“The DOJ investigation into Apple [AAPL] and its alleged collusion with big publishing companies to raise e-book prices may be a painful affair, but the end result could still surprise, and could work out quite badly for the complainant in the case, Amazon,” Jonny Evans writes for Computerworld. “…At the point Apple elected to enter the business, Amazon had been putting the squeeze on publishers to deliver books at ever lower prices, while meanwhile making it increasingly difficult for smaller, independent vendors to match its prices.”
“I’m interested to find out if Amazon’s original attempts to squeeze e-book prices can really be seen as legitimate, merely because the world’s biggest online book retailer had some small fry competition,” Evans writes. “Or, as I believe, if it’s price-lowering attempts constitute another form of abuse of market power.”
Evans writes, “If you read e-books you may believe that lower book prices is good for you. Trust me, it isn’t. You only need to look at the transformation of the big hits coming out of the music industry from the diversity of yesterday to the mass market X-Factor tosh peddled today to see what the future of creative business in a low rent age can be… I’d argue that people who create content in any medium should be paid enough to focus on it.”
Much more in the full article – recommended – here.
Related articles:
Antitrust experts: Apple likely to beat U.S. DOJ, win its eBook lawsuit – April 12, 2012
Why the market shrugged off the Apple antitrust suit – April 11, 2012
What’s wrong with the U.S. DOJ? – April 11, 2012
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
Amazon’s success in forcing lower prices for e-books force publishers to stop offering e-book editions or will produce the intellectual equivalent of a Wal-Mart bookshelf. You can buy something that is shaped like a bookshelf at Wal-Mart but you wouldn’t want to actually put any weight on them.
… for e-books WILL force publishers…
Oh please… Why is it that you often see digital copies that cost more than the hardback? There is something goofy going on here…
Part of it is publishers (we’ve hear this before) clinging to their old model in a desperate attempt to keep profits from slipping.
Fact is the actual cost of printing a hard cover book is only a few dollars. The publishers don’t save huge amounts with e-books and have added costs in having to re-edit the material for an e-book. On smaller distributions it can actually cost the publisher more to sell an e-book.
DoJ and O’youmama is a bunchs of **ism. They want the name, but not the labor. They want appearance of competition, but not the real competition. I would stuck Holder and O’youmama into rearends of whoever voted them last time and this time.
DOJ has gone commando for Amazon, hence can’t get its panties in a bunch over them.
The DOJ doesn’t have their panties in a wad for Apple.
The have a wad in their panties for Capitalism…
When the leader of Russia is advocating freer, more open markets than the communist leader of America, you know you’ve got a problem.
Right you guys are! Disgusting Demo-Commies!
re: Amazon, interesting point. However, it seems that forcing lower prices is generally not something the government is going to interfere with. Consider Apple and $0.99 songs, which the labels did not want (I’m sure they are still chafing to raise prices even more). As with eBooks, it affected all the labels, but only with regard to distribution through Apple. In both cases I am for whatever price helps the content creators, ie artists, make a living. If Amazon is not winning despite being in the race first and having their own eReader, it is not Apple’s fault.
re: analogy to music
I don’t buy this analogy. First, the idea that the current star driven, lowest common denominator pop is a recent occurrence driven by the financial state of the industry is not true. That has been happening since at least the early 1970s. Using pop music as a barometer for the creative health of the music industry is also flawed. Music outside of the mainstream is flourishing because of digital distribution, which means that even the most niche artist can easily reach their global audience. That would not be happening if the major labels were still the gatekeepers of all music. Thankfully they are now fully focused on drivel and not trying to muck up artists that don’t fit their mold.
To all those who keep beating the anti-Obama drum on this I have three words for you: Texas. Alaska. Arizona.
I’m sure those three states are all “commies” too.
You’re an idiot, but thanks for playing.
OK, I’m an idiot for pointing out that several Republican, hard-core right wing states have joined the DoJ’s lawsuit? I’m an idiot for pointing out the hypocrisy of this being somehow turned into a hyper-partisan issue?
If you’re going to reduce yourself to name-calling without even making a counter-argument, one can only assume you posted while gazing at mirror.
Are the governors doing that or the democrat senates in those states?
We can’t read minds. You need to make posts more clear, and state exactly what the point is that you are making. The first sentence in your reply to Bizlaw should have been the first thing mentioned in your post.
And, btw, when state AGs get involved in these sort of things it has little to do with politics. Each of the states involved is looking more for a payout (from the accused parties) than the welfare of their citizens… who will very likely see little (if any) return on (alleged) excess money they paid for their ebooks.
Look at how they all settled with MS. How many consumers saw a dime from MS?
You, Canadian, go back to your icy rat hole, or I would stick O’youmama to your rear.
… I was born in one of the original 13 states over 60 years ago, served my nation in a time of war – mostly overseas – and have voted for both Republicans and Democrats, voting the candidate rather than the party, most years. Have been elected to town politics – and re-elected.
So. Having stated my creds, I’m going to repeat the point that so many retarded Tea Baggers need to shove into their vacuous excuses for brains. “If you’re going to reduce yourself to name-calling without even making a counter-argument, one can only assume you posted while gazing at mirror.”
I’ve been a solid American citizen – voting for more years than many of you have been alive – and I say wisdom is still wisdom, regardless of its source.
OTOH: thank you for using the proper “your/you’re/yore”.
@OkIdiot,
You only pick on “Tea Baggers” you FLEA PARTY PARASITE. Stuff your resume where the sun don’t shine you jack ass!
This New Yorker from Upstate disavows any association with the maggot to whom I am replying.
Ne’s probably from New York City – maggots all.
How many different flavors of food stamps do you live on in your upstate double wide? Comrade.
Big deal. If the country you fought for is destined to control people’s life by the name of controlling economy, then the said country isn’t really worth fighting for.
Ok is an IDIOT-LIBTARD-PARASITE. You never voted Republican in your life, you LIAR!
Let’s see:
1- No Paper.
2- No Ink.
3- No Packaging.
4- No physical storage.
Under Amazon only it means a price lower than a physical book. When Apple conspired with 5 publishers the price increased 30-50% overnight and forced all others to do the same.
e-Publishers have been around for some time- even prior to Amazon. No author was forced to accept Amazon’s terms, but all digital publishers were forced into Apple’s cartel pricing structure.
That is a huge difference.
Ys they were forced to sell to Amazon, because they had a monopoly. Amazon abused it’s monologue position to push all competitors out by defaulting prices below cost.
Think before you blabber.
Amazon did not have a monopoly- just the largest mindshare. Zinio and others have been selling ebooks for a very long time and any number of companies were selling using Adobe technology.
Just as the Kindle was not the first eReader, Amazon was not the first seller of ebooks.
As to ‘think before you blabber’ you might retract or look in a mirror.
They had >90% market share. In what world is that not a monopoly PAP?
Microsoft’s. Ask the Bush Department of Justice. They spiked the breakup of Microsoft after the Clinton DoJ beat them in court.
Amazon’s ebooks (and those prior to Amazon’s service) were basically text or simple PDF files. Apple is selling a much more enhanced eBook. As I recall, Apple had a tough time getting publishers to sign up for its services, primarily because publishers were concerned already about the low prices Amazon had already demanded from them.
Most of the standard bestsellers Apple sells are no more enhanced than Amazon’s, especially in Fiction.
While Apple’s new textbook strategy features products far more advanced than the standard Kindle fare, that is not the target of this suit.
Go crawl back into your igloo you troll!
@progressive…
1- No Brains. lol
The publishers weren’t “forced” into anything. Apple outlined their solution and the publishers happily jumped on it. Just like all the music publishers jumped on Amazon’s “solution” to sell music.
And btw, even after this whole mess is said and done, every publisher could still decide they are only going sell using the agency model.
Cook sees the writing on the wall. This DOJ stupidity will become a non-issue come January 20, 2013.
Oh, are all the Republican-controlled states going to drop the case after the next inauguration?
Why is everybody in the U.S. insisting on turning everything into a partisan issue?
Go to hell you lame as Canuk!
Your tax dollars at work. Smuggling guns to Mexican druglords = good. Taking on Amazon and selling books = bad.
Good thing the “Justice” Department is going after companies like Apple and not worrying about people like the Black Panthers who put bounties on people’s heads, dead or alive. I mean, let’s be sure our priorities are straight here, right?
Where has it been reported that the Black Panthers are not under investigation? Just because the FBI isn’t releasing daily reports on their ongoing investigations doesn’t mean they aren’t doing the legwork.
You’re an idiot; thanks for playing.
hey Hoser, STFU and take care of your own country.
You jerkwads still think the universe revolves around the dead prophet? Get a life. Apple is in for another historic fall. Just like before, resistance is futile.
Music on iTunes isn’t a legit comparison. CD’s were mostly selling for $15 for about 15 songs. The big iTunes change is that you didn’t have to buy all 15. The price for a song didn’t change much. Plus initially, iTunes was Mac + iPod only and a very small market at the time. Music folks took a flyer then Apple added a Windows version….
In books, another article indicated that Amazon had 90% of e books before. They were selling hit titles often below cost to drive people toward Kindles. Taking out Borders may also been part of the plan. They didn’t care about paper versions which they also sold but had higher distribution costs.
Recently, they’ve been selling Kindles below cost to push the ebook market.
Are they now going to sell ebooks and kindles below cost? Doesn’t leave much volume for a profit.
I think that Apple’s focus was on another feature for the iPad. They didn’t really care about profit from books. You can read Amazon or B&N sold books on the iPad. Plus their % of books sold is below both Amazon and B&N.
The doj has seemingly given the green light to Amazon to monopolize the ebook business and thus the book business. But, it doesn’t have a high entry cost and somebody with deep pockets could make things interesting.
Will be hard on B&N and publishers.
the U.S government with ample warning that it was gonna happen sat twiddling their thumbs while the mortgage fiasco grew and grew for years and then exploded costing hundreds of billions in direct loses and indirectly in a worldwide recession. Thousands of people lost their homes and jobs.
Nope NOBODY wanted to touch the mortgage monster because they knew it was too big, dangerous and a too clever ‘hero’ trying to deal with it would have run the risked of getting rolled over.
(and there was plenty of ‘illegal’ stuff going on with the mortgage business: marking billions of bucks worth of risky defaulting mortgages as triple star rated ‘safe’ and selling them to foreign banks etc )
BUT attack super high profile Apple over e-BOOKS , heck what better chance for a government lawyer/bureaucrat to make a name for himself in a no risk scenario ? Nope don’t protect the publics HOMES and JOBS but protect them from slightly more expensive ebooks (which are still in most cases cheaper than hardcovers by the way) and be lauded by much of the press as being HEROES.
The author of this piece is totally confused about what Amazon did and did not do. They (Amazon) were not “squeezing” any book publishers on ebook pricing. Instead, they paid said publishers whatever their charge and DISCOUNTING the retail priceof said ebooks to customers sometimes, even at a loss. Obviously Amazon’s pricing strategy was meant to encourage users to buy a Kindle.
Did Amazon gather 5 publishers into a room and hash out a pricing strategy between “competitors” ?
If you believe in competitive markets, then you are against cartels. Even if Apple made the bad decision of forming a cartel. You can’t have it both ways, MDN.
“Did Amazon gather 5 publishers into a room and hash out a pricing strategy between “competitors” ?”
Neither did Apple. There is no difference between the deal Apple offered the book publishers and the thousands of app developers on the two App Stores?
Amazon did, however, sell ebooks below cost to leverage their monopoly. That is illegal.