to offer guidance in these circumstances.

- Walter.

 

[Sam Posten]

Noted Walter. I obviously disagree with that but that's why I'm not king =)

Anyway, listen all ya'all, it's a sabotage:
http://appleinsider.com/articles/13/08/09/doj-accuses-apple-and-publishers-of-conspiring-again-after-e-book-ruling

 

[DaveF]

Examine the chart in this article to see what happened to prices when Apple entered the market. http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/10/a-judge-says-apple-fixed-e-book-prices-this-chart-shows-how-they-did-it/ - Walter.

Interesting. Are those retail prices to consumer?

 

[Walter Kittel]

I believe that those are the retail prices as seen by consumers.

- Walter.