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back to article DoJ could start Apple ebook price-fixing lawsuit this week

The US Department of Justice is getting ready to launch a lawsuit against Apple over alleged ebook price-fixing, according to whispering sources. Those familiar with the matter told Reuters that the DOJ could sue Apple as early as today, since it wouldn't or couldn't sort out a settlement with the department so far, but no final …

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Can't come too soon.

Price fixing by the publishers is inexcusable, and I hope the judge throws the (e)book at them.

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Anonymous Coward

Re: Can't come too soon.

Yet that's what publishers do in several European countries, ie Germany. Can't see how the EC will judge that illegal.

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Anonymous Coward

10% of Apple's worldwide turnover? That'd solve the European debt crisis in one fell swoop... and Apple just so happen to have a mahoosive pot of money stashed offshore waiting for a tax holiday to bring it home. Perhaps the EU should lighten their burden a little... :)

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jai
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I think it would be 10% of Apple's turnover from the eBook market, not from their entire profit. I seem to remember that wasn't a very large part of their quarterly earnings report.

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Anonymous Coward

Wrong

It is 10% of worldwide turnover.

Apple are fucked and it serves them right. Agency pricing model was just one step too far in terms of arrogance.

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Anonymous Coward

Proof

In various other recent price fixing cases, normally a participant goes to the authorities with proof in order to get less severe penalties imposed.

The EU / USA will have to show there was indeed collusion. I doubt there was collusion but do think that Apple's pricing was not granular enough - i.e. there should be more price points available to publishers... otherwise it looks like price fixing.

10% of turnover - not one case has had that penalty imposed, it would be disproportionate in this case even if there was evidence of price fixing.

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Re: Proof

" I doubt there was collusion..."

And I suppose we still believe in the Tooth Fairy as well?

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Anonymous Coward

Re: Proof

Apple have been given the chance by both the US and EU to come to an agreement.

It would appear that in the US at least they have chosen not to do so. As such punitive damages are likely.

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When you try to buy an ebook from Kobo during one of their "special" offers you usually find this text somewhere in the email.

" ... off any eBook purchase excluding those from the following publishers: In the UK - Hachette Book Group, HarperCollins, Penguin, Random House, Simon & Schuster, Wiley, and Zondervan, and all respective subsidiary imprints. In the US - Hachette Book Group, HarperCollins, Macmillan, Penguin, Random House, Simon & Schuster, Wiley, and Zondervan, and all respective subsidiary imprints. In CA - Hachette Book Group, HarperCollins, Macmillan, Penguin, Random House, Simon & Schuster, Wiley, and Zondervan, and all respective subsidiary imprints. In NZ - Hachette Book Group, and Wiley, and all respective subsidiary imprints. In AU - Hachette Book Group, HarperCollins, Macmillan Australia, Penguin Australia, Simon & Schuster, Wiley, and Zondervan, and all respective subsidiary imprints."

A list of familiar names.

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Just one more lame attempt at intimidation by the DoJ

They have a huge burden of proof to meet to prove collusion and therefore illegal behavior. If I were Apple I'd laugh in their faces too.

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Apple had not responded to a request for comment at the time of publication.

Well, you know, keep trying...! ;)

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Good it is about time the greedy barstuards

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Megaphone

a cosy arrangement

I remember back in 08 when i used to work for one of the large publishers, the absolute confusion as what to do with ebook pricing, when the sony eReader came along.

Should they reflect the hardback or the paperback price was the question... As ever the bean counters were so terrified about protecting revenue and undercutting their existing products as they saw it.. they opted for the HB price, and in one stroke killed the publishers credibility.

This is why ebooks were priced at the same value as their hardback versions i.e 20 quid for a great tome= your azw or epub.

It's all about protecting profits and keeping the cosy publisher vs author relationship in check.

I'm certain the other big publishers followed suit, hardly a co-incidence they all adopted the same pricing strategy!

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10% of an Apple Turnover

Sounds tasty but wouldn't keep me going for long.

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(Written by Reg staff) Silver badge

Observations

"barstuards"

"co-incidence"

Why are the comments most hostile to authors always the most illiterate?

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Happy

Re: Observations

"Why are the comments most hostile to authors always the most illiterate?"

Given "illiterate" means "an absence of literacy" surely you can't have a "most illiterate" as that would be the greatest amount of the absence of something?

Should be "least literate"

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Re: Observations

Aren't those comments hostile to publishers (and Apple) rather than authors?

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WTF?

Re: Observations

Authors? What are you talking about mate... I buy a lot of ebooks (4-5 a month on average) mostly from Bean and Amazon... I love supporting authors... if I didn't I'd just pirate them...

What I don't support is middle-men taking the greatest cut, just like in the music industry.

eBooks are going to destroy the publishing industry, and not a moment too soon, let the authors get 50-70% of the sale price, rather then the 1-2% they get from the deadtree version, unless they are "mega name" author that has the clout to get a bigger cut.

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jai
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"Under the wholesale model, Amazon was selling ebooks at knockdown prices, sometimes not even at a profit, in order to entice customers to buy its Kindle ereaders."

Why didn't this warrant an anti-trust investigation as well? Surely this is blatant misuse of their, then, monopoly on the online book market?

I'm not saying it's the same as the alleged price-fixing, but surely it's much the same as forcing Internet Explorer to be present on all installations of Windows isn't it?

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Anonymous Coward

No

You have the choice to buy from Amazon or not.

Amazon are not (illegally) engaged in price fixing - Apple patently are due to their insistence that you cannot sell cheaper than the "app store" and that Apple take 30% of purchase price.

Nice try though - made it a bit obvious you're a fanboi when you tried to drag MS into this argument.

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Re: No

Insisting the item is not sold cheaper or a 30% cut doesn't fix the price at all. Nor does anyone have to sell through apple. You can get kindle app on the iphone / ipad or sell it your own way.

And yes what amazon did was anti competitive. It's the same shit tesco and wal-mart do. They sell eveything so can pick and choose things to sell at a loss making impossible for independants and small shops to compete. Obviously you're an apple hater and anything you think that screws them over is acceptable but apple is irrelevant. It's all the small time people that get fucked over by amazon's tactics that people should consider.

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Because they were still paying the same amount to the publisher.

Publisher say RRP is £9.99 you pay us 40%

Amazon sell at £4.49 make 50p profit and pass the rest to the publisher. Everyone has the same costs to sell.

So Apple could do the same if they wanted.

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So the publisher shouldn't set the price? Isn't that pretty much how all ebooks and apps are sold?

The only questionable thing apple has done is insisting on publishers not selling cheaper elsewhere. That doesn't force anyone to fix the price. If it did then it just implies publishers want to rip off apple customers.

I think this is a non- issue. So publishers keep high prices. Do they think that'll change if they sell at wholesale? All they need to do set a high wholesale price. No one is going to sell everything at a loss so it will fuck over small guys who can't deal with razor thin margins and companies like amazon will sell at thin margins or a loss.

Soon we'll just have the choice real world shopping just in tesco or online shopping at tesco or amazon.

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No it wasn't how they were sold. Publishers set a recommended price and companies like Amazon could turn around and see at whatever price they wanted.

The new model pushed by apple (the agency model) means that for those books, Amazon cannot discount them, and must sell that at whatever price the publisher decides. So that 20 year old Stephen King ebook is still £4.99.

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@toadwarrior

I think you are missing rather important point that ebooks are not apps and the crucial difference is that there are more venues to sell ebooks than Apple.

It is not about the wholesale price publishers sell to shops such as Apple or Amazon, it is about Apple requesting and publishers agreeing minimum price for final user.

If vendors were able to set and enforce final user price and then agree minimum price level, that is fixing the market. And publishers just did that. They did that on Apple insistence because it did not want to compete with Amazon.

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Anonymous Coward

Wholesale vs Price Fixing

As some of you clearly have no idea wtf you are talking about ...... :-)

Amazon basically say (or did prior to agency model) to publishers (figures are examples) :

"We will commit to buying 100 million of your books in the next year. For that commitment we want 20% discount on A-list titles, 40% discount on B-list etc etc"

Apple say :

"Sell via us and you must commit to selling no cheaper through any outlet. In addition we will take 30% of the retail price"

Now if you can't see the difference between that I despair of you all and you deserve to be ripped off.....

Nobody is claiming Amazon are "good guys", however Apple have lost the plot.

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Go

Re: Wholesale vs Price Fixing

One correction:

Apple say, "Sell via us, and you can set any price you like, as long as we get 30% and you sell no cheaper through any other outlet."

Publishers respond, "So, we can set our price at whatever we like, and we can use our deal with Apple as an excuse not to lower it for anyone? Done!"

Amazon: "Hey, what happened to our volume discount?"

Publishers: "You know, it's a real bummer, but we signed this deal with Apple, so we can't offer you lower prices anymore."

Amazon: "That's really going to cut into our sales of both ebooks and ebook readers."

Publishers: "Suck it, Amazon. Suck it long and suck it hard."

Ironically, if the publishers had just negotiated harder with Amazon in the first place, they wouldn't be in this situation.

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Pint

Greed

This is all just greed. Publishers want more money. Apple gave them a way and an excuse to do so. Win-Win for them lot. A total loss for end users. It isn't like the Apple store books became cheaper or something. Apple can happily do the same, but want nice fat margins.

If someone want to compete on price they should be free to do so (Tesco). If someone wants to compete on value addition, they should be free to do so (Independents). The end user gets to choose.

If a seller cannot discount the price when it can be done, and without subsidy, it is price fixing. The price is fixed and above cost price!

As an end user, I have actually seen the prices rise after this. There was no real reason for this, just a legal document.

DOJ FTW!

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