Apple executive Keith Moerer took the stand in the late morning on the sixth day of the U.S. DOJ’s Apple e-book price fixing trial.
“The government focused once again on the role of MFN in the alleged price-fixing scheme,” Calvin Reid reports for Publishers Weekly. “‘I didn’t think about the impact of the MFN on other retailers,’ Moerer said, ‘It didn’t matter to us.'”
“The government also focused on the relative success of the iBookstore, asking Moerer what market share the store held in the months after launch (about 20%, Moerer said) and what its market share was after several years of operation and adding Random House in 2011 (also about 20%). The government called the iBookstore ‘a failure,’ and charged that ‘Apple pricing was unfair to consumers,’ and that ‘Apple sold fewer books because of the higher price caps,'” Reid reports. “Moerer challenged that characterization: ‘I disagree. E-book sales grew 100% last year at the iBookstore and it had over 100 million customers.’ The government countered that ‘when you drop prices you sell more books,’ and Moerer said, ‘sometimes, yes.'”
Reid reports, “But the government bluntly said, ‘Apple forgot to focus on customers, that’s why the iBookstore is a failure.’ Moerer: ‘That’s not true.'”
Read more in the full article here.
MacDailyNews Take: Some “failure” that is. 20% is quite impressive. No wonder Amazon was so pissed that they had to go running to the clueless and inept U.S. DOJ to persecute a fierce competitor.
Apple’s iBookstore “looks to have a chance to grow even further as Apple delivers desktop support for its digital books via an iBooks application for Mac, shipping with the next release of OS X, 10.9 Mavericks, sometime this fall,” Darrell Etherington writes for TechCrunch.
“The iBooks arrival on the desktop should be good for consumers, as it provides one more place to read. Cross-platform reach has been the big advantage of competing stores like the Amazon, Nook and Kobo stores so far, and while Apple’s expansion to the Mac still leaves anyone not on Apple devices out of the loop, so it’s unclear how much adoption will spike,” Etherington writes. “But it’s fair to speculate that iBooks has done well on the back of Apple’s increasingly far-reaching presence in education, since texts feature prominently in its promotional efforts around iBooks (and were again on display at the OS X iBooks unveiling at WWDC).”
Etherington writes, “iBooks on the Mac isn’t going to be revolutionary because it lets you pick up where you left off in the latest Game Of Thrones installment on your iPad, since I think a very small portion of people would prefer reading books on their computer vs. on a mobile device. But it will be huge for the education market.”
Read more in the full article here.
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the DOJ is bizarre.
No, just stupid.
I believe we are wasting good taxpayer’s money on this case. I don’t see how I have been harmed at all. Day after day I increasingly wonder why the DOJ is doing this.
This is incredible. The prosecution decides if the most successful business in the world, with the deepest ecosystem, the most Market Cap, 200 billion in revenue, 575 Million in spending consumer’s credit card numbers, the highest percentage of success (even while others declare them a failure) and the most loyal and satisfied customers is a failure. One reason they decide this is that the model on premium pricing that has helped create this success is a flop. They side with the monopoly company, with no profit after years of operation due to predatory pricing, which has driven competitors out of business by losing money to cut prices below cost, has branched out to every other retail business it can find with the same practices, driven every mom and pop retail brick and mortar business into the ground, forces other internet businesses to have a presence in their store, \ they steal other companies’ customers eyes and won’t let them go, sells consumer information to advertisers and has a stock bubble so big that when it bursts, it will drag the rest of the tech market down with it. Finally, this company has competition and the government decries conspiracy to cheat consumers by this other powerful company because they charge more for their books and have wrestled 20% market share away from the bully of internet retail. Now Amazon only has what 70% of internet book sales? WTF?
We need need a prosecuting team to go after every judge and politician linked to this case and in the chain of command. They should get access to PRISM data to nail every crook tied to this, and go after every sitting judge and politician not tied to this case once and for all. Lets fire everyone and hold emergency elections for Bill Of Rights champions.
Don’t do google, don’t do M$, don’t do samdung, don’t do amazon.
You mean don’t do evil, stupid, copying and monopolizing?
The DOJ is trying to argue that customers were harmed as a result of Apple + publishers’ collusion to fix e-book prices above the equilibrium level (the price that would be determined in a competitive market). Consumer harm would mean consumers paid more money than they should have, or bought fewer books than they would have. The DOJ says this was achieved by Apple “forcing” publishers to switch Amazon contract terms from the wholesale model (in which Amazon bought e-books outright from publishers and could therefore resell them to customers at any price Amazon wished, even at levels that may harm the publishers’ print books business and even below Amazon’s purchase cost), to the agency model (in which publishers retained the legal right to price their products to customers and Amazon was simply an agent of the seller that collected a commission upon sale).
But the DOJ position has some shortcomings. First, it is difficult to argue Amazon’s prices represent the equilibrium price level, when Amazon admits these prices were loss leaders, and their intention was to make up losses with sales of Kindles and other e-books, and become an e-publisher. Second, publishers need not have been “forced” by Apple to switch Amazon to the agency model, since it is in publishers’ individual self-interests to protect their existing print-book and publishing business from the predatory pricing decision of Amazon. And since most of Amazon’s business is already handled on an agency basis, their “shocked disbelief” at having to switch to an agency model for e-books appears contrived and self-serving. Third, the DOJ should examine the entire e-book market, not just focus on Amazon’s pricing of publishers’ select “popular and newly-released” titles.