U.S. Justice Dept. to Sue Publishers, Apple, for Price Collusion?

[osnova]

Originally Posted by stonetools

In January 2010 or thereabouts, Steve Jobs suggests to the publishers that they adopt agency pricing.

Proper response by publishers at that moment should have been a noisy withdrawal, so not to associate their company with a criminal conspirary and price fixing. It's the discussions among competitors about pricing that violate the law.

[JoeD]

edit: Just finished reading the thread and someone else already covered what I posted.

[stonetools]

Originally Posted by osnova

Read my post a little bit above yours. What is relevant is price fixing, which, yes, led to higher prices. They violated the law.




Wrong. Apple was a competitor of Amazon. Entering into discussions with other competitors to fix prices was illegal for Apple as well as for the publishers. They conspired to fix prices (Apple being the forum, facilitator and a participant of a criminal conspiracy) and they did fix prices.

1.Apple is not a competitor of the publishers. It is perfectly legal for Apple to discuss with their suppliers the terms under which they will be supplied.
2. Under the agency model, the supplier sets the price. That's 100 per cent legal. In the Ios App Store, which operates under the agency model each developer ( supplier) sets the price. Thats not illegal price fixing: thats legal price setting.
If the developer sets a price of 2.99 for Ios, Google and Microsoft, thats not illegal price fixing: thats legal price setting.
In the same way, if the publisher sets a price of 14.99 for a particular novel, and offers it to Amazon, BN Kobo, etc, thats not illegal price fixing: thats legal price setting.
Where its illegal price fixing is where Random House and McMillan get together to say all mystery novels shall be 14.99 or where they decide that novel X will be 14.99 or novel Y will be 13.99.There is no evidence that the publishers did anything like that .
I think the problem here is precisely that the publishers adopted a model that gave them, rather than Amazon, control over prices and then used it to not RAISE prices, but to prevent retailer discounts from the prices that they suggested to retailers. People here really don't care about whether publishers are meeting to set pries on particular books or not: what they are mad about is that
1. publishers can set firm, non-discountable prices.
2. That those prices are higher than the discounts offered by Amazon.

[JoeD]

Originally Posted by stonetools

1.Apple is not a competitor of the publishers. It is perfectly legal for Apple to discuss with their suppliers the terms under which they will be supplied.

I think stonetools may be correct on that point. I read the other day something about it being legal to vertically fix prices e.g Apple/Publisher or Publisher/Apple whilst horizontal fixing was illegal e.g Apple/Amazon or Publisher/Publisher. I think it was on wikipedia, yes I know, not always the most reliable of sources

However, I still have a little bit of doubt as Apple could be seen as a negotiator for the publishers depending on how the discussions went. I don't know enough about US or even UK price fixing laws to really form an opinion on that one. I am interested in seeing what the DOJ/EU eventually file for and the evidence provided though as that may answer the question.

People here really don't care about whether publishers are meeting to set pries on particular books or not: what they are mad about is that

That's what we DO care about.

Whether prices have gone up or down isn't the issue (although we'll always have a good moan when they go up), it's whether they've gone up _legally_.

Also the "favoured nation" thing is really bad and I hope both Apple and Amazon eventually get brought up on it.

[Wasgo]

Originally Posted by stonetools

Where its illegal price fixing is where Random House and McMillan get together to say all mystery novels shall be 14.99 or where they decide that novel X will be 14.99 or novel Y will be 13.99.There is no evidence that the publishers did anything like that.

It's legal for Apple to say tell publishers that they can set the price and Apple will take a 30% cut. It's not necessarily legal for the publishers to tell every eBook seller that's the model they have to use to sell their books. They're dictating the terms of business preventing competition between sellers. If Apple encouraged them to switch to this strategy, or in fact necessitated it by insisting that all books sold through iBooks must be guaranteed to be the lowest selling price, they may be in trouble too.

Whether or not that will be deemed to be legal is now up to the courts.

[DiapDealer]

People here really don't care about whether publishers are meeting to set pries on particular books or not: what they are mad about is that

Stop pretending to know what other people care about and focus on things you know. Perhaps you do know more about the legalities of the situation than the DOJ, but I suspect not. If it's so perfectly clear that they did nothing wrong, then the DOJ would have dropped the matter perfunctorily. But they didn't, and a settlement is being discussed. Maybe they'll drop it later, maybe they won't; but saying there's nothing to see here is disingenuous at best. Telling people how they're feeling is just plain rude. Stop doing it.

[Elfwreck]

Originally Posted by stonetools

Where its illegal price fixing is where Random House and McMillan get together to say all mystery novels shall be 14.99 or where they decide that novel X will be 14.99 or novel Y will be 13.99.There is no evidence that the publishers did anything like that.

Except, of course, by looking at the prices of the various books, especially bestsellers, after agency pricing went into effect.

Getting together to agree "all new releases in hardcover shall be at least $12.99, and at least $14.99 if we have reason to believe it'll be on the bestseller lists," is price fixing. They don't need to break it down by genre to be illegal.

[stonetools]

Originally Posted by DiapDealer

Stop pretending to know what other people care about and focus on things you know. Perhaps you do know more about the legalities of the situation than the DOJ, but I suspect not. If it's so perfectly clear that they did nothing wrong, then the DOJ would have dropped the matter perfunctorily. But they didn't, and a settlement is being discussed. Maybe they'll drop it later, maybe they won't; but saying there's nothing to see here is disingenuous at best. Telling people how they're feeling is just plain rude. Stop doing it.

FWIW, I believe that the DOJ should investigate the matter and even file a lawsuit- if there is strong evidence of wrongdoing.Based on what we've seen so far, they don't have enough, IMO. You and others think it is. I'm happy to let the court make the call.

As to why people are mad, I know what they care about because they've said it:

"The prices went up"
"Publishers shouldn't set prices"
"Retailers should charge any price they want"
"Retailers should be allowed to discount"
"If Apple suggested (told,ordered) the publishers to adopt agency pricing, that's illegal".

Unfortunately, those aren't good arguments for an antitrust violation.
If you didn't say that, then include yourself out of my statement.

[stonetools]

Originally Posted by Elfwreck

Except, of course, by looking at the prices of the various books, especially bestsellers, after agency pricing went into effect.

Getting together to agree "all new releases in hardcover shall be at least $12.99, and at least $14.99 if we have reason to believe it'll be on the bestseller lists," is price fixing. They don't need to break it down by genre to be illegal.

And if you can prove they "got together" , you have a great case. If they consult their marketing people and their economists and their investors and come to that conclusion, then their price setting is legal. Would that satisfy you or many people here who think that price is too high? I suspect not but I'll follow DD's suggestion and let you answer that.
Based on the countless threads lamenting prices here, I'm pretty sure how a poll would turn out.

[JSWolf]

They had to have gotten together. How else would they have been able to have the EXACT date to start the agency model? That would not have. So yes, they did get together and they did break the law.

[osnova]

stonetools, from all accounts (even at the time it was happening) it appears that the big publishing did break the rules. Why are you protecting them? Is that your job in DC? No, honestly, it may still come out that what now appears to be illegal conduct was not in fact so but why would you type in pages and pages in defense of these guys?

We are not a court here, we don't put people in jail and we do not necessarily have to abide by "innocent until proven guilty" thing. We are ebook customers and we got screwed over by these guys. Why don't you share our indignation?

Even it they get acquitted, they will lose their business because they publicly (was iPad announcement public enough?) chose to screw their customers. They lost their PR battle long ago.

[stonetools]

I'm not defending anyone , I'm trying to get at the truth. If the publishers and Apple colluded and broke the law then they should get hammered. If they didn't do anything wrong then they should walk. Unfortunately on this forum they are tried and convicted without any discussion of whether they might be right and condemned for even doing what they have a right to do.
I'm trying to point out here that it's not as cut and dried as all that. Sure agency pricing means less discounts etc. but the publishers have a reason why they did what they did. You don't get the truth by hearing just one side and you don't get justice by rushing to judgment. That's how I see it.

[osnova]

Originally Posted by stonetools

You don't get the truth by hearing just one side and you don't get justice by rushing to judgment. That's how I see it.

That's fair.

[bgalbrecht]

Originally Posted by JSWolf

I still blame B&N. It's good business sense to not go with the B&N DRM because it means people who own a Sony or Kobo can't shop at B&N for eBooks. If B&N has used standard Adept DRM, then sure, all ePub customers could shop there.

I don't know what the licensing agreements are for B&N DRM, but if I were B&N, I'd be making it a lower cost alternative to Adept DRM, which requires connectivity with Adobe servers. If B&N's competitors are willing to go with a more expensive alternative in order to prevent their customers from using B&N's store, I'm not sure that's B&N's fault.

[pdurrant]

Originally Posted by bgalbrecht

I don't know what the licensing agreements are for B&N DRM, but if I were B&N, I'd be making it a lower cost alternative to Adept DRM, which requires connectivity with Adobe servers. If B&N's competitors are willing to go with a more expensive alternative in order to prevent their customers from using B&N's store, I'm not sure that's B&N's fault.

I beleive that B&N's ePub scheme uses the same server software from Adobe, and the licensing cost is the same.