The US Department of Justice has hit back at criticisms of its ebook case against Apple and five major publishers, saying its critics either don't understand or are just looking out for themselves. The DoJ filed a case in April accusing Apple and five publishing houses of colluding on ebook prices in their attempt to counteract …
Apple would complain if they were shot with a brand new arrow.
I'm completely confused. So the argument is not about the agency model but only that the publishers colluded on pricing?
So what stopped them colluding before the deal, they could still collude and manipulate the SRP - and why is Apple involved?
why is Apple involved
Because Apple demanded a "no one can sell for less then me" contract.
In fact, any "favoured nation" contract should be deemed illegal anywhere; it's a nice obscuring way to prop up a monopoly.
Most Favored Nation
What the MFN clause did was make it so NOBODY could sell an ebook cheaper than Apple, nobody. That and the fact that Apple sat down with these companies and set the prices, which is classic cartel action BTW, is why they got busted.
Frankly nobody should be able to set the price but the retailer PERIOD and giving control to the publishers just breaks the entire free market when it comes to eBooks. If I want to buy your regular book for $5 a piece and sell it for $3 to get people into my shop its simply a "loss leader" and been done for ages but what Apple did was make it so that if anybody sold it for lower than Apple then you HAD to give it to Apple at a price lower than that, so it basically tied the hands of the retailers since you couldn't sell for any price other than what the publisher told you or they wouldn't sell you anymore product.
So I'm all for this and hope it means the DoJ is starting to grow some teeth again. Once I buy a product it should be mine to do with as I please, to sell it for more, less, or even give it away if i want to and these kinds of deals cripple the retailers who couldn't sell loss leaders anymore if this would have been upheld.
Re: Most Favored Nation
John A. Blackley is a pillock. Tee hee.
(see post further down)
Re: Apple sat down with these companies and set the prices
Apple NEVER discussed prices. In point of fact, that was the whole reason behind their adoption of the agency model: they had no idea what the appropriate price was. What they said was: you sell it to us at whatever you think is the appropriate price, we'll put x% markup on it, and sell it for that, but in exchange you guarantee you won't turn around and use our money to sell the same product to one of our competitors at a lower price.
Now, you may object to that, but it seems fair to me. The fact that all the other competitors chose to use the same markup might be an issue, but other companies should still be able to compete on other points.
Re: why is Apple involved
Which was exactly their policy in the UK with regard to their machines back in the late 80s/early 90s, and why the "grey" market arose (because they forced UK dealers to sell Macs at an inflated price - wouldn't even let UK dealers see what prices they gave US dealers - and it became cost-effective for certain dealers in the UK to buy from some US dealers and fly the units over, undercut Apple's price in the UK and STILL make a profit).
It's ironic that Apple chose "leopard" as a product nickname, IMHO. Spots, changing, and all that...
doesn't seem to be on solid ground on this one.
I hope they have some pretty concrete evidence that Apple and the publishers colluded on price (which should come up in discovery) or their case is toast.
See the post above yours :P
When there is money involved...
...many if not most companies/people will do whatever it takes to reap windfall wealth, laws be damned.
The real problem is that Amazon has such a huge chunk of the market, sometimes sets remarkably low prices, and authors are wondering if they can make enough money from writing books that they can make a living.
The balance here might be tricky. but Amazon is getting away with a lot, both dodging tax liabilities and paying less to the people doing the vital work of writing new books. The DoJ, and its equivalents elsewhere, are letting Amazon get away with a huge market manipulation, one which cuts prices but may wreck the business of publishing.
And Amazon isn't a book company any more. They're doing internet sales and delivery, and are little different from the supermarkets, big enough to ride roughshod over their suppliers. Like the supermarkets, they don't cut their costs by greater efficiency, they cut their costs by abusing the suppliers.
What the DoJ says about this particular deal is mostly right. But is any lawyer going to say they were wrong? And the DoJ is letting Amazon get away with it, while hounding the publishers who are trying to find an alternative.
Since when do Amazon pay authors?
If an author self-publishes on Amazon they keep 70% of the price they set, which is more per copy than they'd get from a publisher.
If an author is published in the traditional fashion, they get the percentage of whatever the publisher sells the book to Amazon for, and what Amazon retails the book for makes no difference to what they get paid.
In another life I was a published author. My book retailed for UKP5.95. My publisher paid me a royalty (after their costs were deducted) on a sliding scale that worked out to about 25p per copy if the bookseller bought from them at that retail price (which meant they would have made a loss on every book, and who's going to do that?) and went downwards rapidly to a pittance - if the publisher sold at a discount to the bookseller, I got even less (i.e., the percentage of my royalty went down the more the book was discounted to the bookseller, which worked out to about 5p per book for the largest discount).
As I see it, even selling an eBook at 99p through Amazon means the author will get far more today - even as a proportion - than I got in 1984, and the market is potentially much larger than it would have been under the old system, so the possibility of earning a decent living as an author is better now than it was thirty years ago.
This doesn't mean authors are guaranteed riches, obviously. A crappily-written eBook is just as useless as a crappily-written printed book, after all...
A crappily-written eBook is just as useless as a crappily-written printed book, after all...
Arguably not, since eBooks can and often do cost less to the customer than print books. Not only do they often retail for less, but they don't take up the same resources (shelf space, weight when you move, etc) as print books. They take some digital storage resources, etc, but those are much cheaper than the physical resources required by print books. And while in theory both kinds of books pose the same opportunity costs ("I could have spent that time reading a better book"), a book that represents a lower tangible investment feels like it has a lower intangible investment as well. If you buy a used book for 50 cents, and you decide a few pages in that you don't like it, you don't feel so bad about not finishing it as you would if you'd paid $20.
So that means that eBooks are smaller investments for readers, and that means that a significant portion of the market may be willing to accept a lower rate of return on them, and that means expectations will be lowered. And so crappily-written eBooks may well do better than crappily-written print books - and in fact that seems to be happening.
Only banks are allowed to conspire openly against the public.
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