What’s wrong with the U.S. DOJ?

“What should be the price of the paperless word, now that books are going digital in one of the most important transformations in history?” Wayne Crews asks for Forbes. “Only the Justice Department knows, it would seem.”

“The Antitrust Division has filed an antitrust suit against Apple and several publishers (Simon & Schuster, NewsCorp’s HarperCollins, Hachette, Pearson, PLC’s Penguin Group (USA) and Macmillan),” Crews writes. “The complaint seems to be that collusion and smoke-filled rooms paved the way to a deal by which Apple gets a 30 percent cut of the publishers’ eBooks sold for Apple devices, while other vendors are forbidden from selling below a pre-specified price.”

Crews writes, “Such ordinary business deals, you see, involve a now-disparaged free market instrument called a “contract” and may not be permitted. Details aren’t complete but this arrangement appears to have been a normal response to Amazon’s deep discounts of ebooks below physical book prices. Publishers likely feared Amazon’s increasing ebook pricing sway and its potential power to undermine physical book sales.”

Crews writes, “As Steve Jobs himself put it in the Walter Isaacson book, ‘We’ll go to [an] agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that’s what you want anyway.’ That quote was invoked as damning by the DoJ heroes.”

Read more in the full article here.

MacDailyNews Take: Again, the U.S. DOJ is plainly inept.

Related articles:
Macmillan CEO blasts U.S. DOJ; gov’t on verge of killing real competition for appearance of competition – April 11, 2012
U.S. DOJ hits Apple,major publishers with antitrust lawsuit, alleges collusion on eBook prices – April 11, 2012
U.S. DOJ may sue Apple over ebook price-fixing as early as today, sources say – April 11, 2012

68 Comments

  1. If Apple were smart, they would have had machine gun carrying members of the New Black Panther Party (wearing hoodies) announce the eBook initiative and pricing. That would have guaranteed the DoJ would not prosecute.

      1. I agree that it is pathetic what our once great country has become under the current administration, which uses pretend law to club its adversaries. Pathetic, but reality. Oh yeah, and if you are white, and planning to vote in urban Philadelphia, best take a firearm.

        1. Blah, blah, blah, blah. Oh yeh. Things were sooooooooo much better under Bush. He loved the middle and working class. Oh wait, what’s that — the world’s economy crashed under Bush’s deregulation? Nah. Obama must have made it happen in advance of becoming president.

          1. Everything is wrong the US DOJ and all LibTARD-Commies!!!!!

            Things were head and shoulders better with Bush than the illegal-alien-fake-birth-certifcate-phony-social-security-card-commie-in-chief!!!!

          2. You are right. It was awful under Bush. Annual deficit – $170 billion versus $1.6 trillion per year under O. Unemployment about 7% under Bush; 9% under Obama, not counting the people who gave up looking. Gas – $2.00 under Bush; $4.00 under Zero. And the rule of law – understandable under Bush; non-existent under O. Has Jon Corzine been indicted yet for stealing $1 billion in broad daylight from MF Global small client accounts? No, but then he is a Democrat so he is allowed. Obama promised to lower the level of the seas. Instead, he has lowered the level of our entire culture and society to that of pack animals, except that is an insult to animals.

            1. Well said, my only beef is that the real unemployment numbers are much higher than the phony, made up numbers we are fed in the news.

      1. Actually, you are wrong. Holder/Obama DoJ refused to prosecute New Black Panther Party members standing outside a Philadelphia polling place on armed with automatic weapons. They deemed this not to be illegal intimidation.

      1. Janice – we will find out if the 48% who pay no taxes, but get free food, housing subsidies, cell phone subsidies, education subsidies are willing to sell their freedom for all the freebies, that the working taxpayers pay for. So, will the 48% make the 52% slaves that pay for all their everyday expenses. It will be close. And of course, it is not polite to make sure voters are actual citizens by requiring identification. Bribery and the Chicago Way, including Vote of the Living Dead, are the features of the O.

        1. True, though even the 48% have the example of Greece as a cautionary tale. (At least the ones who read a newspaper.) As a great lady once said, “eventually, they run out of other people’s money.” If we choose the wrong path, doom.

          1. Yes. 48% pay no federal taxes. Look it up. And you can also look up the number on Food Stamps, now conveniently provided on an easy to use reloadable card, that is non-discreet, if freeloading embarrasses anyone anymore. And Obama is running commercials promoting people to sign up for Food Stamps for those times of month when bills are hard to pay. Are you truly unaware of all this? Oh yeah, I forgot, you are a Democrat.

            1. There’s yet another ad encouraging folks to see if they’re eligible for the Earned Income Tax Credit, with a graphic showing pennies raining down and an inverted umbrella to catch all that “free money”.

              The more made dependent on government largesse, the bigger the vote for those who will maintain it.

          2. Artist – from the Brooking Institute, liberal think tank, 46.4 % of households pay no federal income tax. Per the Heritage Foundation – 39% of households pay no Federal income tax.

            http://www.taxpolicycenter.org/taxtopics/federal-taxes-households.cfm

            15% of the population gets free food through food stamps. This is up several million during the Obama administration.

            Safelink is the federal program to provide free cell phones to those who are not too embarrassed to have somebody else pay for their cell phone. Statistics on the number of leeches using this service are hard to come by.

            Health care – many Americans now expect free health care, that is health care paid for by anybody but them. The Georgetown law school slut expects taxpayers to buy her birth control pills.

            Education – many students these days expect tax payer subsided educations, so they can become productive majoring in things like Queer Studies, with a minor in LGBTRP positions.

            Mortgages – everybody is entitled to a house, even if it must be paid for by their neighbor (poor guy, still struggling to pay for the sluts pills)

            1. Evolution of a dishonest argument:
              “the 48% who pay no taxes”
              becomes:
              “Yes. 48% pay no federal taxes.”
              becomes:
              “46.4 % of households pay no federal income tax.”

              Summary:
              “no taxes” -> “no federal taxes” -> “no federal income tax”

              The same person, Kent, said all three of those things, gradually backing away from his initial completely dishonest and misleading statement.
              The truth is that the poor and middle-class pay disproportionately MORE in taxes than the upper-middle-class and the rich. Kent likes to pretend that Social Security Tax, Medicare, and other payroll taxes don’t exist. He likes to ignore that fact that sales taxes are inherently regressive, as those with income closer to being just enough to pay for their needs pay sales taxes on all (or almost all) of their income when they buy food, other necessities, and incidental items. The rich can put a LOT of their income into savings, where they pay no income tax.

              Mitt Romney paid an effective tax rate of about 14% in recent years. I bet that is LESS than you pay, and less than a lot of middle-class (and probably sometimes even poor) people paid. Link (note that this is a very conservative website: http://www.freerepublic.com/focus/f-news/2847276/posts )

              Face it – if you argue that the poor and middle-class aren’t paying enough in taxes, but the rich are paying too much, you are either lying or ignorant.

            2. Federal income tax is the most onerous tax and complete BS. Punish success. And the Income tax is extremely convoluted and confusing by design. They want us all to be criminals.

              Flat tax is the only fair tax.

              Anyone paying attention knew that Kent was talking about the Federal Income tax all along. Only a complete DemoTURD-LiberalSCUM like Krion-ass would conveniently pretend not to understand what Kent was saying.

              This Buffet rule is complete BS. Everything you commies spew is complete BS. Democrats suck the life blood out of everything good and honorable. Democrats are Ultra – Racists. Democrats are HATERS. Democrats are THIEVES. Democrats are PARASITES!!!!!

            3. Despite the articulate and well-supported arguments of “Proven Fact,” I’m going to stick to my observation that Kent was deliberately misleading. I suppose now I should add caps and exclamation marks to make my points more persuasive.
              Oh, for the record, I’m probably voting against Obama this fall, but it’s because of the way he has continued the Republican-Democrat bipartisan stripping of our freedoms (NDAA, HR347, et al), not because of social policy.
              If you’ve bought into the Democrat versus Republican mind game, then you’ve ceded control of your country to powerful corporations and the ultra-rich. If you want small government, you should be allies with anti-corruption activists. Corruption requires a very involved government to make those convoluted tax codes you despise. So, without real campaign finance reform, you’ll never be able to make government smaller. But, if you stay distracted by R v. D politics, you’ll never see who is really screwing you over. Good luck with playing into their game.

  2. Actually, this quote from Isaacson’s book is only part of the story.

    Back in 2010 Jobs said to Mossberg that initially prices will be higher, but in the long run this agency model would allow publishers to sell books cheaper than $9.99 that Amazon’s monopoly has set. There are various kinds of books — different volume, different importance and status, and this will be shown in price, though not now yet.

    1. How long until that happens? They promised the same thing for CDs over audio tape, and DVD over VHS tape. In both cases: lower production costs of the distribution medium itself.

      DVDs offered better quality video and extra features on disc, but CDs only offered clearer audio and should have beat cassettes on price soon after coming to market.

  3. I saw on tv this report on how Obama’s golf buddy is this UBS CEO who specializes in moving money from the US to tax-sheltered countries for the rich. I see how Goldman-Sachs was behind the repeal of the 1930’s Glass-Steagal Act and the TARP bailout of AIG and how they have a sweet computer setup to possibly control the stock market. It seems the DOJ bosses may be bribed to fuss with popular Apple so they can ignore the real crimes.

  4. Isn’t this typical operating procedure for the Chicago political style that current resides in the White House?

    “Bring the iPad assembly jobs back to the U.S. or else…”
    “We cannot. They aren’t coming back.”
    “Holder will cause you trouble for disobeying…”

  5. One thing is resoundingly clear- the republican party and conservatives are hate-mongering, inept racists who should all be deported along with their constituents. Unfortunately, there are many on the left and in the center who are equally clueless. I am sick of them all. As Brian Wilson sang, “I just wasn’t made for these times.” Whether I’d prefer the past or the future is unknowable, but I don’t have to read everything today just to aggravate myself, do I?… I also can’t help but wonder- “What would Steve say?”…

    1. What the heck does this article have to do w/Republicans? You do know that the head of the Justice Dept.–Eric Holder–is a Democrat and reports to President Obama, right? You’re pathetic.

  6. As a small publisher who has just put his book, On The Safe Edge, onto the iBookstore, I REALLY prefer Apple’s model. I have been dealing with the physical distribution system for the past couple of decades, and have always found that the publisher ends up paying for the inefficiencies of wholesaling and distributing. With Apple, I can act as the actual retailer/bookstore, giving only 30% away (as the price of providing the service of electronically bundling and distributing the publication), rather than the industry standards of 55% to a wholesaler or 45% to a distributor (neither of which pay shipping to me). Put another way, small publishers get to make 70%, 55%, or 45%, depending on the model in force. As a publisher or self-published author, which would you choose?

    Oh, and with digital, I don’t have the ~$10k-20k to outlay for printing and shipping to a warehouse for which I also have to pay.

    Under no circumstances would I want the DOJ to tell me that I cannot continue that arrangement with Apple. At the very least as a result of the suit, Apple should remain able to provide me a choice of either the agency or wholesale. That way, I can maintain control of my intellectual property in a manner that is both easy and provides me with a contract type that gives me the best return.

    The DOJ would do me a GREAT disservice if it killed Apple’s ability to offer an agency model to me.

    1. Trevor,
      Those are all very good points, and interesting. But they apply in a free market system where you as an entrepreneur get to decide how to market your product. Obama has told us that he rejects the Free Market system because he prefers the central command and control, with him and his functionaries advising you how you are permitted to sell and at what price. You should be happy they let you live. Do not complain about the regulations. You are aware Obama just used his executive authority to add 400 new IRS enforcers. They are watching you.

          1. That’s BS Johnnnnnn. There should be less IRS agents. Who the hell in their right mind would want more IRS agents???? The income tax is made as confusing as possible to make us all criminals on purpose by DemoThieves!

            The wealthy pay 70% of all federal taxes and probably all taxes. There are not enough “wealthy” people to satiate you Parasite Takers. Get off your asses, work your asses off, and earn you own freaking keep. You effing LOSERS!!!!!!

            LIBTARDS ARE THE WORST!!!!!!! AND EVIL!!!!!!!!!!

    1. Somewhere in Apple’s docs., I read that they recommend that the price on the iBookstore should be about half of the retail price of the hardcover. That seems more than reasonable to me, and it’s what I did. Actually, I went to a price a bit below half the physical copy price, even though the research for, writing of, and layout of the text of the book costs were way more than the total printing/shipping costs of the physical copy.

      Also, don’t forget to factor in the cost of lay-out/preparation/testing of the ebook, which is not trivial, either (unless you have the very, very simplest to non-existence of formatting in your ebook)….

  7. It’s the anti business policies of Obama and his cronies. Business is evil and corrupt and must be tightly controlled. Apple is just making too much money. Vote these fools out come November!

  8. This comment thread is somewhat hilarious – in that the DOJ lawsuit is entirely about ensuring that a free market actually exists.

    To be clear – the DOJ has absolutely no issue with an agency model. It has no issue with publishers being able to set the price of the book on iBooks. What it has an issue with is Apple requiring that no other vendor can sell that book any cheaper. Ask yourself this question: why shouldn’t Amazon have the right to use e-books as a loss leader and sell at a discount? In what world should Apple have pricing controls over Amazon for a product neither of them controls? Additionally, why should publishers have the power to collude in order to arbitrarily set prices? Shouldn’t there be competition for my dollars, with price being one of those competitive variables?

    And, as an avid e-book reader, I’m looking forward to actually having e-bookstores compete for my business via price, instead of right now, where there is no differentiation amongst the four largest sellers.

    But I suppose that’s too hard for the fanboys.

  9. Disclosure:
    I have been and continue to be a customer of the Amazon Kindle format AND am also a customer of the Apple bookstore. I also own stock in both companies.

    Books that used to be $9.99 every day via Amazon for the Kindle overnight zoomed to $12-20 per book. No more content- just a lot higher price.

    This happened across the industry in the blink of an eye. The catalyst was one Steven Paul Jobs, Apple and the large publishing houses. It looks, smells and seems to be collusion.

    Don;t plan on spending those dividend checks just yet. Some of that money will be paid to settle the systemic shakedown of consumers by Jobs, Apple and Co.

    1. Amazon was undercutting there own wholesale price paid and taking a loss to tie users to buying through them, they also pulled 3 major book sellers because they got mad at them for going to this Apple Offered Option.

      Mark my Words, Amazon will be brought into this directly since they are the ones pushing to tie users to this, Amazon will be the one hurt by this more in the end, Also since this is a civil complaint and not criminal things can turn very quickly on Amazon.

      Amazon will be seen as the big loser here after all the facts come out, And also in closing if you had read and understand the report, these are all Accusations that can clear Apple and the others other then injuring them.

      Funny thing is all the boasting about Steve Jobs Words being a Smoking Gun in the Biography are classified as Hear Say, and unless can be proven as the true meaning of fact with intent of harm, are completely Admissible in court as third party.

    2. That would be because Amazon was selling at a loss in order to corner the market, at which time they would have raised prices to whatever they wanted. This is known as anti-competitive behavior. But I wouldn’t expect a socialist such as yourself to understand that. Instead it’s all about “I have to pay more!” Never mind less money going into the pockets of the author, editor, and publisher — you know, the people doing the actual work — and more going into the pocket of Amazon for doing nothing whatsoever.

    1. F-BUTT,

      Several thousand studies have linked low IQ to prejudice.racism and liberalism. One needs to look no further than the comments on here to see that this is accurate.

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