Apple loses appeal in e-book price-fixing case

“A divided federal appeals court on Tuesday said Apple Inc. orchestrated a conspiracy with five publishers to increase e-book prices, in a victory for the U.S. Justice Department,” Nate Raymond and Jonathan Stempel report for Reuters. “By a 2-1 vote, the 2nd U.S. Circuit Court of Appeals agreed with a lower court judge that the conspiracy violated federal antitrust law, and that the judge acted properly in imposing an injunction to prevent a recurrence.”

“The ruling will uphold not just Apple’s civil liability but also the terms of an injunction that limited its agreements with publishers,” Raymond and Stempel report. “The decision also means Apple will be required to pay $450 million as part of a related settlement with 33 attorneys general and lawyers for a class of consumers.”

“The Justice Department, which secured the ruling following a non-jury trial, said the scheme caused some e-book prices to rise to $12.99 or $14.99 from the $9.99 price charged by the dominant player in the market, Amazon.com Inc,” Raymond and Stempel report. “In a dissenting opinion, U.S. Circuit Judge Dennis Jacobs said he would have reversed Cote’s 2013 ruling, finding that Apple’s behavior was pro-competitive in taking on a ‘monopolist,’ Amazon, which controlled 90 percent of the market. ‘Apple took steps to compete with a monopolist and open the market to more entrants, generating only minor competitive restraints in the process,’ Jacobs wrote.”

Read more in the full article here.

MacDailyNews Take: Travesty of justice.

The U.S. DOJ, with the aid of a handful of judges, killed real competition in order to save the appearance of competition.

SEE ALSO:
In pretrial view, judge says leaning toward U.S. DOJ over Apple in e-books case – May 24, 2013
Lawyers have complained for years that Judge Denise Cote pre-judges cases before she enters the courtroom – August 14, 2013

George Priest: Apple should win its e-book appeal – December 15, 2014
Obama’s DOJ brings in its big guns to Apple e-book appeal – December 11, 2014
U.S. Federal Puppet Denise Cote says she’s troubled by Apple $450 million e-books settlement deal – July 24, 2014
U.S. Federal Puppet Denise Cote: Apple cannot escape U.S. states’ e-book antitrust cases – April 15, 2014
U.S. Federal Puppet Denise Cote: ‘Apple’s reaction to the existence of a monitorship underscores the wisdom of its imposition’ – January 16, 2014
Judge Denise Cote denies Apple request block her friend as ‘antitrust compliance monitor’ – January 13, 2014
Antitrust monitor Bromwich rebuts Apple accusations of ‘unconstitutional’ investigation – December 31, 2013
Apple seeks to freeze its U.S. e-books ‘antitrust monitor’ – December 15, 2013
The persecution of Apple: Is the U.S. government’s ebook investigation out of control? – December 10, 2013
Apple’s Star Chamber: An abusive judge and her prosecutor friend besiege the tech maker – December 5, 2013
Apple takes aim not just at court-ordered e-books monitor, but also at U.S. District Judge Denise Cote herself – December 2, 2013
U.S.A. v. Apple: Judge Denise Cote assigns DOJ monitor in Apple ebook price-fixing case – October 17, 2013
U.S.A. v. Apple: Judge issues injunction against Apple in ebooks antitrust case; largely in line with what DOJ wanted – September 6, 2013
U.S.A. v. Apple: Judge Denise Cote says Apple needs third-party supervision after ‘blatant’ ebook price fixing – August 28, 2013

65 Comments

    1. This trial is not about Amazon, it is about what Apple specifically did in the publishing industry to inflate prices and force out competition.

      I have discussed this on here before. I’m in the eBook industry and have been for 5 years. All of you guys just shoot your lieholes off… have any of you read even 1 page of court documents available publicly? There’s thousands of pages. Affidavits. Evidence. All for you to analyze and research.

      But you haven’t done that, and your reaction is simply one of being a fanboy. A corporation can do no wrong. You vigorously and irrationally defend a corporation. Stop worshipping corporations. Stop being emotional.

      There is no conspiracy. Apple colluded with publishers to force out competition and inflate prices on new releases. The evidence is there.

      Eddy Cue that SOB forced one of the big five by threatening to not approve some Apps of that publisher. The underhanded and heavyhanded bullshit Apple elicited was unacceptable.

      If Apple had got their way, all of the publishers would have been hamstrung by Apple’s draconian terms and they were all in Apple’s back pocket colluding together. Those terms specifically barred them from selling less elsewhere under certain conditions. It was complete bullshit and some publishers dissented and never signed.

      Even Kobo publicly objected to Apple. The industry is much better off.

      So stop thinking there’s some big conspiracy here because there isn’t. People aren’t stupid or have some vendetta against Apple. If Apple can be good for an industry then great. But they weren’t good for the publishing industry.

      1. And amazon doesn’t force the Publishers to accept lower pricing by it’s predatory practices to hold 90% of the e-book market? No Publisher can withstand Amazon’s demands for fear of losing market access, resulting in wholesale loss of it’s author’s who now can’t sell any books. And this is better?, for who, certainly not the authors or publishers, the “owners” of the works.

        1. Chaz:

          You are respectively an idiot.

          First, Amazon does not hold 90% of the eBook/book market. There are many players worldwide.

          Second, Amazon doesn’t force anything on anybody. You can list your stuff for sale with them or not.

          Third, Amazon’s agreement is EXTREMELY FAIR AND FAVOURABLE to publishers. They reserve the right to sell your book for less than what you price it at. BUT, Amazon, NOT you, takes the loss. You will always make X% of what YOU set the price at.

          Amazon does not tie you to their store and block you from selling it for less elsewhere and if you do sell elsewhere for less, that they’ll take your titles off of their store. You can do whatever you want with your books and sell them for whatever you want elsewhere.

          With Apple, that wasn’t the case. They chained you to a draconian agreement making it difficult for you to sell for less elsewhere. Apple also colluded with the biggest publishers in New York to lock in higher new release pricing.

          All of the evidence is in plain view and clearly laid out by Eddy Cue and Steve Jobs. They themselves said they needed to raise pricing and they needed all of the publishers to agree and buy in on the pricing scheme.

          This is anti-competitive behaviour.

          Now, we have Oyster and Scribd all you can eat.. and Kobo is doing well, etc. There are new players who likley would never had been able to start and compete because the publishers who have the content would have been effectively blocked from listing their content with them. That Apple would remove their content or drop the price to pennies if you had your content on an all you can eat business model.

          No, there were many problems with Apple’s business practices in the publishing industry. There’s a lot of respectable, smart people in publishing and its one of the few industries that Apple has gotten their way with.

          1. Quoted: “They reserve the right to sell your book for less than what you price it at. BUT, Amazon, NOT you, takes the loss. You will always make X% of what YOU set the price at.”

            So if you sell your book at Amazon and they sell it below their cost, you make money and they lost money on it.

            If another retailer wants to sell the book and cannot price it at a loss, why would they sell it and why would a consumer volunteer to pay more for it?

            If the other retailers cannot carry and sell enough books that Amazon is not selling at a loss, can they stay in business? Result, an Amazon monopoly.

            1. beosjim:

              Reasons why not everyone will buy from Amazon or another place where something is cheaper:

              1. People get invested in a platform like Kobo and stick with it, so they don’t go elsewhere to buy eBooks. Loyalty programs help keep people in one spot;
              2. People may not be aware it’s cheaper elsewhere.

              I’m not discussing paper books. I’m just talking eBooks here.

          2. Dftr: I understand that for Chaz to get a percentage wrong certainly wouldn’t make him an idiot any more than saying Amazon is EXTREMELY FAIR AND FAVOURABLE to publishers.

            A simple Google search would reveal that currently the EU is investigating Amazon for predatory practices…hmmm. Additionally, speaking to many in the law industry as well as reading many excerpts from people who teach concerning monopolies, there is a fine line that was walked. However, this particular case reviewed in entirety would show that, albeit not perfect, certainly would not be considered a conspiracy thus violating any monopoly laws in the current books in the U.S.

            I particularly like your pointing to the evidence of a few emails that spoke of pricing. Wanting to raise prices is not a conspiracy. No where did the emails say they spoke to the publishers, rather to each other…not a conspiracy, just business. The publishers, as they all admitted, where already in talks to raise the prices and break from Amazon. To have a non-lateral entity entire the conversation is not spearheading a conspiracy, it is simply providing an already behind-the-doors conversation a means to express their thoughts in real terms.

            I typically don’t reply to this forum, but your word “idiot” caught my attention. Typically, individuals that know a little, not a firm foundation of the information, resort to “name calling” to offset their own deficiency. Even if every word your wrote is true and correct, you lost the high ground by your lack of respect.

            Healthy debate is an exchange of meaningful expression, not belittling others for their expressions.

          3. With absolutely no respect…
            YOU have several of your facts wrong.
            “All of the evidence is in plain view and clearly laid out by Eddy Cue and Steve Jobs. They themselves said they needed to raise pricing and they needed all of the publishers to agree and buy in on the pricing scheme.”
            The court documents explicitly quote Cue and Jobs as stating “We know you [the publishers] want to raise prices.” There is no evidence that at any time did any Apple representative tell the publishers to raise prices or that Apple tried to force publishers to raise prices. Point us to a specific court document that explicitly shows that Apple told the publishers that Apple required them to raise prices or shut up. Jobs (and Cue) admitting in contract negotiations that they knew the publishers wanted to raise prices was a cornerstone of the DoJ’s case. The false premise by the DoJ that if Apple admitted that the publishers wanted to raise prices inherently meant that Apple pushed them to raise prices is just that: false. It was never proven that Apple wanted to raise prices.

            “If Apple had got their way, all of the publishers would have been hamstrung by Apple’s draconian terms and they were all in Apple’s back pocket colluding together. Those terms specifically barred them from selling less elsewhere under certain conditions.”
            and
            “Third, Amazon’s agreement is EXTREMELY FAIR AND FAVOURABLE to publishers.”
            Oh, are you forgetting that the same terms and conditions (the Best Customer Clause) for which the EU is investigating Amazon for anti trust action? Either do your homework or shut up.

            Plus Apple’s “draconian terms” explicitly stated that the *publishers* got to set the prices of the books, not Apple. And, the Best Customer Clause only came into effect if the *publisher* authorized someone else to sell the book for less. Indeed, if the *publisher* authorized another seller to give the book away for free, then Apple could also give the book away for free and Apple would get nothing — or Apple could keep the book at the original price and *IF* it sold any then both Apple and the publisher profited.

            And just for the record, equating Oyster and Scribd with iBooks or Amazon is like saying Apple Music is the same as iTunes. You can say it, but that does not make it accurate or true.

            Now crawl back under your bridge.

            1. All of you guys are wrong and misunderstand the facts and the law…

              I am in this industry. I know the players and I have a network. I’m in this. We work with large publishers and self-publishers daily and we know the law, the policies, the practices, the sentiments of the various players, etc.

              1. It simply is not the case that this case is about Amazon. This is specifically about Apple and their actions. It does not in any fashion absolve Apple from wrongdoing if another company does wrong. That is just a distraction. Apple is the Defendant, not Amazon. If Amazon has done wrong, people or the DOJ could sue.
              2. In this case, it was found that Amazon did not really lose money on most eBooks. Go read the case materials. It’s specifically covered.
              3. Amazon never had 90% of the eBook market. If you’re talking just in the USA, then it may have been something like in the 70s or low 80s in terms of percentage. Worldwide it’s nowhere close. There’s lots of other book/eBookstores in other countries that dominate those areas. And you are the same people who gloated and bragged when Apple had 70% of the tablet marketshare. Or close to 80% of the MP3 player marketshare and locked people into iTunes with their music not being readily transferred to other devices. You’re a bunch of inconsistent, misguided hypocrites. Amazon has had a strong position in the publishing industry because they earned it. They built a platform and a store and a eReader with WhisperNet and put eBooks and self-publishing on the map. They practically invented self-publishing and have changed the industry for the better. They did this long before Apple or Kobo came around.

              Ready for the rest?

              This came out in the trial and the publishers revealed and stated that Amazon does not, in fact, lose money on the sale of eBooks. As consumers, if you think Amazon is losing money on a sale, all the better because you just think you’re getting a better deal. All Amazon does by selling cheaper is cut into their own margins. Amazon does NOT pay $13.99 for eBook bestsellers and sell them at $9.99. The price Amazon gets these books for is confidential and under the wholesale model.

              There may have been up to 36 instances where Amazon undercut a price on eBooks. The courts, rightfully, stated that this was such a fraction a percent of the total eBooks for sale to be irrelevant. But Amazon selling for low prices or even having loss leaders is also not something that’s illegal.

              The courts were clear in their decision. This case is not about the particulars of an agency model vs. a wholesale model, or an MFN clause itself. This case is not about Amazon. It’s about Apple and the world’s largest publishers. It is about a simple matter: Did Apple collude with industry to inflate eBook prices and eliminate competition. The evidence in the case is quite overwhelming that Apple did in fact do this. Just because the publishers didn’t like companies like Amazon making razor thin margins on their eBooks… and that Amazon had a sizeable chunk of the market in the US… this is not an excuse for them all to collude together, with another company as the ring leader, to stamp out any of this competition and completely inflate and flatline eBook prices.

              “Another company’s alleged violation of antitrust laws is not an excuse for engaging in your own violations of law. Nor is suspicion that that may be occurring a defense to the claims litigated at this trial.

              First, it is no defense to participation in an illegal price fixing conspiracy to suggest that others did it too. Second, focusing on the precise terms of agency agreements and the extent to which they may have been similar is far too narrow a focus. The issue is not whether an entity executed an agency agreement or used an MFN, but whether it conspired to raise prices. Apple has pointed to NO EVIDENCE that either Amazon or Google desired either to eliminate retail price competition or to raise retail prices. Quite the contrary. Amazon was ADAMANT in its support of retail price COMPETITION and lower prices. It did not relinquish its control over retail pricing easily.

              The totality of the evidence leads inextricably to the finding that Apple chose to join forces with the Publisher Defendants to raise e-book prices and equipped them with the means to do so.”

              This came out in the trial: Cue told Cook, in writing, it’s “over for everyone” once Random House signs. Meaning Apple would become a monopoly that they hoped in the eBook industry like they were with MP3 players and music. And that they’d be eliminating competition.

              Cue actually blocked Random Houses iPad Apps to squeeze them into signing on. After they signed on, he attributed this success, in part, to blocking their Apps.

              With Apple around, innovative technologies and business models in this industry would struggle to see the light of day. Because Apple’s contract made it virtually impossible for any publisher to do anything but sell under an agency model everywhere else and locked them into a host of other draconian clauses.

              Amazon simply innovated before Apple and the rest of the guys. Apple came late and tried to break Amazon’s dominance through illegal business practices. Amazon never, ever tried to control publishers on other retail channels. Apple did. And they very far to do it.

              One way to look at it is, you get the most powerful people in a room, one side benefits more than the other… but at the same time they both benefit… and after their meeting is concluded, the industry in which they’re in suffers because the net result is the elimination of competition and the inflation of prices.

              We’re not the most powerful, and we’re not in that room. We’re in the industry and this negatively affects us. With an eBookstore, we too are trying to sign on publishers. The way Apple had it, we COULD NOT, in anyway, realize our innovative business model with publishers because of how much legal crap is involved to dance around Apple’s contract. Did Apple see us coming? No. Did the publishers? No. But they got into bed with Apple and that is the problem: signing with Apple severely limited what these publishers could do with other retailers. This right here is a real live example of how shitty this is in the real world and the crux of the case that the DOJ was going after.

              Amazon never had contracts that limited, to such a large extent, what publishers could do outside their store. Apple “severely punished financially” publishers whose books weren’t being sold under the agency model elsewhere. This is a quote directly from the trial and formed part of the contract. This is the problem in that Apple was effectively forcing the agency model on the industry because they didn’t want to compete with the wholesale model.

              What you’ve said… is what some others have said… but just because one company has a major, dominant position in a market is no excuse to break the law yourself to break that dominance. Amazon earned its placed in the book industry because they innovated first.

              “Quotes from court case: The Plaintiffs have shown through compelling evidence that Apple violated Section 1 of the Sherman Act by conspiring with the Publisher Defendants to eliminate retail price competition and to raise e-book prices. There is overwhelming evidence that the Publisher Defendants joined with each other in a horizontal price-fixing conspiracy. Through that conspiracy, the Publisher Defendants raised the prices of many of their New Releases and NYT Bestsellers above the $9.99 price at which they had previously been sold through Amazon. They also raised the prices of many of their backlist e-books. The Plaintiffs have also shown that Apple was a knowing and active member of that conspiracy. Apple not only willingly joined the conspiracy, but also forcefully facilitated it.

              The Plaintiffs do not argue, and this Court has not found, that the agency model for distribution of content, or any one of the clauses included in the Agreements, or any of the identified negotiation tactics is inherently illegal. Indeed, entirely lawful contracts may include an MFN, price caps, or pricing tiers. Lawful distribution arrangements between suppliers and distributors certainly include agency arrangements. It is also not illegal for a company to adopt a form “click-through” contract, negotiate with all suppliers at the same time, or share certain information with them. Indeed, as Apple indicates, many common business practices have been found necessary for the efficient distribution of goods and services. See Monsanto, 465 U.S. at 763-64. That does not, however, make it lawful for a company to use those business practices to effect an unreasonable restraint of trade. And here, the evidence taken as a whole paints quite a different picture — a
              clear portrait of a conscious commitment to cross a line and engage in illegal behavior with the Publisher Defendants to eliminate retail price competition in order to raise retail prices.

              Apple also argues that it is particularly unfair to find that it engaged in illegal conduct since Amazon and Google, among others, used similar negotiating tactics and included nearly identical terms, including MFNs, when they subsequently executed their own agency agreements with the Publishers. There are several reasons that this is not a persuasive argument.

              First, it is no defense to participation in an illegal price fixing conspiracy to suggest that others did it too. Second, focusing on the precise terms of agency agreements and the extent to which they may have been similar is far too narrow a focus. The issue is not whether an entity executed an agency agreement or used an MFN, but whether it conspired to raise prices. Apple has pointed to no evidence that either Amazon or Google desired either to eliminate retail price competition or to raise retail prices. Quite the contrary. Amazon was adamant in its support of retail price competition and lower prices. It did not relinquish its control over retail pricing easily. As Penguin’s Shanks described at trial, when Penguin demanded that Amazon yield its discretion over retail pricing, Amazon “yelled and screamed and threatened. It was a very unpleasant meeting.”

              For its part, Google had been negotiating wholesale distribution agreements with Publishers and only switched to agency agreements at their insistence. Amazon was so hopeful that the Publisher Defendants would relent and revert to a wholesale model once they saw how much money they were losing with the agency model that it added a “model-parity” clause in its agreements.

              In sum, Apple’s independent business reasons for creating an e-bookstore and for adopting an agency model to do so have not created any ambiguity in the evidentiary record that should require hesitation before finding Apple liable. The totality of the evidence leads inextricably to the finding that Apple chose to join forces with the Publisher Defendants to raise e-book prices and equipped them with the means to do so.

              The agreements also included a price parity provision, or Most-Favored-Nation clause (“MFN”), which not only protected Apple by guaranteeing it could match the lowest retail price listed on any competitor’s e-bookstore, but also imposed a severe financial penalty upon the Publisher Defendants if they did not FORCE Amazon and other retailers similarly to change their business models and cede control over e-book pricing to the Publishers.”

              Now, you have to understand. We have in writing Steve Jobs saying, AFTER they had the publishers going and getting them to sign, he scaled up his pressure and dropped the following bomb: He said Apple wouldn’t enter the eBook market if the industry didn’t move over to agency. He didn’t think they could compete at higher prices with folks like Amazon selling for less.

              The courts uncovered a very solid timeline of events from everyone involved… like a clock. After the publishers signed with Apple, they immediately went to Amazon and gave them the ultimatum. I believe it was HarperCollins who Amazon retaliated against by removing their buy buttons from their books within 24 hours after they gave Amazon the agency model ultimatum.

              Here, you can see why Apple’s labeled the ring leader. They put in these “punishment” clauses to make sure that, after the contract was signed, everyone would play along. Those who tried to “screw” the group by undercutting (selling under say a wholesale model somewhere else), would be punished. It was all or nothing. They all wanted assurances that each publisher would play along or the deal was off. This is how Apple facilitated and lead this illegal operation. All of this came out as hard evidence clear as day in court.

            2. Very articulate. And being in the field I’m sure that you have certain insights. I consider myself to be well read. From my understanding the only true issue is did Apple violate the Sherman Act and incourage a monopoly in the book publishing field? Again I say no. A conspiracy, collusion, can only happen with lateral companies, of which Apple is not. The book companies definitely could be found guilty of conspiracy should they have been tried. I’m a firm believer that the ‘deep pockets’ affect was in acted when the DOJ issued their suit. I’m also a believer that only months prior to the suit Amazon had influencial person to their establishment for a weekend ‘function’ for unspecified talks. Amazon has a lot to lose should Apple win the case. My family did not suffer paying a few extra for books. As Amazon surely didn’t mind the profits as they raised their prices.

              Simply, was Apple’s tactics above board? No more than Amazon’s. Did they violate the Monopoly laws? As we read it seems to be torn as to whether they did or not. I’ll be especially curious how the Supreme Court splits when they get the case. You have a compelling argument but I finally believe that you don’t have all the facts and what facts you have make this a split decision as well.

              Thanks for the meaningful conversation.

            3. Hi Donald:

              Thanks for your comments. The gist is this: Apple set out to ELIMINATE the wholesale model and entrench the agency model industry wide. This would give the power of pricing strictly to the publishers and away from the retailers. Second, it would eliminate competition from other retailers in terms of pricing. What Apple did was, they rounded up the world’s largest publishers, got them in a room, and set it up to have them buy into just the agency model, to force other retailers to adopt that model across the board, and for these publishers to agree on the same pricing of their new releases, etc.

              The result was the elimination of price competition at different retail stores and the fixing of prices and fixing of business models.

              This is anti-competitive and illegal.

              At the time this stuff was happening, we knew companies were working on the Netflix style eBook model, as were we, and other innovative business models. These business models were, at the time, completely threatened by this whole thing because it wouldn’t really have been possible to sign on publishers whose titles were in the iBookstore onto something like an all-you-can-eat model.

              This court case and decision is very good for the publishing industry and excellent for consumers as it opens the door to more choice, more competition, and innovative business models.

            4. I agree with most of what you said. The only exception is that the powers at Apple spearheaded this endeavor. From what I’ve read of the case, listening to legal experts from Columbia, Harvard, Yale, NYU, as well as litiga lawyers I work for who follow the case, there has not been proven, beyond innuendo, that Apple initiated the conversation. Until that is proven, maybe then all judges will come to the same consensus. Maybe.

              Anyway, from personal observation I seeamazon back to their rascally deeds. I see Apple chugging along profitably. And my last comment…I don’t read Ebooks enough to be affected one way or another. 🙂

            5. Hi Donald:

              Actually, if you pull the evidentiary record, there’s lots of evidence that Apple did in fact initiate the collusion and price fixing, etc. Lots of Emails for starters, other documents… and the account of Cue’s 9 day trip to New York and the follow on communications to that along with all of the phone records of every major publisher exec on the phone with each other and Apple during those 9 days.

            6. Again not disagreeing with those facts. The collusion was already in progress. It was happening whether Apple got involved or not. Amazons busy model was, is, too oppressive. And no, not conducive to competition. And yes, the result of the end of brick-and-mortar. (Personal opinion on that last one). Apple is smart. They have a team of smart. Steve Jobs was smarter. I believe, and again there is nothing to sway me otherwise yet, that Apple took advantage of a situation. That’s business, not collusion. Being in the law field for 22 years now, i can tell you that if you don’t have all non-invested parties not agreeing that there was collusion, even after all the evidence was shown, including all that you are looking at, then most likely there wasn’t.

              At the end of the day, the person that unfortunately has the most money and the most to lose will find a way to win. I would like to see justice, I just don’t, in this case, true unbiased justice will be found.

              Thanks again for sticking with the subject. I wish I would have learned something new. Have a good evening.

            7. Donald:

              Have you been privy to Amazon’s wholesale model agreements with the publishers or something? It’s confidential. If not, what is your conclusion that Amazon’s business model was too oppressive? How is the wholesale model oppressive? Specifically how is Amazon’s publisher agreements oppressive at that time? I’m not understanding how anyone could come to that conclusion (I’ve seen the agreements).

              Apple’s way was, in fact, oppressive. It restricted what publishers could do on other retail channels and effectively barred any business model but the agency model.

              Further, the important thing to point out here is that Apple is not the only company found liable here. The other publishers were included as well. Just because others do wrong does not excuse Apple. Apple just chose, unlike the rest, to fight. The others paid their fines effectively admitting guilt.

              This is collusion because a group of industry leaders got together to force one business model and one price on the entire industry. They conspired together to eliminate competition and fix pricing and business models.

              This is not just business, this is an illegal conspiracy and one that’s damaging to consumers.

              At the end of the day, we’ve been through the initial court case, and now the appeal. Apple was found guilty and the charges have been upheld. So the bottom line is, they’re guilty according to the law. They could hit the Supreme Court but having delved into this case alot, my opinion is it would be a waste of time because of how strong a case there is against Apple.

            8. I’m more privy now to their business model than I was. And really, that is my point. How Amazon is doing business now is not how they were, largely in part because this case shed a light on a ‘bully’ like, large kid in the play ground mentality. I’m not blind as to Apple’s dealings. They exhibit similar qualities. But the law on collusion is consist of lateral parties. The publishers are lateral companies. Apple is not. Has no interest in the making and publishing of books. It is a seller. And unlike Amazon only wants to sell. Apple didn’t force publishers to do anything they weren’t already doing or wanted to do.

              You’re in ‘the business’. Is your business doing so poorly that it feels forced to do things it doesn’t want to do? Offering a new way to do business, even applying the pressure to do that business, doesn’t violate the Sherman Act. Again, I’m looking for proof, more understanding than what is being regurgitated over and over. Give me something new. Show me how they violated the law. Don’t tell me how now it’s all good because at one point it wasn’t and it was at that point the publishers colluded and Apple stepped in with a better option than they already had.

            9. Donald you say that Amazon is doing business differently now. How are they doing business in eBooks differently now compared to how they were before?

            10. It would depend on what arm of Amazon you are referring. In reference to eBooks, depending on which publishing company they are signed with, could be wholesale or retail. Because of the brief stint of competition that Apple brought to the table, they may have an amalgamated model, with reference to eBooks. Because I don’t have a contract with Amazon, I can not speak to the exact business model that they would be using with me, as I’m sure each publisher won’t speak of either (legality and all).

              But the debate and the use of terms you use give the impression that you do do business with Amazon, or that you are closely associated. Apple believes they did no wrong. The book publishers thought they could get away with collision. Amazon’s actions, their business model at the time, I believe played a crucial part in the suit that exists. Mr. Coase, Nobel Economist, I thought shed a wonderful light on how Amazon survived the dotcom era and continues to profit today, by taking up different models depending on the business. And whatever model they use, their size and wealth does afford them to bully, coerce, exact vengeance on companies that “don’t play nice.”

              It’s easier to think we are correct in our understanding of this suit, especially when we see something that is personal to us. This subject isn’t personal. I purchase from Amazon and Apple. For me, I do hate injustice and double standards. If I thought that the rubric which the DoJ brought against Apple was applied to everyone else, I would be more content to accept the information I read. But it’s not.

              This is actually the best conversation I have had on this subject. It put a lot of things in perspective, and yet my feelings are not swayed.

              I want justice, but blind justice. Fair justice. Unbiased justice. Unfortunately, in this politically driven, money motivated world, that will never be the case.

            11. Donald:

              I can tell you that we do have agreements with Amazon, Apple, Kobo… my question was rhetorical.

              Amazon’s publishing business is really not much different today than it was when this case got going and was concluded.

              There are different options available to publishers depending on their size, the types of books they sell, volume, etc. This has always been the case.

              You do not understand and realize how damaging it would have been to let Apple and the publishers continue as they did. It would have destroyed any unique business models because it FORCED ONE BUSINESS MODEL on the entire industry.

              Now, you have Oyster and Scribd all you can eat which is one example. This all you can eat business model wouldn’t be as tenable/successful when publishers are locked into an agency model world and price fixing world.

              Prices went up after this collusion.

              Signing content deals with publishers ended up hinging on Apple’s terms.

              You need to realize that their behaviour centralized all the power with Apple and the big publishers and eliminated price competition, inflated prices, and stymied innovative business models. This was not good for the industry and was illegal.

              You cannot have the attitude that it’s not fair that X gets prosecuted when others haven’t been. People skip paying for the bus, jaywalk, speed, evade taxes, etc. The system prosecutes the best it can. Some people get caught. They pay. It also serves as a deterrent.

              If X broke the law, they’re guilty. Apple broke the law. Amazon did nothing wrong. There is no evidence that they did.

              Other companies may have fixed prices in other industries and not been caught or prosecuted. But again, that’s not a reason to excuse others from breaking the law.

              Apple broke the law. They got caught. They got prosecuted. They’re guilty. Life goes on and some get disuaded from doing the same types of things.

            12. “You do not understand and realize how damaging it would have been to let Apple and the publishers continue as they did.” No one does (secondary point). I’m a consumer, I was not hurt by the price hike. Publishers were setting $1-5 increments above Amazon (which Amazon adopted), but the beneficiaries were the artist. Personally, increasing prices should not have been in the suit and the DoJ did not make it’s case that the consumers are hurting from the price increase (press catch-phrase). Consumers were already used to paying for paper (soft and hard) at $15-20+ price point (best sellers and such), so to have an eBook for less that paper, but more than Amazon really is a mute point as to consumer protection.

              As for models: the Agency Model is a model that Apple uses. Apple finds it to be a fair and sustainable model (as do other companies). As stated prior, a company does not have to sign with Apple if the terms are unacceptable (bullied or not). There have been many companies and artist that don’t agree with Apple’s terms, have been vocal about such, and did not sign. “It would have destroyed any unique business models because it FORCED ONE BUSINESS MODEL on the entire industry.” – As you pointed out, there are the “Oyster and Scribd” businesses that did not eat the pie, so to speak. I speak more of this below.

              “You need to realize that their behaviour centralized all the power with Apple” – Apple is a retailer, can make suggestions, but really no power, only negotiation, as to what the prices should be – “and the big publishers” – only, as they were setting the prices whereas Apple was suggesting what it should be to be profitable for all parties – “and eliminated price competition, inflated prices, and stymied innovative business models.” – supposition, as the platform was not given the same duration as Amazon’s existing business structure. “This was not good for the industry and was illegal.” – Again, if it was clear cut on legality, then all parties, lawyers, judges, pundits, experts…me…would all agree on who was acting illegally.

              I’m in arts as well, and I like getting paid for my art. Taylor Swift just had that thought tweeted to 60m people and they agree, artist need to be compensated fairly for their work. Amazon has shown itself not to benefit the artist. Amazon is a business. Apple is a business. Apple was hurting Amazon’s business so I’m sure Amazon, in part, had a say in the suit that followed. I firmly believe that Apple as a business, does, in part, want the contributors to their business to be compensated for their art.

              What would be most curious, as you keep stating, obviously Amazon was not the one on trial. It was the victim (along with consumers). The testimony Amazon given reflected just that. Now that the EU is investigation Amazon for their “business model”, I wonder what facts will come out as to how their model is used to against the consumer, artist, competition and pricing. It will be an interesting reveal.

            13. Donald:

              No Donald. You are mistaken. As has been already discussed, Amazon loses on its dime, not yours, and most of the eBooks they sold they never lost money on. You sell your content to them at a fixed price and they sell for what they want. You know exactly how much money you’re making on each book and it doesn’t change. That’s the wholesale model.

              The agency model is where things get variable because you only get X% of the final price. So if the final price is reduced, your earnings are reduced. In the case of the wholesale model, if the final price is reduced, your earnings are not.

              Also, you are not understanding this and are oversimplifying things. It is NOT the artists going directly and negotiating with Apple about this. It is the publishers who effectively own the content of the artists that are doing this, without any input or agreement from the artists. You need to understand that and why this becomes an even bigger issue as a result.

              You also simply seem to completely not understand what collusion is and centralized power. It’s when key players that are dominant in an industry get together and conspire to do something together. In business, this is typically about manipulating a market, fixing a price, etc. If you had actually read the evidentiary record, you’d see that Apple acted as a ringleader to force Amazon and others to cede pricing control to force the agency model on the industry. As Eddie Cue stated, “It’s over for everyone…”

              This activity and centralized power set to fix prices and force one business model. It eliminates competition as the industry moves to this framework all because of the power that Apple and the world’s largest publishers have.

            14. “Amazon loses on its dime, not yours,” – Amazon is in business to make money. As you stated in another post, Amazon does not sell books at a loss. “and most of the eBooks they sold they never lost money on.” – rightly so, as they have dominated for so long, their projection models are well refined and they don’t accept most books that they believe would not turn a profit. Additionally, if I’m not mistaken, they dictate when books can be released, shipped, promoted, and for how much on-line and off. With that model, of course they don’t lose.

              Collusion, as stated in the Sherman Act, and subsequent amendments, simply put, clearly defines the act of colluding to be among parties of similar product and practice. Apple, as a retailer, could not participate in a collusion with Publishers, as sellers, because, as the Sherman Act states, they are not of similar product or practice. The fact that a price-cap was set for publications by Apple and accepted by Publishers could be considered suspicious. And unfortunately, all that is needed to pursue suit is the allocation and supposition of violation, allowing facts and proofs to come at a later date. Centralized Power would apply as much to Apple as it could be to Amazon. Amazon sets the cap price for books. I would imagine they also set the price of return to the Publishers who would then forward what’s left to the artist. Apple asked for a price cap to make the books competitive but would allow the Publishers to get their cut and the artist to get a larger cut.

              Wholesale model does well with product being sold in mass quantity. It unfortunately doesn’t benefit the product that is not. The consumer may benefit in price but they suffer in variety. History shows that since Amazon began its eBook price setting and paperback distribution, brick-and-mortar companies have been fading. Variety suffers. Publishers who refused to sell their product under Amazon’s model were blacklisted, product being out-of-stock, reviews removed, promotion removed, etc. until the publisher acquiesced, at which case the product was in stock, reviews returned, promotions reinstated, etc.

              What’s interesting is that last statement you made: “This activity and centralized power set to fix prices and force one business model. It eliminates competition as the industry moves to this framework all because of the power that Apple and the world’s largest publishers have.” Replace Apple with Amazon and you have pre-suit and a returning to post-suit situation. Amazon is, without any doubt, a centralized power and they set the prices and force one business model for eBooks, and possibly paperback. It eliminates completion all because the power Amazon and the word’s largest publishers (by means of contractual obligation through/by Amazon) have and will continue to have thanks to this suit.

              So, whereas I am no where an expert, I am well read. But as stated, this is more of a mental exercise than anything. An unfortunately, I still haven’t seen anything else of substance that would help me see the violation of the Sherman Act with regards to Apple. Evidently, Apple doesn’t see it either, nor does the 1 of 3 judges, nor a host of lawyers, readers, experts and the such. The protections set in place are really broad strokes and would need to be refined for me to be more convinced of collusion and price-fixing.

            15. Donald:

              -Amazon does not dictate when books can be released, shipped, promoted, and for how much online and off with the publisher agreements.
              -When it comes to the Sherman Act, etc. you are not a lawyer or a judge. You are oversimplifying this again. A statutory provision is one thing, and your reading of it is not exactly accurate. There are other statutory provisions to consider as well as COMMON LAW.
              -Amazon DOES NOT set the price cap for books. When are you going to understand how this works. Amazon simply buys books from a publisher on a wholesale price under the wholesale model and sells them for whatever they want. It was Apple that set out the price caps because they wanted to control the pricing while at the same time the publisher had the power to price their titles under the agency model. It is this precise thing that is at the heart of price fixing: eliminating the wholesale model and enforcing an agency model where the publisher’s hold all the pricing power and Apple ultimately benefits through the elimination of price competition. Artists get a small percentage of sales or a fixed royalty per sale. Apple, Amazon, etc. have nothing to do with that. They’re just the seller of record when it comes to these publishers and the publishers are the first to receive sales proceeds.
              -Where in the evidentiary record does it cover the Sherman Act with regard to Apple not having a similar product or practice as the publishers?
              -Amazon blacklisting, products being out of stock… first show the data that supports this that it was material. Second, if Amazon did anything illegal, then they may be prosecuted. This does NOT in any fashion excuse illegal behaviour. Apple broke the law and that’s that. Amazon or anyone else breaking the law is not relevant neither material in terms of absolving Apple of wrongdoing. You cannot argue that because X committed a SUPPOSED crime and hasn’t been prosecuted for it then Y can’t be prosecuted. It’s not logical, legal, reasonable, or acceptable. Regardless, nobody has made a case that Amazon did anything illegal.
              -You do not understand centralized power. It is the publishers themselves and Apple that got together to enforce their own price fixing and business model scheme onto the entire industry. Amazon DID NOT enforce one business model – the wholesale model – on the industry. You must read and understand their publisher agreements. And for self-publishers, AMAZON HAD THE AGENCY MODEL BEFORE APPLE ENTERED THE EBOOK SPACE. So you clearly need to stop because you’re just arguing for the sake of arguing. You have effectively no knowledge of this stuff or experience to speak of.

            16. I can see I struck a nerve. Assumptions on what I do or do not do ‘you are not a lawyer or a judge.’.

              Additionally, it takes a good understanding of law to ‘oversimplify’ it.

              Absolutely Amazon caps the prices. That is their schtick: $9.99 books. So whatever they negotiate with Publishers is based on a capped figure that Amazon chooses. And you made my point for me concerning the Wholdesale model, Amazon buys in bulk items that they know will sell in bulk, leaving the little guy ‘the variety’ behind, unnoticed. Case in point ’50 Shades of Grey’.

              Steven Colbert v. Amazon. Google it.

              Again you use the word illegal. There is no definitive thought on that. The more you dig your heals with your belief that Apple is guilty the harder you will be open to other possibilities. Final verdict will tell. The Supreme Court will finally define what collusion is and how it applies to non-lateral parties.

              Maybe stopping is a good thing. You think I’m arguing and it’s the farthest from it. It’s called communication, the exchange of thoughts and ideas. Because someone doesn’t agree with you doesn’t make them idiots or uneducated or simpletons or non-professionals or argumentative. It’s obvious you favor Amazon. Good for you. Your convictions are strong. But you know what they say about a full cup? Take care. I do apologize if I upset you.

            17. The agency basis does NOT eliminate competition. But it does put the pricing decision in the hands of the publishers …rather than a middleman wholesaler.

              Amazon is playing the “predatory pricer” card. And they can only sell below the price they pay for publishers’ titles because Amazon believes they can make more money by selling Kindle e-readers and by directly competing with their “Amazon publications” business aspirations.

            18. Unfortunately the way it was implemented resulted in all formats of the same ebook to be priced identically or the lowest price matched by the iBook version. I doubt Publishers would even consider pricing HC, Trade, PB, and pulp paper versions of the same book identically.

            19. I recall reading Apple initially had a wholesale model in mind when they first met with publishers. All Apple had to do was stand its ground and none of this would blown up in Apple’s face.

          4. I am an Economist. . . and do know what I am talking about. In 2010, when Apple entered the e-book market, Amazon did indeed have 90% of the e-book market. So you are the liar here. The problem was not that Amazon was eating the loss, it was that no other competitor could enter the e-book retail market without also having to eat that loss merely to compete with Amazon’s pricing, and no other competitor could afford to eat those losses. . . not even the publishers themselves. Amazon’s e-book prices were also cannibalizing the publisher’s dead-tree book sales because they were vastly undercutting the retail pricing of regular books. Amazon was pricing the A-list and best-sellers below the wholesale cost of the e-book by several dollars and claiming they were making a profit on sales or other e-books, which could not be true, because the other e-books were also being drastically cut-rate below market prices and were not being sold in the vast numbers that would support the discounts Amazon was making to sell the A-list and best sellers. In fact Amazon was NOT posting profits at all. Amazon had the ability to do that but no entry retailer could do it. . . except Apple. That is called predatory pricing. Amazon had already pretty much bankrupted the brick-and-mortar book stores by doing similar low-ball pricing of their bread-and-butter A-list and best seller books that those stores depended on to support their locations.

            The justice department went after Apple, the new entry in the e-book market, and ignored Amazon, the true monopolist price fixer. That IS insane. . . ignoring the Supreme Court’s guidelines established in previous cases showing that merely because consumer prices went up is NOT proof of price fixing. Apple never OWNED the books being sold nor did they set the prices. The publishers owned the e-books being sold and they were the ones setting the prices. It is absurd to convict Apple of price fixing. . . they were merely the agent offering the e-books for sale on behalf of the publishers who established the pricing, not Apple.

            1. I agree that Apple never OWNED the books being sold however I would have to disagree with you about Apple not setting prices. Apple clearly did not want books priced above a certain point and set specific price points from which the Publishers were to choose for each ebook. The MFN in my opinion created a situation where ebook formats that did not have unique features could not compete with the same ebook in formats that did.

            2. Setting a range of price points is not price fixing. . . and has been established as legal. The book sellers were free to set their own prices in those ranges or not. The court even said so. Sorry, that was not what this case hinged on at all. Manufacturers are free to set the prices their products can be sold for in the channels they contract with. Apple’s been doing it for years. Perfectly legal. That’s contract law.

            3. Apple specifically set a ceiling that the publishers were not allowed to price above and the price points were rather specific allowing no intermediate prices in the range (excepting any case where the ebook is matching a lower price elsewhere, though unlikely to happen since at the time the publishers practically had everyone on Agency pricing). The result of the agency model eliminated price competition among end-user facing retailers and between the various ebook formats giving advantage to those formats that supported ‘enhanced’ features (e.g. read-aloud, multimedia support, etc.)

            4. Still not illegal nor price fixing. Ceiling pricing is not price fixing. It is just the price at which a retailer is willing to sell a product. NOT price fixing. Prices can be anything in the range up to that price. Sorry, not illegal.

            5. Swordmaker, the fanboy pretend economist:

              Swordmaker:

              You are wrong and deny facts.

              “First of all, that was NOT after the publishers had signed. It was before. . . your timeline is screwed up completely.”

              You are WRONG. What I wrote is correct.

              You claim that Amazon has predatory pricing and that they lost money on eBooks implying they lost money on the A-list and best-seller eBooks across the board making this up on other eBooks.

              You clearly have not read the corpus of materials about this case or you wouldn’t be making such broadsweeping and incorrect conclusions. For starters, there IS EVIDENCE THAT AMAZON DID NOT LOSE MONEY IN THE WAY YOU HAVE CONCLUDED. There’s viva voce evidence from publishers stating that Amazon didn’t lost money on most of their eBooks. Right, go run and look up viva voce evidence. Do everyone a favour and stick to being a fanboy and not a pretend lawyer or judge. It’s embarassing.

              The fact that you call Amazon’s pricing predatory clearly shows that you don’t know what the fuck you’re talking about.

              Amazon used the wholesale model. I am willing to bet $1000 that you’ve never actually read Amazon’s publisher agreements. There is nothing predatory about it anymore than any other retailer buying wholesale and selling at a profit or breakeven or loss.

              The courts documents show that there were 36 instances of losses on eBooks, a fraction of eBook sales.

              In sworn statements, Amazon officials claimed the company’s $9.99 pricing was both sustainable and profitable. Most of the new releases Amazon sold at $9.99 were at break-even margins, [Amazon VP of Kindle Content David] Naggar testified.

              “One of the great things about attractive pricing on frontlist titles is that it often prompts customers to make immediate purchases from the backlist,” Naggar explained in his direct testimony. “You’re lying in bed, and it is 11 o’clock, and you’ve just finished a book that you loved and you’re not ready to go to sleep, you want to read some more. Given that you’re holding a bookstore in your hand with a Kindle, you’re likely to buy another book by that author, which generally means a backlist title, where the deep discounting was not in effect.”
              And those titles, he stressed, represented nothing more than “a classic loss-leading strategy” common to the book business—including with print books.

              Of the titles that Amazon had discounted, they simply serve as loss leaders, just like what other retailers do to get people in the store to buy other things. This is therefore not designed to drive competitors out of business but to get people buying more on their store.

              What Amazon does in this case is serves as a tool for Apple in their defence to try and distract away from their own actions and make them a scapegoat. But Amazon is not responsible for the illegal activity that Apple and the publishers engaged in.

              Apple and the publishers are guilty. Apple was found guilty in court and now on appeal.

              MAKING FINDINGS AND CONCLUSIONS BASED ON NO FACTS AND NO EVIDENCE IS AN ERROR IN LAW AS IS IRRATIONAL.

              You have no facts and no evidence to support your conclusions. NONE.

              Finally, Judge Cote addressed the predatory pricing:

              Second, the Complaint asserts that Amazon’s e-books business was “consistently profitable.” Moreover, to hold a competitor liable for predatory pricing under the Sherman Act, one must prove more than simply pricing “below an appropriate measure of . . . costs.” Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 222 (1993). There must also be a “dangerous probability” that the alleged predator will“recoup[] its investment in below-cost prices” in the future. Id. at 224. None of the comments demonstrate that either condition for predatory pricing by Amazon existed or will likely exist. Indeed, while the comments complain that Amazon’s $9.99 price for newly-released and bestselling e-books was“predatory,” none of them attempts to show that Amazon’s e-book prices as a whole were below its marginal costs. See Ne. Tel.Co. v. Am. Tel. & Tel. Co., 651 F.2d 76, 88 (2d Cir. 1981) (“[P]rices below reasonably anticipated marginal cost will be presumed predatory.”).

              When it comes to you stating that Amazon posted losses for their entire business, it makes me realize that there’s a good chance you’re an unemployed fanboy that knows nothing about economics.

            6. You start out with an insult, an ad hominem attack without knowing a thing about me. I am indeed an Economist, I have also been a CEO. I’ve been in the position of making these kinds of decisions. You are not. But you start out insulting everyone who disagrees with you. That is the sign of someone bereft of a cogent argument or valid facts. Ergo, I am done with you on this thread. Trying to overwhelm everyone with bullshit is getting you now where.

      2. Dftr,

        I totally disagree with you.

        You say you have 5 years experience in the ebooks field? Big deal. It means you barely know the industry. It does not make you an expert, by any means. Aside from your meager industry experience, what are your credentials? Lawyer? Economist? Advanced degree of any kind?

        You ask: “Has anyone read even 1 page of court documents?” Well, yes. More importantly, some of us understand the issue.

        “Collusion” is a highly value-laden word. It is used by those who believe Apple talked with publishers specifically to engage in anti-trust behavior. Otherwise, you would not use the word “collude” or “collusion”; you would say Apple *talked* with publishers about breaking Amazon’s predatory hold on the emerging ebook industry. Using the word ‘collusion’ does not make it so. Everyone agrees Apple and the publishers talked. This is not illegal.

        You say “If Apple had got their way, all of the publishers would have been hamstrung by Apple’s draconian terms and they were all in Apple’s back pocket colluding together.” WRONG: Apple’s position was simple. Apple pointed out the publishers could sell ebooks on the agency basis, in which publishers chose the ultimate retail price of their ebooks (and would earn a selling commission), or publishers could sell ebooks on the “wholesaler basis”, which means publishers sold titles outright to Amazon, who could then do whatever they wanted with the titles, even sell them below the publishers’ cost …which Amazon did for the publishers newest and best-selling titles.

        So Apple essentially told the publishers that they could sell their titles as ebooks while retaining control of the retail selling price …by selling the ebooks on the agency basis. But if the publishers did that, the publishers would have to stop selling ebooks to Amazon on the wholesaler basis.

        The publishing industry is NOT better off selling their ebooks to Amazon on the wholesaler basis. The publishing industry is better off selling ebooks through agents, but retaining control of the retail prices of those ebook sales. As it is now, Amazon can undercut the publishers’ newest and best-selling titles — these are the books that are basically responsible for ALL the publishing industry’s profits — by selling ebooks at “loss sale” prices. Amazon is interested in doing this BECAUSE they can make money selling their Kindle ebook readers and because Amazon aspires to dis-intermediate the established publishing industry through their Amazon book-publishing business. Amazon is totally engaged in predatory pricing …which is totally illegal.

        It certainly appears to me that there is a conspiracy against Apple on this issue. But you are absolutely right that this case is not about Amazon. This is a “Catch-22”. Apple, or the publishers, or a class-action suit of consumers, should sue Amazon for predatory pricing. This is necessary to focus the legal system on Amazon’s illegal behavior.

  1. The US DoJ is doing everything they can to damage Apple.

    This is what happens when the owner of the true ebook monopoly owns the CIA-connected Washington Post and is a regular attendee of Bilderberg.

    1. DOJ is doing nothing of the kind. In the greater world, law covers more than Apple. Unfortunately, it would take a push all the way to the Supreme Court to decide this case law. Looks like Apple is just going to pay up. Case closed.

    1. The lawyers weren’t competing, so it’s not accurate to say that they won. When you get your car repaired do the mechanics “win”? When you shop for groceries, does the supermarket “win”?

        1. This is way to annoying and complicated, for my little brain. I am not going to worry about it too much. It just sucks that “not fair” is an equal opportunity affliction.

          BEATS 1 = Awesome!

  2. This is a game to strip Apple of money, by hook or by crook.

    Simply, Apple doesn’t want to pay taxes or grease pockets, then the system will invent something to surgically remove money from Apple.

    This is the cost of doing business, right or wrong.

  3. This wasn’t a trial against Amazon and their predatory practices. It was against Apple, and when court exercises tunnel vision and looks narrowly (extremely narrowly) at the results of Apple’s action, it sees the prices for consumers going up.

    This is unfortunate. There really needs to be a lawsuit against Amazon for the predatory nature of their publishing business.

    1. Correct. There isn’t a law against a monopoly but their is for abusing the monopoly.
      This suck but unless the publishers finally say, “screw you” to Amazon and sell their own products I don’t see anything changing.
      Over in Europe, well that’s a completely different story and they will find Amazon guilty because they have different laws.

      1. What “monopoly”? Apple was not even a player when the events the Justice Department claim occurred took place. Amazon was practicing predatory price to keep competition out of the market by cutting prices on the most lucrative portion of the e-books, the A-list and best-sellers. No one could enter the e-book market and hope to make a profit without selling those books at a profit, yet Amazon was offering those books to the public at $6 below wholesale. No new entry entity can hope to make a profit shipping $6 out the door on every sale and try to make it up in by selling low margin B-list and lower e-books in volume. Even Amazon was not capable of doing that and was subsidizing its below market price cutting with sales of other products that an e-book seller just doesn’t sell. Amazon’s business plan was to never post a profit anyway. . . No one else seems to work that way.

            1. Apple has a monopoly on the iBook ebook market. No one forcing Apple to make iBook readers for any other platforms.. What resulted from all this was the forcing of a single price for any particular title regardless of the format of the ebook.. Sort of like pricing Hardcovers, Trade paperback, pocketbooks, and pulp paper versions of the same book identically.

            2. And Ford has a Monopoly on Ford Automobiles. . . and Ford and Apple have a right to that monopoly. But you are wrong to say that Apple has a monopoly on ebooks in the iBook store as every publisher can sell books in the iBook store and you can load PDF published books into iBooks. You can also convert books published in other formats into the iBooks format. Therefore, you are wrong. One cannot have an illegal monopoly on one’s own products.

            3. I believe I said Apple had a monopoly on the iBook (formatted) ebook market. I never said they had a monopoly on placing books on the ebooks in the iBook store.. Do you mean to say you believe Amazon has a monopoly on ebooks such that NO publisher can sell books there? You mention conversion. I understand you can convert ebooks from one format to another but you tend to lose all the ‘extra’ features of a more full-featured format (iBook, AZW, kepub).. Or do you know of converters that allow you to keep all those features so if someone should covert it back to the original format you regain those features? My point was not that monopolies were bad. Just that you shouldn’t be affecting all other ebooks’ pricing in other formats to price your own. Apple’s MFN forced that to happen.

  4. So… Apple is guilty over the very same practices that the EU is investigating Amazon about over in Europe?

    No wonder the statue of Justice depicts her as a blind lady!

    1. The biggest difference is that Apple’s contract with publishers required PRICES to be matched. Amazon’s contract (at least in the EU) with publishers required Amazon to be INFORMED of any sales to other channels at a lower price. Though it is possible that the information may be used in a future price negotiation, there is nothing forcing the publisher to change prices immediately as in Apple’s case..

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