Apple + Agency Pubs Colluded on Price? - Page 2

JSWolf · 08-10-2011, 05:29 AM

So if Apple and the publishers lose, would we get money back for every agency eBook we've purchased?

afa · 08-10-2011, 05:36 AM

That seems doubtful.

For one, on what basis would they 'return' the money? There was no fixed price, as such, for the ebooks (prior to the fixing). So how will they calculate the difference? $12.99 minus $9.99? $8.99? $5.99?

Since the price was varying across stores and depending on what discounts vendors chose to give, I don't see this working. Probably the most that would happen is that they would have to stop fixing prices in the future.

More importantly, though, I don't think they will lose the case. We have the might of Apple Inc., along with five of the largest publishers in the world, and all the lawyers that they have on their side...

fbrII · 08-10-2011, 06:33 AM

It's nice to see Apple and the "Agency" publishers get their faces rubbed in the dirt as they richly deserve, although I am highly skeptical of seeing justice in a U.S. court system where the dollar is far mightier than the sword.

NormHart · 08-10-2011, 07:31 AM

Quote:

Originally Posted by kjk

A class-action lawsuit is a bit different-anyone can bring one.

The real story would be if the Justice Department anti-trust department investigates-something like that could bring real change.

You're not going to see that. The DOJ Antitrust Division was gutted by Congress a decade ago.

elcreative · 08-10-2011, 07:33 AM

Quote:

Originally Posted by fbrII

It's nice to see Apple and the "Agency" publishers get their faces rubbed in the dirt as they richly deserve, although I am highly skeptical of seeing justice in a U.S. court system where the dollar is far mightier than the sword.

Yay, a civil case grubbing for a payout for the lawyers... "rubbed in the dirt," come on, get real - it's a CIVIL case not criminal and the only real winners here will be the lawyers but I'm really pleased that makes you so happy...

leebase · 08-10-2011, 08:16 AM

The case will go nowhere.

Repeat all previous arguments on this topic. Convince no one.

Etc. etc.

Lee

fbrII · 08-10-2011, 09:47 AM

Quote:

but I'm really pleased that makes you so happy...

Glad to have brought some cheer to your day

Daithi · 08-10-2011, 11:10 AM

I just read the entire 46 page filing, and it does a great job of explaining the history behind the move to agency pricing, but is a bit weak in describing why agency pricing is a violation of the Sherman Act (and a few other anti-trust laws). None of the federal or state governments have filed anti-trust complaints against Apple or the Big Five, so I think this lawsuit is facing a huge hurdle.

One thing I did find interesting is in Section 67-68 in the filing. Apparently, Apple forced Random House to adopt the Agency Model. According to the filing Random House books were banned from the Apple Site unless they adopted the Agency Model, and they did so in March of this year.

Personally, I feel that the Agency Model is anti-competitive, but I don't know the law well enough to back up my feeling.

Phogg · 08-10-2011, 11:20 AM

Quote:

Originally Posted by NormHart

You're not going to see that. The DOJ Antitrust Division was gutted by Congress a decade ago.

Longer ago than that. In 1982 they were able to break up Ma Bell.
By the mid 90's Bill Gates was able to tell them where to go, and by 2002 they quit trying.

Congress, however, does not control personnel in the DOJ, that is the province of the sitting president. Also, a huge part of the problem is within the judiciary. All branches of government have become corrupt - IMNSHO the drones within the bereaucracy most of all.

Lazybones · 08-10-2011, 11:22 AM

I heard about it at Ars Technica this morning.

I tend toward the cynical as well on legal issues, but I'm still going to hope for the best. I think that the publishers are fighting a losing battle in the long run, given the broader changes in the book market that the Internet is facilitating.

=X= · 08-10-2011, 12:12 PM

I'm glad the lawsuit is finally in action.

A bit ironic that the articles photo is showing a kindle.

emellaich · 08-10-2011, 08:49 PM

So, I would be happy to hear from some lawyers on this, but here is my understanding/guess.

1) It used to be illegal for manufacturers to set fixed retail prices, but as of a recent court case (was it as recent as 2004??) it is now OK.

2) Furthermore, as I understand the term 'agency' pricing, it means that Amazon (and Apple) are not really retailers selling a product. The actual seller is now the publisher and Amazon is acting as a distributor for delivering the product. This means that the manufacturer sets the price and negotiates a handling fee (30 percent) that it pays the distributor (Amazon).

Given points one and two above, I believe it would be quite possible / legal for a publisher to decide that it will no longer sell/license electronic books to retailers. There is nothing in the law that forces a company to sell a product if it doesn't want to. Instead the publisher will contract with sales agents to provide a distribution service. For this reason, I would expect the company to establish the same business model across all distributors. Furthermore, it is quite understandable that the commission is the same 30%. The publisher will negotiate one benchmark deal that others will follow. Even if either Apple or Amazon got a special percentage, each of them are large enough to demand that they also get the same percentage.

However, there is an anti-trust question here. Prices can not be set in collusion by a set of manufacturers. It does seem that there are standard price points that the publishers all use. Furthermore, to the extent that these price points are negotiated (even with Apple) to end up at a common point, it may show collusion. The later publishers may have been 'forced' to agree to prices that other publishers already agreed upon.

Anyway, I'm not arguing whether agency pricing was a 'smart' move, or the resulting prices are correct. Frankly, I think the publishers should have been happy with Amazon subsidizing the publisher business model. I personally would have been more happy as a consumer.

In my (uneducated) opinion; however, agency pricing and similar deal structures across entities is legal. However, if the specific price levels match across publishers, then there may be legal issues.

ucfgrad93 · 08-10-2011, 09:12 PM

Quote:

Originally Posted by Daithi

Personally, I feel that the Agency Model is anti-competitive, but I don't know the law well enough to back up my feeling.

I agree. I hope it is overturned, but have no idea if it is illegal or not.

FizzyWater · 08-10-2011, 09:27 PM

Quote:

Originally Posted by afa

In any case, I think you misunderstood the passage. The quote you mentioned says "hard-copy", which merely means the physical, i.e. print, copy (as opposed to the digital format). This would include any print version, including paperback. Not to be confused with 'hard-back' or 'hard-cover' prints.

Well, color me embarrassed...

As Rosanne Rosannadana used to say...."Never mind!"

kjk · 08-10-2011, 09:27 PM

Quote:

Originally Posted by emellaich

However, there is an anti-trust question here. Prices can not be set in collusion by a set of manufacturers. It does seem that there are standard price points that the publishers all use. Furthermore, to the extent that these price points are negotiated (even with Apple) to end up at a common point, it may show collusion.

Curious how would that fit in with Apple's .99 pricing of music from all the music publishers back in 2003- that lasted until 2009, when the music publishers traded DRM for variable pricing?

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08-10-2011, 05:29 AM	#16
JSWolf Resident Curmudgeon Posts: 73,972 Karma: 128903378 Join Date: Nov 2006 Location: Roslindale, Massachusetts Device: Kobo Libra 2, Kobo Aura H2O, PRS-650, PRS-T1, nook STR, PW3	So if Apple and the publishers lose, would we get money back for every agency eBook we've purchased?

08-10-2011, 05:36 AM	#17
afa The Forgotten Posts: 1,136 Karma: 4689999 Join Date: Apr 2010 Location: Dubai Device: Kindle Paperwhite; Nook HD; Sony Xperia Z3 Compact	That seems doubtful. For one, on what basis would they 'return' the money? There was no fixed price, as such, for the ebooks (prior to the fixing). So how will they calculate the difference? $12.99 minus $9.99? $8.99? $5.99? Since the price was varying across stores and depending on what discounts vendors chose to give, I don't see this working. Probably the most that would happen is that they would have to stop fixing prices in the future. More importantly, though, I don't think they will lose the case. We have the might of Apple Inc., along with five of the largest publishers in the world, and all the lawyers that they have on their side...

08-10-2011, 06:33 AM	#18
fbrII F. BluDevil Posts: 428 Karma: 1152548 Join Date: Dec 2008 Location: St. Louis Missouri Device: Pocketbook Inkpad3 pro, Kobo Libra, Kindle Paperwhite	It's nice to see Apple and the "Agency" publishers get their faces rubbed in the dirt as they richly deserve, although I am highly skeptical of seeing justice in a U.S. court system where the dollar is far mightier than the sword.

08-10-2011, 08:16 AM	#21
leebase Karma Kameleon Posts: 2,934 Karma: 26616647 Join Date: Aug 2009 Device: iPad Mini, iPhone X, Kindle Fire Tab HD 8, Walmart Onn	The case will go nowhere. Repeat all previous arguments on this topic. Convince no one. Etc. etc. Lee

08-10-2011, 11:10 AM	#23
Daithi Publishers are evil! Posts: 2,418 Karma: 36205264 Join Date: Mar 2008 Location: Rhode Island Device: Various Kindles	I just read the entire 46 page filing, and it does a great job of explaining the history behind the move to agency pricing, but is a bit weak in describing why agency pricing is a violation of the Sherman Act (and a few other anti-trust laws). None of the federal or state governments have filed anti-trust complaints against Apple or the Big Five, so I think this lawsuit is facing a huge hurdle. One thing I did find interesting is in Section 67-68 in the filing. Apparently, Apple forced Random House to adopt the Agency Model. According to the filing Random House books were banned from the Apple Site unless they adopted the Agency Model, and they did so in March of this year. Personally, I feel that the Agency Model is anti-competitive, but I don't know the law well enough to back up my feeling.

08-10-2011, 11:22 AM	#25
Lazybones Groupie Posts: 162 Karma: 1719250 Join Date: Aug 2011 Location: Sacramento Device: Kindle	I heard about it at Ars Technica this morning. I tend toward the cynical as well on legal issues, but I'm still going to hope for the best. I think that the publishers are fighting a losing battle in the long run, given the broader changes in the book market that the Internet is facilitating.

08-10-2011, 12:12 PM	#26
=X= Wizard Posts: 3,671 Karma: 12205348 Join Date: Mar 2008 Device: Galaxy S, Nook w/CM7	I'm glad the lawsuit is finally in action. A bit ironic that the articles photo is showing a kindle.

08-10-2011, 08:49 PM	#27
emellaich Wizard Posts: 1,101 Karma: 4388403 Join Date: Oct 2007 Device: Palm>Ebookman>IPaq>Axim>Cybook>Kndl2>IPAD>Kndl3SO>Voyager>Oasis	So, I would be happy to hear from some lawyers on this, but here is my understanding/guess. 1) It used to be illegal for manufacturers to set fixed retail prices, but as of a recent court case (was it as recent as 2004??) it is now OK. 2) Furthermore, as I understand the term 'agency' pricing, it means that Amazon (and Apple) are not really retailers selling a product. The actual seller is now the publisher and Amazon is acting as a distributor for delivering the product. This means that the manufacturer sets the price and negotiates a handling fee (30 percent) that it pays the distributor (Amazon). Given points one and two above, I believe it would be quite possible / legal for a publisher to decide that it will no longer sell/license electronic books to retailers. There is nothing in the law that forces a company to sell a product if it doesn't want to. Instead the publisher will contract with sales agents to provide a distribution service. For this reason, I would expect the company to establish the same business model across all distributors. Furthermore, it is quite understandable that the commission is the same 30%. The publisher will negotiate one benchmark deal that others will follow. Even if either Apple or Amazon got a special percentage, each of them are large enough to demand that they also get the same percentage. However, there is an anti-trust question here. Prices can not be set in collusion by a set of manufacturers. It does seem that there are standard price points that the publishers all use. Furthermore, to the extent that these price points are negotiated (even with Apple) to end up at a common point, it may show collusion. The later publishers may have been 'forced' to agree to prices that other publishers already agreed upon. Anyway, I'm not arguing whether agency pricing was a 'smart' move, or the resulting prices are correct. Frankly, I think the publishers should have been happy with Amazon subsidizing the publisher business model. I personally would have been more happy as a consumer. In my (uneducated) opinion; however, agency pricing and similar deal structures across entities is legal. However, if the specific price levels match across publishers, then there may be legal issues.

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