Apple eBook price fixing case going to court

[Graham]

Originally Posted by John F

"The Apple e-books trial takes a detour into the absurd"

http://tech.fortune.cnn.com/2013/06/...ce=yahoo_quote

At least the amount of detail they went into relegated this to an insight into Jobs' thinking with no real advantage to either side.

The original email as presented by the DoJ looked pretty damning; then we had Cue showing that it was just a draft, and presenting the 'real' version of the email, which was more favourable to Apple.

Now we know that Cue's version was also just a draft, and an earlier draft at that, and it looks as though Jobs didn't actually send any of the versions to Cue.

Graham

[kennyc]

Summation from Apple: If you rule against us, it's the end of the world!

http://www.theregister.co.uk/2013/06...ing_arguments/

[Barcey]

So the summary of Apple's arguments are:

"We didn't do anything wrong because this is the way we always do business."

"We're Apple, we're good, we hire a lot of people in the USA so we didn't do anything wrong"

"We didn't conspire because our negotiations were very tough and they would have been much easier if we were conspiring."

"Steve Jobs was very confused when he wrote that draft email and he never sent it. He later corrected him self in an earlier draft of the email which he also never sent."

"We weren't the ring leader in this because B&N earlier talked to the publishers about the same idea."

"If you punish us it will send shivers through other businesses that want to rig a market so they don't have to compete on price while allowing publishers to conspire to artificially raise prices at the expense of consumers."

Sounds iron clad to me. The judge will obviously rule in their favour.

I was actually disappointed in the DoJ case. I think they could have done a much better job. I don't know why they didn't bring in the Walt Mossberg video from the iPad launch where Steve Jobs told him the prices would be the same, all prior to the publishers telling Amazon.

[kennyc]

Publishers Weekly is putting out its first ebook, an account of the Apple price-fixing case titled The Battle of $9.99: How Apple, Amazon and the "Big Six" Publishers Changed the E-Book Business Overnight, written by PW senior editor Andrew Albanese.

http://www.npr.org/blogs/thetwo-way/...trial-wraps-up

[fjtorres]

Originally Posted by Barcey

"If you punish us it will send shivers through other businesses that want to rig a market so they don't have to compete on price while allowing publishers to conspire to artificially raise prices at the expense of consumers."

Yeah.
I hope the judge heard this too.

[leebase]

Originally Posted by HarryT

Given that it would almost certainly be cheaper for them to pay the fine, as the publishers involved in the case have done, it would seem reasonable to think that they believe that they have a good chance of being found innocent.

Yep. And I think they clearly have the upper hand at this time (closing arguments today).

Apple never had to make the case "there was no conspiracy" only "Apple did not conspire". The fact that they negotiated with the publishers individually, argued over different terms...sure makes it difficult to prove a conspiracy.

Apple also did not have to defend the raising of ebook prices. It's the publishers who set prices...Apple need only set things up to make it possible to sell ebooks at a profit. The Most Favored Nation clause does that. Now it doesn't matter to Apple whether or not Amazon sells books at a loss...Apple could match the prices and still make money.

The publishers ALREADY had a reason to resent Amazon's predatory pricing completely without Apple.

Basically Amazon made it such that NOBODY BUT AMAZON could afford to sell ebooks.

Of couse, I don't expect anyone's opinion to change.

[tubemonkey]

Originally Posted by leebase

The publishers ALREADY had a reason to resent Amazon's predatory pricing completely without Apple.

Basically Amazon made it such that NOBODY BUT AMAZON could afford to sell ebooks.

Heaven forbid Apple should have to compete on price.

[leebase]

Originally Posted by Fbone

In the end, Agency pricing is alive and well in the US. I'm beginning to think that regardless of the lawsuit's outcome Apple still wins.

Apple will win because it is not against the law to have agency pricing. Before Apple entered the market, the publishers were powerless against Amazon who had 90% of the ebook market due to selling the publisher's products below cost. Amazon is also the largest book seller period...by far. As shown by Amazon's removing the "buy" button from ALL of a publisher's books due to battling over ebook pricing...the publisher's fear of Amazon was justified.

Apple never had to prove anything about pricing....but if the publishers had gone to court, they could have argued that Agency pricing gave THEM not Amazon, pricing power. But that does nothing to say that CONSUMERS are harmed as there is near infinite choices for books on the market.

No one has to buy a Stephen King novel. If the publishers price it too high, one could buy a DIFFERENT book. And there are millions of books available for sale far lower than a new release ebook.

Lee

[leebase]

Originally Posted by fjtorres

Oh, unless the judge orders apply Apple to divest iBooks they definitely have won

That's funny. So it's not the company with 90% (pre Agency) market share that must be dealt with....but Apple who now has 20%?

Apple who's device has Apps from all the book stores, including Amazon. That's the company threatening the market. Not the 800lb gorilla who controls both physical and ebook sales and who's book reader only works with Amazon sold books?

I wish the sales numbers would have come out in the trial. It is very evident that Amazon sells more books to iPad/iPhone owners than Apple does. Probably 3 times more. Even now -- after agency pricing.

[leebase]

Originally Posted by tubemonkey

Heaven forbid Apple should have to compete on price.

Heaven forbid a retailer would require the ability to sell products at a profit. Amazon buying ebooks from the publishers at $12.50 and selling them at $9.99 -- the ENTIRE NY TIMES BEST SELLERS list -- would keep ANYONE from being able to compete.

And books STILL have to compete on price....among all the other things books have to compete on. It's merely that the publishers get to set that price. A publisher who sets a price too high, won't sell their product.

[leebase]

Originally Posted by DiapDealer

What's funniest is that the publishers were all tricked into believing that their best course of action was to illegally (potentially illegal, to be generous) conspire to create a situation where Amazon could make even more money selling their books ... all to gain a tiny sliver (a tiny, almost ALL profit sliver, mind you) of the ebook pie for Apple. How do you kill a giant? Apparently by helping them make even more money selling a product they've already proven themselves to be more adept than everybody else at selling.

The publishers sell their new release books for $26 -- not $10. It is THAT money they publishers were working hard to preserve. And it's THAT reason that the kindle was able to be sold for $400 or so (originally). "Buy this very expensive book reading device because you can save more than half on the price of new books".

And with the rise of ebooks came the threat to the publishers hard back sales.

And yes, Amazon will make more money selling ebooks. But without that huge price incentive, they would never have gotten the kindle off the ground.

[leebase]

Originally Posted by Barcey

I was actually disappointed in the DoJ case. I think they could have done a much better job. I don't know why they didn't bring in the Walt Mossberg video from the iPad launch where Steve Jobs told him the prices would be the same, all prior to the publishers telling Amazon.

The Most Favored Nation clause means that no matter WHAT the publishers and Amazon do - Apple can offer the same prices. Steve Jobs didn't NEED to know anything about what was going to happen with Amazon to make his statement.

The publishers did not need Amazon to go with the Agency model. They would have withheld the ebooks, "windowing" them -- just as they do with the paperback versions.

[DiapDealer]

Originally Posted by leebase

The publishers sell their new release books for $26 -- not $10. It is THAT money they publishers were working hard to preserve.

They may have slapped a $26 list price on their new-releases, but there was damn-few people ever paying that price. MSRP to the discounted retail price is never a valid comparison. Every single book-seller in the world (e- and physical) were guilty of "devalueing" the publishers' hard-cover releases

[leebase]

Originally Posted by DiapDealer

They may have slapped a $26 list price on their new-releases, but there was damn-few people ever paying that price. MSRP to the discounted retail price is never a valid comparison. Every single book-seller in the world (e- and physical) were guilty of "devalueing" the publishers' hard-cover releases

Not down to $9.99

Even when Walmart and Costco would use the release of a Harry Potter book as a lost leader to get folks into the stores, they didn't set the price at $9.99

Nobody is expected to continue to do business in a way that's harmful to their business. The publishers had a rogue but very powerful retailer who was using predatory pricing to buy marketshare at the expense of the Publisher's very own business.

Your ability as a consumer to shop on price remains unchanged. If the publishers charge more for an ebook than you are willing to pay, you simply don't buy the book.

This whole notion of "raise prices" is a misnomer. It accepts the $9.99 "sell at a loss price" that Amazon was practicing as the basis of comparison. Even at $14.99, the price of a new ebook is cheaper than the "listed at $28 and sold on sale for $22" price of the hardback.

The price competition still exists. Do I buy xyz book from publisher A for $14.99 or do I buy abc book from indie author B for $1.99? Or read any of the millions of free ebooks...etc. etc.

The publishers simple didn't have the power -- before Apple -- to deal with Amazon. The publishers STILL have to deal with the consumer.

[kennyc]

Lee, do you work for Apple?