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back to article Ebook price-fix trial showdown? Bring it on, say Apple and pals

Apple wants to go to trial in the US over allegations of price-fixing in the ebook market, the company's lawyer said yesterday, but it may end up settling with the EU. The fruity firm and fellow defendants Penguin and Macmillan were in court yesterday for the first hearing in the US government-led case against them. According to …

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Have Apple ever commented on an article for el reg?

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Anonymous Coward

No!

Slackle are too far up thier own ass!

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Big Brother

What I don't get...

is this whole "settling without addmission of guilt or negligence."

Isn't that like saying "I know there's a bar of chocolate missing, I'll pay the "fine" for a bar of chocolate, but I'm not saying I nicked it."

And surely if 3 sides settle, Apple can't really turn around and say "Nooo... THEY might think it was, but it wasn't really, gov."

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WTF?

Re: What I don't get...

And even better, then settle in Europe for the same thing...

To EU: "Yeah, my bad. You got us, here's pocket-change so you don't nail us for 10% of global turnover..."

To US: "No, nothing to see here. Move on, move on..."

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Re: What I don't get...

Then you've never discussed a lawsuit issue with the lawyer. In your Hershey's bar example it would go something like this:

You've been accused of stealing a candy bar. If it goes to trial and you get convicted, you'll be fined 5X, plus have court costs and lawyers fees of 20X. If you go to trial and aren't convicted, you'll have lawyers fees and court costs of 20X. Or we can settle out of court for X with no admission of guilt and no criminal record.

I'll give you a hint: most sane people recognize they've been bent over a barrel and pay X. Which seems to be what the other 3 have done, and is why their "settlements" shouldn't be held against those going to trial. Apple on the other hand seem to have calculated that A) They have a bazillion dollars on hand anyway so 20X isn't an issue, and B) Settling might cause more than 20X damage to their reputation.

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Re: settle in Europe for the same thing

Again, that would be because unlike me, you haven't been sitting in the room when a lawyer discussed the issue. EU rules are seriously fucked if you aren't an EU member.

Something that was easy to protect in the US, we have little chance of protecting in the EU even though we've got some evidence of bad faith on the part of the EU offender. Yeah, it's an IP thing, but a trademark issue, not patent or copyright. We clearly pre-date them, they clearly filed for protection after getting notice from someone about us, but because they filed before we did we haven't got a snowballs chance of winning. And the lawyers explained that to us so we wouldn't waste money trying to win.

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Joke

Lock 'em up and throw away the key!

That's what I say. Robbin' bastards!

"It weren't me guv - it were me alter-ego..."

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The agency model..

"The agency model is the one that offers consumers the prospect of an open and competitive market for e-books," [John Makinson, chairman and CEO of Penguin] said.

That's an interesting statement... are we meant to infer that all the other models are either not 'open', not competitive or both ?

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Re: The agency model..

Well the agency model is a bit more open in that we know from basic Maths how much the publisher gets and how much the store gets; in the retail model we don't... We dont know which stores are being greedy through higher markups or which publishers are being greedy with different wholesale rates.

This contributes to those who don't know better getting upset that Apple et al "steal" 30% of the purchase price whilst remaining ignorant of how much of the retail price others in the regular retail model "steal".

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Re: The agency model..

"Well the agency model is a bit more open in that we know from basic Maths how much the publisher gets and how much the store gets"

That's true - the publisher sets the retail price and the retailer cannot set a different price. With the wholesale model we know the publisher's intended retail price with the RRP, but not the wholesale price.

I am, however, completely mystified how this makes it competitive - especially given the most favoured nation clause in the contracts which effectively ensures that a competitor cannot under-cut the iBookstore price without the publisher making up the difference (Apple's - or anyone else with a similar contract - cut will be the same regardless).

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Anonymous Coward

Exactley!

the reality is Slackle and Penguin would burn their grannies to save on the heating bill (i.e. money grabbing liars)

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Re: cannot under-cut the iBookstore price

No, the way I read the contract details, IF a bAIn sells the ebook to Amazon for -35% off retail, Apple gets the 35% off retail too, the underlying reasoning being: if bAIn is not using some of the money they made from Apple to subsidize Amazon, they can afford to cut the same deal to Amazon. Now if Amazon sets up a reward program that gives buyers 5% back on their purchases that's legal and gets the buyer more buying power.

In short, the MFC is a rational legal protection, especially for big buyers who tend to be working on smaller margins (relatively speaking) than small buyers who tend to have larger ones.

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Anonymous Coward

A responsible company does not choose a path of litigation

With US Government agencies.

Without carefully weighing the implications of that course of action,"

Unlike those irresponsible companies choosing a path of litigation with... others. And without carefully weighing the implications of that course of action :D

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whole model doesn't make sense

Ebooks have an unlimited supply. No one will buy in bulk so why discount it? It just makes and middle man for no reason. So the publisher should be able sell their ebooks like app authors do.

I know there are a lot of tight asses that think if amazon gets its way ebooks will some how magically be 50p each. That's not going to happen. They'll probably even raise the wholesale price significantly especially on most wanted items. I don't foresee any benefit to anyone other than amazon perhaps.

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Why?

"why Apple wants to settle in Europe but fight on in the US is something of a mystery"

If the republicans get in they can just wave some money and get off, so might as well stall and see how that goes. They can always settle later if things look bad.

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FAIL

Competitive?

"The agency model is the one that offers consumers the prospect of an open and competitive market for e-books"

How is a market competitive if they're all selling the same thing for the same price?

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Re: Competitive?

Erm, that's not the case. The Agency model is one where you sell the books at all sorts of prices set by the publisher, and the retailer takes a set percentage cut. As opposed to the one where the Publisher sets a recommended price, and retailers use their clout to buy at whopping discounts of up to 70%. There's nothing about setting all books to be the same price.

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Re: Competitive? @Anne-Lise Pasch

I think you missed the point. The OP didn't mean that all books would be sold at the same price, but that an individual book could not be sold for a lower price than that set by the publisher. If retailer A cannot sell book B at a price lower than that set, then the retailer is not in competition with anyone else - he is merely an agent for the publisher. That leads to a reduction in consumer choice, and is probably illegal under EU law.

Personally, I find this model extremely offensive. Since there are no second-hand copies of e-books to be (legally) had, then the publishers are screwing everyone over. The joy with books has always been that, if you have sufficient patience, the book you want will always be available for half-price or less on the second-hand market within weeks or months. That is the way I have bought most of my books over the years (does that make me a freetard?), except for works by some authors I particularly like. One of the reasons I regard ebooks with suspicion is that they cost too much new, and I can't legally get them second-hand.

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Re: Competitive? @Anne-Lise Pasch

But that's the PUBLISHER forcing the model on everyone else. Using my previous example, if bAIn publishers sold Amazon ebooks at 30% of suggested retail, and Amazon cut back on the price, bAIn don't owe Apple because they sold it to them at 70% of SRP which matches Apple's price. Amazon are then free to sell below SRP if they think it makes sense.

I do agree with one of the posters above that while the system made sense with paper that was shipped and needed to be cleared from shelves, it doesn't make sense for ebooks because there isn't inventory as such to clear. If you think about it in that context for the long term, agency pricing makes a lot more sense than any lame attempt to eliminate it.

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Anonymous Coward

They are completely confident that all those free iPhones, iPads and iPods, which happened to find their way, gift wrapped into the homes of senior judges will have the desired effect. Especially when coupled with the catalogue listing their upcoming devices and a little "make the right choice" note.

(Could we please have a tin foil hat icon to choose instead of anon?)

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Devil

"The agency model is the one that offers publishers the prospect of an on-going and lucrative market for shafting authors and the public, whilst justifying their existence."

Fixed that for you!

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