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Old 05-24-2012, 07:31 PM   #1
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Apple says DoJ "sides with monopoly, rather than competition"

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Apple has accused the US government of siding "with monopoly, rather than competition" by suing Apple and six publishers for allegedly colluding to fix e-book prices. Apple's response to the Department of Justice's lawsuit offers strong words for the DoJ and those who believe Apple has engaged in a conspiracy with publishers in order to give itself an advantage in the market.

Right off the bat, Apple's response calls the DoJ's complaint "fundamentally flawed as a matter of fact and law." The electronics giant says it negotiated individual agreements with each publisher so Apple could enter the e-book market, arguing that before the launch of the iBookstore in 2010, the only real player in the e-book space was Amazon and its Kindle Store.

"At the time Apple entered the market, Amazon sold nearly nine out of every ten eBooks, and its power over price and product selection was nearly absolute," Apple wrote. "Apple’s entry spurred tremendous growth in eBook titles, range and variety of offerings, sales, and improved quality of the eBook reading experience."

Throughout its 31-page response, Apple pulls no punches in expressing its opinion about the accusations. The electronic giant says the government started with a "false premise" and calls the DoJ action "absurd." Apple also says the government fails to show how the "agency model," which is what the iBookstore uses and Amazon now uses, harms consumers. The strategy has been "long recognized as perfectly lawful," Apple argues, and if not for the agency model, Apple would not have entered the e-book market in the first place.
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Old 05-24-2012, 08:14 PM   #2
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"Apple argues, and if not for the agency model, Apple would not have entered the e-book market in the first place. "

Does that mean that if the DoJ wins the lawsuit that Apple will close their iBook store?
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Old 05-24-2012, 08:27 PM   #3
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So, what percentage of the ebook market is Apple claiming to hold? Which stores that *don't* have a dedicated wireless reader are doing better now--that being the only way to weed out the benefits of instant direct sales, as opposed to better pricing models?

The agency model isn't what's being accused of harming consumers. The harm is caused by the MFN clause and the collusion to start a new business model at the same time across several theoretically-competing companies.
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Old 05-24-2012, 09:42 PM   #4
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Sounds like a case of "Mummy, I did not do it, HE did!"
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Old 05-24-2012, 10:10 PM   #5
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Originally Posted by crossi View Post
"Apple argues, and if not for the agency model, Apple would not have entered the e-book market in the first place. "

Does that mean that if the DoJ wins the lawsuit that Apple will close their iBook store?
Well, it would if old Jobs hadn't shuffled off in search of nirvana. He always could throw a raging tantrum.
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Old 05-24-2012, 10:13 PM   #6
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range and variety of offerings, sales, and improved quality of the eBook reading experience."
apparently animated page turns and yet another drm restricted purchase avenue improved the quality of the reading experience.

Apple has again followed the same path it has for years with complaints about its devices or services - tell the complainants they are holding it wrong.
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Old 05-24-2012, 11:07 PM   #7
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apparently animated page turns and yet another drm restricted purchase avenue improved the quality of the reading experience.

Apple has again followed the same path it has for years with complaints about its devices or services - tell the complainants they are holding it wrong.
Now, let us be fair. They did open a new product line -- they now have an estimated 80% share of the worldwide patent troll market.
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Old 05-24-2012, 11:39 PM   #8
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"At the time Apple entered the market, Amazon sold nearly nine out of every ten eBooks"... riiiight.

This is a pretty awesome cry-whine; I'm really surprised it didn't just get canned internally, I can't see it doing anything more than aggravating. St. Steve would have just made sure that enough people saw mysterious money show up in accounts and all the problems just wisp themselves away... or be harassed by proxies.
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Old 05-25-2012, 09:33 AM   #9
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Yes, because how many e-readers where there in the US? Sony, which was expensive and unknown by much of the population, Nook which was new and whose bookstore wasn't as good as Amazons, and Amazon.

Gee, I can see how evil Amazon is here. They built a quality reader that was priced less than the Sony and had a better bookstore than the Sony. Amazon had the audacity to build, market, and sell an e-reader a few (I think three) years ahead of Barnes and Noble. When Barnes and Noble entered the market it did a poor job marketing, I remember the threads, and their bookstore was no where near Amazon's. Apple will still saying that no one read books so there was no point in making an e-reader or an e-bookstore.

All of this is Amazon's fault of course. Amazon should have marked up the original $400 Kindle to match Sony and never lowered the price. Or they could have waited for Sony to lower the price and matched that. Amazon should have a built a crappy bookstore that no one wanted to use because there was no selection and navigation was poor. Amazon should have developed the Nook for Barnes and Noble so that the Nook could be released at the same time as the Kindle. Amazon should have waited for Steve Jobs to realize that the people who do read, read a lot and buy a lot of books so it is a lucrative market.

Now, if Amazon had followed the above path, Amazon would not have been the dominant player in the market. E-readers would be way expensive, bookstores would uniformily suck, and there would be a bunch of equals in the market.

Silly Amazon for doing things differently and entering a market that had a ton of potential and quickly building a strong position in that market.

After all, we are all better off paying more for our books today than we were three years ago. I like shelling out more money for reading. Apple is 100% right, collusion is ok when it is used to make up a competitive gap caused by other companies not realizing that there was a market to exploit and taking their sweet time in entering the market.
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Old 05-25-2012, 09:38 AM   #10
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Apple came out with both guns blazing, that's for sure. If there's any doubt whether Apple is up for the fight, that's over.
Reading the complaint. Apple poked some big holes in the DOJ's conspiracy theory and opens up discussion beyond price increases to consideration of the entire ebook market. I know folks here are going to dismiss Apple's arguments out of hand, but a federal judge may see it different.
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Old 05-25-2012, 09:38 AM   #11
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I was convinced Apple was going to go with the; "the DoJ is absolutely correct on all counts... and we don't have a pot to pi$$ in" defense. Go figure.
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Old 05-25-2012, 09:43 AM   #12
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I was convinced Apple was going to go with the; "the DoJ is absolutely correct on all counts... and we don't have a pot to pi$$ in" defense. Go figure.
I do think that a lot of folks felt that there was NO WAY that Apple could mount any counter argument to the DOJ complaint, which was 100 per cent gospel truth.
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Old 05-25-2012, 09:45 AM   #13
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Oddly, I was just reading some posts on Charlie Stross' blog about this and how Amazon managed to get a monopsony. i.e. Amazon could dictate terms to its suppliers the way a monopoly can dictate to its buyers. So I suppose it's collusion to oppose an abusive monopsony making both sides equally bad.

Colour me unsurprised.



Damn you Firefox, monopsony is indeed a word

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Old 05-25-2012, 09:49 AM   #14
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Apple says DoJ "sides with monopoly, rather than competition" because five or six publishers agreeing to raise prices at the same time is such an essential part of competition, right?
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Old 05-25-2012, 10:08 AM   #15
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Apple says DoJ "sides with monopoly, rather than competition" because five or six publishers agreeing to raise prices at the same time is such an essential part of competition, right?
Yes. Potentially illegal businesses practices should be overlooked when the participants claim to have "done it for the greater good of our industry."

"Siding with a monopoly" is a red herring (not that I can blame them for spinning it that way). Even if the agency model could be incontrovertibly proven to be the best possible arrangement for the future of the ebook industry... that has absolutely no bearing on whether or not they played within the rules to bring the agency model to fruition. The ends do not justify the means in our legal system—and the DoJ is investigating (and indicting based on their findings) those means.

That's all. The rest is hooey. The DoJ is not responsible for protecting the continued existence of any particular industry model.

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