Apple Loses E-Books Appeal

[howyoudoin]

Originally Posted by fjtorres

Looks like the legal experts were right and the random internet guys wrong.
Who knew?

Legal guys on online forums thrive off being contrarian. You could state something absolutely true and reasonable and they'd still try and pull rank on you just because they feel compelled to.

[darryl]

Steve is actually correct about one thing. Despite their reprehensible conduct, the cartel had a loss in Court but what they consider a win in the real world. Had they not colluded with each other and Apple in the worst way, we would not now have agency pricing. This is why I posted in another thread that the result of the Appeal was pretty well irrelevant anyway. Though it is nice to see that three appellate judges, even the Judge dissenting, saw Apple's conduct for what it was. And a very blatant case of it to.

[eschwartz]

Not irrelevant, at least Apple is suffering.

[darryl]

Originally Posted by eschwartz

Not irrelevant, at least Apple is suffering.

I suspect not. Apple now has a nice book store where it makes its 30% and doesn't have to worry about Amazon or other competition discounting.. I haven't done the sums but I doubt Apple would be too unhappy with the situation.

[kennyc]

Suffering is relative, they certainly didn't accomplish their goals, have a large fine, have constant scrutiny on all their activities and have been tarnished in the public eye....at least to those with their eyes open.

[darryl]

Originally Posted by kennyc

Suffering is relative, they certainly didn't accomplish their goals, have a large fine, have constant scrutiny on all their activities and have been tarnished in the public eye....at least to those with their eyes open.

I agree about them being tarnished in the view of many but not all. Though I do think that they did in fact accomplish their main goal. They wanted an IBook store with healthy margins untroubled by little things like the need to compete. The "fine" too is relative, and Apple is so bloated with cash that it probably would not even notice it. Though I wonder if they regard it internally as money well spent. What they did certainly created the existing market. I was browsing today and titles from the large publishers are at levels which I regard as truly ridiculous. Perhaps Apple regards the costs of its actions as an up-front payment to secure healthy profits into the indefinite future for IBooks. Probably the worst suffering for Apple is the increased scrutiny which you mention.

[fjtorres]

Originally Posted by kennyc

Suffering is relative, they certainly didn't accomplish their goals, have a large fine, have constant scrutiny on all their activities and have been tarnished in the public eye....at least to those with their eyes open.

Plus, they haven't dented Amazon at all.
If anything, they cleared the field for Kindle to take over.

And the issue was never about agency: it was about pricing levels.
Amazon gives indies a form of Agency pricing control quite happily.

If you look at average BPH pricing over the years both pre-agency and post-agency you'll see that prices went from just under $10 before to an intant spike over $12 and then started to decline. Post-conspiracy, they kept on declining to around $8 in 2013 and started rising dramatically last year to well over $9.50. (Right around when the BPHs started talking of "plateauing" ebook sales.)
And, of course, after new Agency kicked in and the average went past $10, again, BPH ebook sales saw actual, measurable declines. And the BPHs are now stuck with their shiny agency contracts for a minimum of three years, probably longer.

And since 2015 isn't 2010, Amazon does give a frak about declining BPH ebook sales because they have Indie, Inc picking up the list sales. And because declining BPH ebook sales hurts Apple and Google and Nook and Kobo--all more dependent on BPH titles--than it hurts them.

When the dust settles on the whole sordid mess, the final verdict will be that the conspiracy made everybody a loser--consumer, ebook retailer, hardware vendor, and especially the tradpub authors and publishers. Everybody, except Amazon and Indie authors.

All needless.
All they really had to do was... nothing.

[fjtorres]

From Fortune:
http://fortune.com/2015/06/30/apple-court-books/

THESIS: Poor, innocent Apple made the mistake of throwing in with a bunch of vile oligarchs.

In other words, instead of being able to piggy-back on the market position of its publishing partners in order to gain entry into this new market, Apple hitched its e-book wagon to an industry that was already actively engaged in collusion over prices—and desperately trying to resist the future. And ultimately it was the giant electronics company that got crushed under the wheels of that wagon.

Unfortunately, the evidence presented reads more like "birds of a feather, flock together... and make an easier target".

But the appeals court disagreed:

“Aikido move or not, the attractiveness of Apple’s offer to the Publisher Defendants hinged on whether it could successfully help organize them to force Amazon to an agency model and then to use their newfound collective control to raise ebook prices. The Supreme Court has defined an agreement for Sherman Act Section 1 purposes as ‘a conscious commitment to a common scheme designed to achieve an unlawful objective.’ Plainly, this use of the promise of higher prices as a bargaining chip to induce the Publisher Defendants to participate in the iBookstore constituted a conscious commitment to the goal of raising ebook prices.”

More at the source. Some nice, concise quotes.
Obviously, the appeals court followed Cote's example and write an appeals-proof ruling.
(Of course, if there are enough Mac users on the SCOTUS...)

It nails the Manhattan Syndicate for what it is but... Apple as a wide-eyed innocent doesn't fit the public record.

[eschwartz]

Originally Posted by darryl

I suspect not. Apple now has a nice book store where it makes its 30% and doesn't have to worry about Amazon or other competition discounting.. I haven't done the sums but I doubt Apple would be too unhappy with the situation.

Originally Posted by kennyc

Suffering is relative, they certainly didn't accomplish their goals, have a large fine, have constant scrutiny on all their activities and have been tarnished in the public eye....at least to those with their eyes open.

That and their store is nearly as unpopular as Barnes & Noble -- which is saying something.
How much does iBooks make them, really?


And I think it is of particular importance that they now have a monitor scrutinizing everything they do. Can't be good for day-to-day business.

[Phogg]

Originally Posted by kennyc

Suffering is relative, they certainly didn't accomplish their goals, have a large fine, have constant scrutiny on all their activities and have been tarnished in the public eye....at least to those with their eyes open.

But not tarnished on the level of the Sony root - kit fiasco.

[Shane R]

Originally Posted by eschwartz

That and their store is nearly as unpopular as Barnes & Noble -- which is saying something.
How much does iBooks make them, really?


And I think it is of particular importance that they now have a monitor scrutinizing everything they do.

I think what he's allowed to do is pretty limited to this particular area of anti-trust malfeasance.

[Shane R]

Originally Posted by kennyc

Suffering is relative, they certainly didn't accomplish their goals, have a large fine, have constant scrutiny on all their activities and have been tarnished in the public eye....at least to those with their eyes open.

Cost of doing business to the exec staff probably. They'll just sell a few thousand extra iPhones to cover the cost of the fine and move on.

[fjtorres]

Originally Posted by eschwartz

That and their store is nearly as unpopular as Barnes & Noble -- which is saying something.
How much does iBooks make them, really?

Well, if you generously give them a 10% market share of the $2B a year tradpub ebook business, their 30% cut will amount to $60M a year so they should breakeven on the fine some time early in 2018.

If you are a true believer and give them a blue sky 15% their $90M a year cut would mean they'll recover the $450M fine some time next year.

(That is why they were fined that number: to ensure they don't profit from the crime.)

I rather doubt they are really as unpopular as Nook since Nook seems to run in the 6-8% range, about as much as Kobo and Google. Still, Nook is still a bit more Indie friendly than Apple so it's not impossible.

I do think it is time to rethink the consensus that Kindle holds a two thirds market share of commercial ebook sales. Using Nook as a benchmark it is hard to guesstimate Kindle any lower than 70% and easier to project them at 75%.
Considering they were down to 54% in spring 2010 before the conspiracy kicked in, agency has proven to be very good to Amazon.

[eschwartz]

Originally Posted by Shane R

I think what he's allowed to do is pretty limited to this particular area of anti-trust malfeasance.

Apparently Apple were very discomfited by his interviews. Something fishy.

Anyway, for the execs to have to spend time with him distracts them from their other duties. Apple is only wrong in that that is what the monitor is supposed to do anyway.

Apple's sales model trends in the direction of anti-trust, so having a monitor is doubtless an inconvenience. I would not be entirely surprised if at some point they end up in court again, as a direct result of having a monitor poking his nose into things.

[Sydney's Mom]

Originally Posted by howyoudoin

Legal guys on online forums thrive off being contrarian. You could state something absolutely true and reasonable and they'd still try and pull rank on you just because they feel compelled to.

I do not agree (and am not just being contrarian). I read all the briefs, the decision, the briefs on appeal, and even the little bit I remembered from Antitrust Law 35 years ago, this was a clear violation. There is no--but it was for the greater good-defense. If you think there is an illegal monopoly, you go to the Justice department, as Amazon did with the Apple BPH conspiracy. There is no claim of self-defense to a violation of the Sherman Act (or any white collar crimes I can think of. But you can call me out on that one).

I get my jollies fighting with the IRS--I don't need to troll.