back to article Publishers, Apple bend over for EU eBooks probe

Four of the publishers in the Europe’s antitrust ebooks price-fixing probe, along with Apple, have offered to scrap their agency model in Europe and allow retailers to set any price they want for ebooks. The offer, if accepted, would hold good for two years. The parties have also offered to suspend "most favoured nation" clauses …

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Facepalm

So the offer is....I won't manipulate prices now....but I will later. WTF !!!!

"The parties have also offered to suspend "most favoured nation" clauses for five years."

This is the biggest joke of the day IMO. So the generous offer from Apple is that....we won't do it now...but after a couple of years....its back on. Whats the point of this? If its wrong now...then it will be wrong two or five years from now. Apple is one of the biggest monopolies around. Try and get content for any IProduct without going through Apples store. You can't. Apple users will have zero options to shop from other less expensive vendors.

Any one who thinks this offer is NOT an insult....is a fool.

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Facepalm

Re: So the offer is....I won't manipulate prices now....but I will later. WTF !!!!

what are you talking about, you can buy MP3's from anywhere, you can load any compatible videos to your idevice via itunes, audiobooks - buy from audible

buy your digitalbooks from amazon and install the kindle app

there are many other options, you do not have to buy via itunes

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Anonymous Coward

Re: So the offer is....I won't manipulate prices now....but I will later. WTF !!!!

You seem to be forgetting the point that *neither* the agency pricing model *nor* the most favoured nation clause is (in legal terms) wrong at all, either now or in five years time. So yes, it is a generous offer - though admittedly its presumably designed to cynically attempt to reduce the heat in the EU kitchen.

The issue for the US DOJ was not what Apple and the publishers did but that the timing of all the parties involved (save one, Random House I think but I could be wrong) implied collusion - which if it leads to market fixing is most definitely wrong.

It is only the punitive measures of the DOJ that are bringing about the dropping of agency and favoured nation, not the fact that they are inherently against the law in and of themselves.

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Re: So the offer is....I won't manipulate prices now....but I will later. WTF !!!!

My problem with Amazon is their books only work on platforms they decide to support. So I don't really care if it turns out books are cheaper through amazon getting their way. I'd rather pay more for a DRM-free book.

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Re: So the offer is....I won't manipulate prices now....but I will later. WTF !!!!

I think the cost of *some* ebooks on Amazon is unreasonably high. Ironically, I now check the cost, see if there is a good secondhand paper version at a reasonable price and if so, buy that.

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Facepalm

The only loosers will be the consumers. Price fixing now or two years later is still Price fixing.

"The offer, if accepted, would hold good for two years. The parties have also offered to suspend "most favoured nation" clauses for five years."

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Windows

They'm scurvy price-dogs, arr ??

It be talk like a pirate day come Saturday, yes it be, ARRRR

Seems like they at El Reg are be gearin' up ARRRR

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(Written by Reg staff) Silver badge

Re: They'm scurvy price-dogs, arr ??

Avast! Talk like a pirate day tis always the 19th day of the 9th month - today no less.

C.

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Silver badge

Re: They'm scurvy price-dogs, arr ??

Yaar, ha' none of ye other lubbers seen them subheads today - all writ nice'n proper. A flagon o' rum for the subbie!

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FAIL

For shame

It be this day. I'll take I self off for a long walk off of a short plank. For me sins ...

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"While the alleged price collusion is bad, monopolies are arguably worse."

Yeah, right. Like Amazon will be able to push Apple and Google out of the eBook market.

Apple with its vast war chest is far better suited to sell eBooks at or below cost if needed to stand against Amazon.

And Google has a broad collection of services and products as well.

Amonst these three, Amazon is the one that relies most on the profits made from selling books.

This argument that Amazon may gain a monopoly on the ebook market is BS.

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Bronze badge

Limited time offer

It almost seems odd that they clearly know what the EU doesn't like about this but think that offering to put it on hold for a few years will 'fix' the problem......obviously they haven't realised that in EU-Land the people who hold the power are neither elected nor accountable so they would still be in charge in five years time.

This 'putting the decision off' trick only works if it will be a different mob making the decisions.

The 'most favoured nation' clause is the one that will stop this dead as it removes competition since no-one is able to make a better deal. I have no clue as to whether the current system is better/worse/legal but it has the major advantage in that it doesn't stop other companies coming in and making their own deals. They may not be able to get a better deal than Amazon has but to be realistic, Amazon came in when the market didn't really exist to any real extent and so was able to offer a pittance for the world. A lot of the whining from the publishers could just be sour grapes as they hadn't realised just how big that goldmine they were sitting on actually was.

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Bronze badge

Re: Limited time offer

Specially considering that Amazon has razor thin margins in everything, last quarter they needed 1,280 million dollars in sales to make a paltry 7 million dollar profit.

Yes, I know they are building lots of warehouses, still those are pathetic margins.

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Competition is good for the consumer (that'd be us), price fixing is bad for the consumer (still us). If Amazon are able to offer the e-books cheaper than Apple then there is a solution, Apple drops their prices to match it (and with the billions in the bank it's not as if they can't afford a price war....).

Having everyone selling their e-books at £9.99 is not a good thing, it's not even as if Amazon limit their books to one device only, unlike Apple, so if Apple want to continue selling at £9.99 and get their 30% cut then let them, but I'll happily let Amazon drop the price to £4.99 and buy from them instead - okay, I won't buy from them because I prefer physical books which means I'll get my books from Play.com instead.

I'm not sure the "bad for the author" thing holds up though does it, wouldn't an author get paid per book sold, a fixed bit of cash worked out in advance "we'll pay you £1 for the first 100k books then 50p for each book sold up to 250k and then 10p per book after 500k" for instance?

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rather than the Agency pricing for Apple being the problem, i always thought it was the 'first nation' clause that was the problem,

surely Apple is free to negotiate what ever pricing it wants. Amazon and others should also be allowed to do so. if Apple wants 30% margin on everything then fine, if Amazon wants 1% then fine

let the consumer decide what is their preference

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Silver badge

I'm not sure the "bad for the author" thing holds up though does it, wouldn't an author get paid per book sold, a fixed bit of cash worked out in advance "we'll pay you £1 for the first 100k books then 50p for each book sold up to 250k and then 10p per book after 500k" for instance?

Not if Amazon are setting the prices, in which case they are free to discount the

This quote from a publisher:

When ebooks started, we were pricing ebooks at the same price as the print book, and Amazon was selling them all for $9.99. So they were losing like $3-$4 per book. And they weren’t doing it simply to move Kindles, since they don’t actually make any money on the Kindle unit sales. Now with the “agency model” we get to set the ebook price and Amazon simply takes 30% of that. source

The agency model is the one that Apple et al are getting sued for. Before the agency model came along, Amazon bought ebooks wholesale, and sold them as a loss leader:

So for instance, for a new e-book, let's say the list price was around $24.99. Amazon paid publishers $12.50 per copy, but then turned around and sold the e-book for $9.99. They took a loss on e-book copies to help sell Kindles and to build a huge early lead in the e-book market.

Take that $24.99 list price. Let's say the e-book would have sold for $9.99 at Amazon in the old days but now the publisher charges the consumer $12.99:

Wholesale model e-book:

Publisher: $12.50 (roughly 50 percent of $24.99 hardcover retail price)

Amazon: - $2.50 (selling at $9.99)

Agency model e-book:

Publisher: $9.09 (70 percent of $12.99)

E-bookseller: $3.90 (30 percent of $12.99)

This wasn't a story of money-grubbing publishers trying to stick it to consumers. They actually left money on the table.

The result: The e-book marketplace competition that publishers wanted began to take place. Rather than competing on price, e-book sellers like Apple, Barnes & Noble, Amazon, and others have, up until now, mainly been competing on user experience. source

Amazon subsidize all their ebooks sold under the wholesale model by selling related kit, and generally encouraging people to buy stuff from Amazon. Because they, in effect, are not competing means that there is no effective competition in the ebook marketplace. The only way to get an ebook would be from Amazon.

I don't agree with 'favoured nation' status, that seems like anti competition bullshit to me, but allowing Amazon to scoop up all the ebook market by default would be bad, I feel. The agency model, without 'favoured nations', allows all publishers and sellers to behave fairly, where as with that clause, the sellers are protected against price wars against other sellers, with the publishers taking the hit if a non favoured seller lowers their prices below the favoured seller.

If Amazon then wanted to compete on price, they could only do so by reducing their cut, discounting the cost to consumer out of their cut, and publishers have a measure of reliability about what they will receive. They would still be able to undercut other stores by selling as a loss leader, but they wouldn't be able to screw the publisher.

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Noothiingg in that article you list supports your point BTW, Most of the costs are apprently nothing to do with the phyisical book (source http://www.baen.com/library/prime_palaver.asp) I been reading ebooks longg before I ggot my kindle via baens online ebook store. the author gets his cut from what amazon pays the publisher. Not what I may or others pay amazon.

Hell buying my fav authors ebooks when its only out in hardback at hardback prices is something I am ok with, paying hardback prices for books that are not out in harback is step to far. I have also found a ccouple of authors via amazons self publish route. there is nothing stopping publishers selling ebooks directly in a number of formats (indeed baen have been doing this for about 10 years now, including kindle formated books, theres 6 formats that they will supply not including online HTML versions).

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Silver badge

Dear EU

Legislate digital works like video, music and books as digital property with the same inherant rights of fair use, 1st sale etc. that are enjoyed by physical media. If the above needs an industry standard formats and a cloud based DRM to implement then so be it, but do it.

Stop letting the likes of Apple, Amazon etc building vertical empires where content only plays on a restricted set of devices and where a person does not even own the content they buy, merely a licence to it.

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Charlie Stross

Has a take on the US side of things that's well worth a read.

http://www.antipope.org/charlie/blog-static/2012/04/understanding-amazons-strategy.html

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Anonymous Coward

Apple could sell books at a loss, but they won't...

To all those stating that Apple could use their billions to get into the eBook game by matching Amazon, yes, you're right. They *could*.

But I bet it'll be a cold day in hell before the decide to get into the retail game by selling loss-leaders.

Without the agency model there is no way anyone can compete with Amazon on prices.

And sorry, but the odd price difference that'll no doubt be mentioned in follow-up posts don't count - we're talking about the majority of prices.

The agency model isn't perfect, but nor is letting Amazon be the only shop in town by letting them undercut everyone else.

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Re: Apple could sell books at a loss, but they won't...

"But I bet it'll be a cold day in hell before the decide to get into the retail game by selling loss-leaders. Without the agency model there is no way anyone can compete with Amazon on prices.."

Because it costs so much to make the warehouses to store and the internet tubes to deliver the ebooks right?

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Anonymous Coward

Re: Apple could sell books at a loss, but they won't...

It's not the logistics that prevents new entrants, it's the loss on the balance sheet they'll have to suffer trying to attract customers.

A new player would have to at least match amazon, if not beat them on prices.

And even then there's no guarantee they'll survive - us punters are a fickle lot

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Anonymous Coward

why is it?

why is it that no matter what the court case, no matter where it is, so long as it involves phones, tablets, computers or any other electronic gadget, it appears that apple has some lawyers at the table or playing some part?

I wonder what the annual spend on layers are and what returns apple get back.... it has to be close to actual revenue from sales!

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