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. 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)….

  1. 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!

  2. 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.

  3. 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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