back to article US Justice Department threatens Apple and publishers with court battle

The US Justice Department has warned Apple and five big publishing houses that they may be seeing the inside of a courtroom for allegedly inflating the prices of ebooks if they can't settle the issue between themselves. People familiar with the matter went whispering to the Wall Street Journal saying that some of the parties …

COMMENTS

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Anonymous Coward

And they wonder

...why the public do not feel guilty when they pirate material.

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Holding the line

There are some publihser out there that are working har to hold the line - Baen, and their subsidiary imprints like Nightshade Books, are quite reasonable, as opposed to some of the money-gougers out there.

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WTF?

Someone is inflating the prices of ebooks

and they've only just noticed!

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Anonymous Coward

Why..

..would the publishers not be happy for Amazon to sell at a loss? The publisher gets the same price regardless of what the retailer does (according to the article) - they shouldn't even care if Amazon gave the stuff away for free, as they would have been paid.

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Re: Why..

Because that would be in violation of their agreement with Apple. As they want their books to be available on Apple devices, they need to keep Apple happy, and Apple don't want anyone to be allowed to charge less than they do.

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Anonymous Coward

Re: Why..

I mean BEFORE Apple came along...

"When Amazon first came on the scene, it was selling new books at a tiny profit margin over the publisher's price or even at a loss to get folks interested in its Kindle readers – which the publishers weren't happy about at all.

Then Apple..."

This implies the publishers were not happy with Amazon prior to any Apple agreement - so my original question still holds.

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Anonymous Coward

@Dr. Mouse

I don't think that answers the question.

If the publishers were happy with the way Amazon was doing things then they would have told Apple to take a walk or accept their terms. Apple didn't even have a book platform so publishers would lose nothing.

I'd say that publishers did have something to gain from the new scheme.

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Re: Why..

Because they like the control of the agency model. It doesn't "devalue" their product more than the publisher is happy with, and they get a bigger cut of the shelf price.

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Thumb Up

High time

Apple's policy of committing publishers and developers to not offer lower prices on non Apple services came under scrutiny.

Not least because I said that should happen not long ago and now I look all prescient and can activate [Smug Mode] :)

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Anonymous Coward

Re: High time

That would be the policy that doesn't exist, would it?

They planned on introducing that policy for subscriptions only last year, but then dumped it about four months later when it became clear that publishers were just going to remove their wares from the store.

Maybe instead of being prescient you should just read the news.

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Flame

Before Ibooks

Amazon was trying to force new ebooks to be around $10. It was working until Apple stepped in and went to the publishers, now do this as you can gouge more.

Nice work all are dodgy and the Author is the one getting screwed the most with less royalties. Apple wanting 30% is a joke for starters.

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Anonymous Coward

Re: Before Ibooks

> Apple wanting 30% is a joke for starters.

Yet Amazon was demanding 70% on the previous agreement.

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Re: Before Ibooks

@ Alistair, if you think Apple is greedy with 30%, perhaps you should ask your local bookshop how much they're paying their wholesaler for their stock. I think you'll find that they routinely double the price.

30% of shelf price is *cheap*.

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Re: Before Ibooks

Also @ Alistair... If a author isnt happy with the royalties he's getting, he can publish himself now, and get 70% of the shelf price.

Try doing that in paper (and being as wideley distributed).

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Anonymous Coward

checklist

Preventing competitors from competing on price: Check

Causing overall prices to go up: Check

O, and what IS the cost of an ebook anyway? User is basically fronting 80% of the cost of "printing" the book, so that part is pretty much elliminated. Distribution cost is, per book, pretty much nill. Still leaves editing and paying the author, but that should still leave them at least marginally cheaper then regular books.

I see little reason for them to cost the same as a regular book, unless the autor is getting a bigger cut. Somehow, I doubt it.

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Flame

Re: checklist

actually according to a write up on baen the phyisical part takes less then the other work (proof reading, etc...).

Pardon me if I take the word of author working for a publisher that quite happy punts DRM free ebooks and also give some books away for free with the authors agreement over some numbnuts posting anonymously on a comments thread.

The write ups on teh baen free libary are pretty intresting TBH.

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Apple stifles innovation and competition

Definite collusion on industry price fixing by Apple. Apple does not like competition because they can't rake in their exorbitant profit with it. Same thing with the App Store for smartphone/tablet applications - Apple charges a huge 30% fee to the app makers for each sale.

Let the United States and others remain free to have price competition.

Let the United States and others remain free to innovate - another Apple problem is that they have the big bucks to race to patent every obvious, prior-art, or overly general idea and then use the patents to try and block competeting products. It ties up competitors in court temporarily (at least in the courts that immediately side with a patent holder and make the non-holder prove Apple is wrong).

Overall, Apple should be the target of the largest anti-trust lawsuits in history.

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Re: Apple stifles innovation and competition

Except of course, Apple doesnt actually set the price. The publisher does.

Hence, how can they be price fixing, when they never fix the price?

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Alert

Re: Apple stifles innovation and competition

I guess you need some basic education on the subject.

Price fixing: Establishing the price of a product or service, rather than allowing it to be determined naturally through free-market forces.

Apple insisted that publishers not allow their books to be sold by other sellers at a price lower than what Apple sells the e-book for on their e-store. It was signed into contract. Apple established a price point at their retail selling level forcing any other publisher agreements to not allow others to sell at lower prices based on free-market forces.

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GBE

Apple in the line of fire, not in the firing line

> Apple is in the firing line along with the publishing houses Simon &

> Schuster, Hachette Book Group, Penguin Group, Macmillan and Harper

> Collins, none of whom felt like chatting to the WSJ.

The "firing line" is the place where the people holding the guns and

doing the shooting stand. I think the author meant the Apple was in

the "line of fire", which refers the paths followed by the bullets.

Being in the firing line is a _good_ thing (compared to being in the

line of fire).

[Where do I queue to pick up my pedant points?]

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@Chad H

How can Apple be price fixing?

Easy, they say that a supplier can not allow the product to be sold else where more cheaply And that they want 30%.

So if another supplier is happy to live with 1% margin, the consumer can't benefit from that.

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