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Originally Posted by pwalker8
When there is one large corporation that has 90% of the market, then bringing in two more large corporations means more competition. That's kind of the definition of competition. More companies selling the same goods.
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A manifestly ridiculous statement. The Oxford dictionary defines competition as "The activity or condition of striving to gain or win something by defeating or establishing superiority over others." Stores simply selling the same product simply doesn't qualify.
Quote:
Originally Posted by pwalker8
From the publishers' point of view, having more companies out there meant that Amazon had less leverage over them. That is why the publishers wanted competition.
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Actually that's one reason why the Publishers wanted no competition. But they now have it for the first time in many years. From Indies. These competition loving dinosaurs for some reason agreed with Apple, as the Appeals court wrote, "....... to raise consumer‐facing ebook prices by eliminating retail price competition."*
A longer quote from the Appeals Court is in order.
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Market dominance may, however, arise “as a consequence of a superior product, business acumen, or historic accident,” and is “not only not unlawful; it is an important element of the free market system.”* Trinko, 540 U.S. at 407 (internal quotation marks omitted).**The ability to provide goods at particularly low prices is one way that a firm can gain such an edge in the marketplace.* Competitors are, of course, entitled to challenge dominant firms by offering, among other things, superior products and lower prices.* * But success is not guaranteed.**A dominant firm charging low prices may have proven itself more efficient than its competitors, such that a potential new entrant’s inability to earn a profit would result not from any artificial “barriers to entry,” but rather from the fact that, in light of the value proposition offered by the dominant firm, consumers would not choose to buy the new entrant’s products at the price it is willing and able to offer.* * See Einer Elhauge, United States Antitrust Law and Economics 2 (2d ed. 2011) (“If a firm makes a better mousetrap, and the world beats a path to its door, it may drive out all rivals and establish a monopoly; but that is a good result, not a bad one.”).
From this perspective, the dissent’s contention that Apple could not have entered the ebook retail market without the price‐fixing conspiracy, because it could not have profited either by charging more than Amazon or by following Amazon’s pricing, is a complete non sequitur.**The posited dilemma is the whole point of competition: if Apple could not turn a profit by selling new releases and bestsellers at $9.99, or if it could not make the iBookstore and iPad so attractive that consumers would pay more than $9.99 to buy and read those ebooks on its platform, then there was no place for its platform in the ebook retail market.
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Quote:
Originally Posted by pwalker8
In general, all three of the big companies (Amazon, B&N and Apple) had their customers locked into a infrastructure. Of course, all three allowed side loading, but few customers are willing to jump through those hoops. So the real competition is for which infrastructure a customer wants to buy into. None of them ever competed on price, even during the time period when there was no agency.
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Think about your last sentence. The phrase hoist on your own petard comes to mind. Clearly Amazon was competing on price by discounting the ebooks available in its infrastructure.
I'll finish this post with another relevant quote from the Court.
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In actuality, the district court’s fact‐finding illustrates that Apple organized the Publisher Defendants’ price‐fixing conspiracy not because it was a necessary precondition to market entry, but because it was a convenient bargaining chip. Apple was operating under a looming deadline and recognized that, by aligning its interests with those of the Publisher Defendants and offering them a way to raise prices across the ebook market, it could gain quick entry into the market on extremely favorable terms, including the elimination of retail price competition from Amazon.**But the offer to orchestrate a horizontal conspiracy to raise prices is not a legitimate way to sweeten a deal.*
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