2 Publishers Deny Claim of E-Book Price Fixing

[Top100EbooksRank]

http://www.nytimes.com/2012/05/31/bu...ce-fixing.html

The response from Macmillan addresses one of the more colorful charges by the government: that the publishers met privately over dinner in upscale restaurants to discuss their conspiracy.

John Sargent, Macmillan’s chief executive, “dined once or at most twice with peers from certain other publishing houses, but these dinners were social in nature,” Macmillan said in its filing. “No conspiracy was hatched over any such dinner.”

John Makinson, the chief executive of Penguin Group, had a “social dinner” on Jan. 28, 2009, Penguin’s filing said, but while “general book industry issues and trends were discussed at high-levels of generality, Makinson did so pursuant to antitrust legal advice and avoided competitively sensitive topics like terms of trade, prices or confidential competitive matters.”

Addressing the charge that Macmillan conspired with other publishers in late 2009 and early 2010, the filing from Macmillan said that no telephone conversation between Mr. Sargent and other publishers had involved collusion. “Indeed, more than half of these telephone ‘conversations’ lasted no more than a few seconds and were nothing more than missed calls,” the filing said.

If half of the telephone conversations lasted no more than a few seconds, what about the other half?

[sabredog]

If there were indeed only missed calls, the DoJ would not of proceeded with the case through lack of evidence.

[Fbone]

Is the DoJ going to subpoena the waiters of the restaurant?

[cfrizz]

Yeah and I've got a bridge in NY to sell you! I wonder how many times they have met since their collusion went into effect!

[stonetools]

If half of the telephone conversations lasted no more than a few seconds, what about the other half?
__________________

Its up to the DOJ to prove that those conversations had anything to do with an illegal collusion scheme. So far, the DOJ hasn't shown any evidence as to what those conversations were. If at the end of the discovery process, the DOJ can't come up with anything, then .. case dismissed.

[stonetools]

I've read the responses. ( Go HERE for links).

Macmillans's is the shorter and pithier, while Penguins' is longer and more detailed. Ofcourse they flatly deny the allegations. More interstingly, they make several new arguments.

1. According to the DOJ, Apple was the instigator of a long standing conspiracy dating back to early 2009. Not so, say the publishers. Apple was not on the publisher's radar till December 2009. It was only then that they considered the agency pricing model.
2. Prior to 2009, there was discussion of joint action by publishers but they concerned two joint ventures called Bookish for the US and Anobii for the UK. Each of those ventures involved different groups of publishers, including the Settling publishers and Random House.
3. Apple drove the bus on the negotiations as to the pricing model. Apple proposed a move to the agency pricing model on a "take it or leave it " basis. Penguin initially proposed doing business with Apple on the wholesale pricing model but Apple summarily rejected that.
4. The move to agency pricing was followed by a fall in ebook prices. That argument is problematical.
A better argument, IMO, is that the introduction of agency pricing was followed by a huge fall in HARDWARE prices- a fall that would not have happened but for Apple's introduction of the iPad. I think you can't seperate the ebook reading experience from ebook reading hardware. Like it or not, Apple's introduction of the iPad really did lead to a major fall in hardware prices, and that helped consumers. A consumer advocate would like to pretend those two things are unconnected, but a judge is going to considr that the falling hardware prices balances the rise in some ebook prices.
The defence responses' main point is that they present credible innocent explanations to most of the DOJ's arguments for a conspiracy theory. They are silent on the Steve Job's remarks, however. I guess they'll follow Apple's lead on that, which are that those remarks are inadmissible hearsay.

[DiapDealer]

4. The move to agency pricing was followed by a fall in ebook prices.

No matter what side of the fight you're on... that's a big 'ol W. T. F? right there.

[stonetools]

Originally Posted by DiapDealer

No matter what side of the fight you're on... that's a big 'ol W. T. F? right there.

No question. They argue that ebook prices IN GENERAL have fallen, but of course they have fallen DESPITE agency pricing. Of course, they have the backup "we're doing it for the long term good of the industry" and other arguments.

[tubemonkey]

Originally Posted by stonetools

Of course, they have the backup "we're doing it for the long term good of the industry" and other arguments.

They're in the way and deserve to be pushed aside. The industry will survive just fine without them. As frequently happens, those that can't keep up with the times, frequently fall by the wayside. Just ask Blackberry, Microsoft, and Palm how well they're doing in the mobile market.

[ProfCrash]

"3. Apple drove the bus on the negotiations as to the pricing model. Apple proposed a move to the agency pricing model on a "take it or leave it " basis. Penguin initially proposed doing business with Apple on the wholesale pricing model but Apple summarily rejected that."

ummmmm So aren't they basically saying it was Apple's fault? So Apple wanted Agency pricing, at maybe a different point in time than DOJ says. Penguin proposes the wholesale model. Apple says no and then we some how end up with five of the 6 publishing houses adopting the Agency model with a most favored nation clause for Apple at the exact same time.

A fall in hardware prices is a good thing. I fail to see how that should be counter balanced by an increase in e-book prices. So you pay less for the device and you should be happy to pay more for buying the thing you use the device for? Two different businesses are making money here. The Publishers are not selling e-readers so they are hurt by the decline in device prices. If anything, they were helped because less expensive ereaders meant more people buying e-books which means more money for them.

So the sellers of e-readers are making less because the hardware dropped and the seller of e-books raises the price of e-books, a different company, benefits by having more people to buy books and then admits that they made less money when they reaised the prices of e-books.

Call me confused.

Not to mention, E-reader prices were falling before the IPad was released. I am sure they fell more after the release of the IPad but the reality is that many people were discussing the magic $99 price point well before there was even discussion of the IPad.

[kennyc]

Originally Posted by tubemonkey

They're in the way and deserve to be pushed aside. The industry will survive just fine without them. As frequently happens, those that can't keep up with the times, frequently fall by the wayside. Just ask Blackberry, Microsoft, and Palm how well they're doing in the mobile market.

Yes, the "industry" is NOT the big 6, it has changed and they are doing this specifically to impede the changes that are underway.

[stonetools]

ummmmm So aren't they basically saying it was Apple's fault? So Apple wanted Agency pricing, at maybe a different point in time than DOJ says. Penguin proposes the wholesale model. Apple says no and then we some how end up with five of the 6 publishing houses adopting the Agency model with a most favored nation clause for Apple at the exact same time.

DOJ claim: There was a conspiracy between Apple and the publishers to raise ebook prices by imposing the agency pricing model on the ebook retail market.

2. Apple claim: All we wanted was the agency pricing model. We wouldn't have entered the ebook market without it. We don't care about prices. If any collusion on prices happened, the publishers did it.

3. Publisher's claim: No collusion happened. The DOJ is building a mountain of innuedo on a molehill of circumstantial evidence. The DOJ, through its misguided intervention, is ruining an attempt to maintain diversity in the ebook retail market.

The hardware argument: The one device with substantial market presence was the Kindle-made and sold by Amazon. It was a $400 eink reader with limited capability for displaying content. Following the introduction of another hardware manufacturer-Apple-with another device-the iPad-prices plunged for ebook reading hardware and options multiplied. If you are going to blame ebook prices on the agency model, then you are going to have to credit it for lower hardware prices,since Apple wouldn't have entered the market absent the agency model.
Anyway, that's the argument. Would a consumer advocate buy it? Nope-but a federal judge just might.

[stonetools]

Delete double post

[DiapDealer]

Originally Posted by stonetools

DOJ claim: There was a conspiracy between Apple and the publishers to raise ebook prices by imposing the agency pricing model on the ebook retail market.

Fixed that for you.

As much as I and others may dislike it, this lawsuit has never been about the "agency pricing model" itself... no matter how much the publishers—and now, apparently, you—seem to want to use that as a distraction. It's about Apple and a group of (supposedly) independent publishers conspiring to put in place a plan (any plan) to fix prices at a higher level. That's it. Please stop trying to insinuate that the agency model is on trial... it's not. It's about all of them coming up with a plan to affect prices together.

[MovieBird]

Originally Posted by DiapDealer

Fixed that for you.

As much as I and others may dislike it, this lawsuit has never been about the "agency pricing model" itself... no matter how much the publishers—and now, apparently, you—seem to want to use that as a distraction. It's about Apple and a group of (supposedly) independent publishers conspiring to put in place a plan (any plan) to fix prices at a higher level. That's it. Please stop trying to insinuate that the agency model is on trial... it's not. It's about all of them coming up with a plan to affect prices together.

Stop confusing the issue with facts...