Apple eBook price fixing case going to court

[bgalbrecht]

I wish all manufacturers would switch to agency pricing so I wouldn't have to make an effort to find out who has the lowest price. It would certainly save time and gas. I'd be able to go to the closet gas station or store and know that I'm getting the best possible deal.

[John F]

Originally Posted by bgalbrecht

I wish all manufacturers would switch to agency pricing so I wouldn't have to make an effort to find out who has the lowest price. It would certainly save time and gas. I'd be able to go to the closet gas station or store and know that I'm getting the best possible deal.

That wouldn't work. Agency pricing guarantees a minimum, not a maximum. Seems like a simple solution is just pick Amazon; they seem very competitive with pricing.

[tubemonkey]

Even aliens are weighing in on this case. Here's an op-ed piece from someone who's obviously not from planet earth.

Last week, Federal District Judge Denise Cote ruled that Apple Inc. was guilty of collusion and of fixing the price of e-books.

The gist of the case is this: At the time Apple entered the e-book market, Amazon held a 90% share of the market and sold e-books for $9.99. After Apple entered the e-book market, Amazon’s market share fell, as did prices of e-books. If you are perplexed in trying to understand how Apple fell afoul of the antitrust brigades for lowering prices to consumers, the key point to grasp is that the federal government is not the friend and defender of the consumer, as popular mythology would have it. The Apple case is not an aberration. Uncle Sam has been a chronic thorn in the consumer’s side, intervening to raise consumer prices in a variety of ways.

[jersysman]

Hmmmmm... I wonder what that person was smoking.

[tubemonkey]

Originally Posted by jersysman

Hmmmmm... I wonder what that person was smoking.

LOL ...there's a bad batch of dried banana peels floatin' around

[6charlong]

Tubemonkey quoted:

Last week, Federal District Judge Denise Cote ruled that Apple Inc. was guilty of collusion and of fixing the price of e-books.

The gist of the case is this: At the time Apple entered the e-book market, Amazon held a 90% share of the market and sold e-books for $9.99. After Apple entered the e-book market, Amazon’s market share fell, as did prices of e-books. If you are perplexed in trying to understand how Apple fell afoul of the antitrust brigades for lowering prices to consumers, the key point to grasp is that the federal government is not the friend and defender of the consumer, as popular mythology would have it. The Apple case is not an aberration. Uncle Sam has been a chronic thorn in the consumer’s side, intervening to raise consumer prices in a variety of ways.

I've forgotten which grade it was but even as a child I wondered how this could be math. As I recall, the problem was:

Circle the smaller number ..... 15.....13 ---- 13....12

[fjtorres]

Originally Posted by tubemonkey

Even aliens are weighing in on this case. Here's an op-ed piece from someone who's obviously not from planet earth.

Probably a native from here:



Explains the "logic" of that "argument".

[leebase]

Yeah - I agree - that article clearly was written by someone not familiar with the ebook case. Though, I think he is correct in that monopolies have a track record of lowering prices. Standard Oil, the company originally targeted, had lowered the price of gas quite a bit. But that has nothing to do with the Apple trial.

[HansTWN]

Originally Posted by bgalbrecht

I wish all manufacturers would switch to agency pricing so I wouldn't have to make an effort to find out who has the lowest price. It would certainly save time and gas. I'd be able to go to the closet gas station or store and know that I'm getting the best possible deal.

You wouldn't be a getting a good deal anywhere. And spend a lot more money on higher prices than you could ever spend on gas. Not to mention that you can compare prices online.

[Alexander Turcic]

Did anyone read the judge's full opinion? It's actually a pretty good read.

https://www.competitionpolicyinterna...dgeopinion.pdf

[Elfwreck]

It gives a terrific overview of the background.

Publishers conveyed to Apple their abhorrence of Amazon’s pricing, and Apple assured the Publishers it was willing to work with them to raise those prices, suggesting prices such as $12.99 and $14.99. Over the course of their negotiations in December 2009 and January 2010, Apple and the Publisher Defendants educated one another about their other priorities. Apple strongly hoped to announce its new iBookstore when it launched the iPad on January 27, 2010, but would only do so if it had agreements in place with a core group of Publishers by that date, could assure itself it would make a profit in the iBookstore, and could offer e-book titles simultaneously with their hardcover releases. For their part, if the Publisher Defendants were going to take control of e-book pricing and move the price point above $9.99, they needed to act collectively; any other course would leave an individual Publisher vulnerable to retaliation from Amazon.

Apple and the Publisher Defendants shared one overarching interest--that there be no price competition at the retail level.

And of course, Apple was not just watching on the sidelines, hoping the publishers would come to an agreement:

As Apple made clear to the Publishers, “There is no one outside of us that can do this for you. If we miss this opportunity, it will likely never come again.”

It goes over, step by step, how the 5 competitors colluded with each other and Apple to raise prices, for no reason other than that they believed people should be paying more than $10 for ebooks.

[JoeD]

Originally Posted by Elfwreck

It goes over, step by step, how the 5 competitors colluded with each other and Apple to raise prices, for no reason other than that they believed people should be paying more than $10 for ebooks.

Apple and the Publishers will be paying more than $10 over their ebooks, I think they've succeeded, although perhaps not as they had intended

[Sydney's Mom]

Originally Posted by Alexander Turcic

Did anyone read the judge's full opinion? It's actually a pretty good read.

https://www.competitionpolicyinterna...dgeopinion.pdf

Thanks for the post! Pulled it up and read it on and off this afternoon. I am happy to see she said the answer to anticompetitive behavior is to file suit, not to engage in your own anticompetitive behavior. The continued finger pointing at Amazon was puzzling to me, because I had never heard of such a defense. "I killed him because he hired a hitman to kill you." I guess they were just playing to the crowd.

This confuses me, because what did they think would happen at a bench trial? If they were going to raise irrelevant, emotional issues, they should have picked a jury trial.

The opinion was very well written, and since she found most publisher and Apple witnesses not to be credible, an appeals court will defer to her judgment on the veracity of witnesses.

[Barcey]

The DOJ has proposed measures against Apple's actions.

Among the measures, Apple would need to let other e-book retailers like Amazon and Barnes & Noble provide links to their respective e-bookstores from their iOS apps, "allowing consumers who purchase and read e-books on their iPads and iPhones easily to compare Apple's prices with those of its competitors.

I'm sure Apple will fight that one.

Other measures proposed by the department to the court, Apple would need to end its agreements with five major publishers linked to the conspiracy and refrain for five years from entering new e-book distribution contracts which would restrain Apple from competing on price. It couldn't funnel information among the conspiring publishers or retaliate against them for refusing to sell e-books on agency terms.

The department asked for an external monitor, paid for by Apple, that watches to the company's Apple's internal antitrust compliance policies.

I'm not clear on why they'd only be restricted for 5 years against funneling information between conspiring publishers. I would think that would be perpetual but maybe I'm reading it wrong.

news.cnet.com/8301-1023_3-57596709-93/doj-proposes-ways-to-halt-apple-e-book-price-fixing/

[kennyc]

And not only that DOJ now wants oversight of all of the iTunes store:

http://online.wsj.com/article/SB1000...925101514.html