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back to article Apple returns to courtroom once again to contest ebook shafting

Apple is back in court this Friday to contest the punishment it received in the US ebooks pricing trial. The government has tried to show how serious it is in several ways. Firstly, it ruled that Apple had to end its contracts with the five publishers and be prevented for five years from entering contracts that the Justice …

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Anonymous Coward

Prediction

Cheers from the Apple haters will drown out all reasoned and rational discourse in this thread.

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Anonymous Coward

Re: Prediction

Reasoned and rational discourse will drown out the Apple fanbois in this thread.

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Re: APple only have hate?

So, have you nothing positive to say about Apple?

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Re: Prediction

Wow, nice of you to insinuate that if someone doesn't like Apple, then they must be unreasonable and irrational.

Let's not forget Apple see themselves as more worthy of being a monopsonist than anyone else. They'll start a nuclear war over it...

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Re: Prediction

It's not so much the Apple haters, of which I can reasonably be numbered. It's the freetards who are quite certain they are getting ripped off if the price of an ebook is anything much above zero.

What Apple did in this instance is quite reasonable from a vertically integrated, previously uninvolved competitor standpoint: We want to get into this market. We don't know what the right price is. We want margin X, when everything is said and done. If you'll agree to give us that percentage, we'll charge the price you set. And to protect ourselves, if you offer a competitor a better price, you have to offer it to us as well.

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FAIL

Re: Prediction

I note that all the comments criticising Andrew's article and some of it's assertions have been removed.

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Meh

Re: lame

"Mind you I'm still waiting for publishers to sell me a book and ebook together (ala double play) but they don't appear to be that bright."

BAEN have been doing this for years. Buy selected hardbacks - get a DVD stuffed full of 20-30 of their ebooks.

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Re: lame

It all came down to the Agency model being legal, but one company asking for it to be applied and co-ordinating suppliers into its' application being tantamount to price fixing.

Interestingly, as much as many like to see Apple and the American govt as in bed with each other, the reverse is the truth. Apple's political lobbying budget is minuscule. Due, historically, to Steve Jobs being notoriously tight on the purse strings. Amazon's lobbying budget by contrast is colossal. It's interesting that the proposed solution is highly proscriptive of a lasting business solution that is much to the advantage of Amazon and deeply affects businesses beyond Apple and beyond the remit of this case, massively strengthening Amazon's hand. Especially since Amazon is already a monopoly steamrollering the publishing industry. There were other solutions (such as a straightforward and significantly large fine such as the EU levied on MS for their anti-trust case) or, since Apple has huge cash reserves, some other remedy that doesn't specifically grant Amazon such an advantage.

Of course many will weigh in pointing out the Presidential veto over the Samsung patent win, but there you are talking about an foreign multinational versus a US multinational. So to my eye, this does rather seem to bear out the message Lawrence Lessig gives in his seminal book, Republic Lost.

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Re: lame

You forgot the part about the CEO saying he wanted to raise prices.

In the end there is nothing illegal about being a monopolist, provided you get there by normal competition, and don't harm the consumer. What is Illegal is colluding to fix prices.

Other then PROPER innuendo, I've not seen anyone accuse amazon of violating any real law.

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Unhappy

Re: lame

"But Apple is a vertical player, one which had zero market share in the ebook business when the alleged horizontal conspiracy was hatched."

Similar to how a bank robber has zero cash in their pocket before a robbery. Pointing out the obvious here isn't helping Apple's defense.

At least the anti-Apple rants/articles attempt to obscure the obvious.

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Re: lame + Baen

Sadly they no longer do this after they teamed up with Amazon et al or amazon would be giving all of those books away

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Re: FOUR 'victims' confessing

When the government comes knocking on the door of a marginal business and says "nice business you got here, shame if anything were to happen to it. Now sign these papers admitting your guilt and we'll let you off easy." it's not a confession. It's extortion under guise of law. So yes, it is thin and it flies in the face of established legal precedent.

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Whatever.

My question is "Who is clueless enough to purchase from corporate marketards"?

I have a library full of dead-tree books ... and have contributed to Project Gutenberg.

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LDS
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You didn't listen to what the judge said.

THe judge told if Apple thought Amazon was not playing fair it should have taken Amazon into court, not adopt another monopolistic behaviour. Apple was not trying to break Amazon monopoly, was trying to build its own. So the problem is not to allow also Apple to behave bad because Amazon does, it's to break any monopoly - including Amazon and Apple ones.

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Re: You didn't listen to what the judge said.

Besides, it wasn't the agency pricing model that caught Apple's hand in the cookie jar. It was (and note it wasn't mentioned in the article) the "most favoured nation" clauses in ALL of Apple's publisher contracts. In return for Apple posting the stuff for sale in its iTunes store, the publishers agreed they would NEVER let their stuff sell their stuff for less than Apple's price (at retail), allowing them to force Amazon to raise their prices lest the publishers get nailed for Breach of Contract.

It was the judge who basically pointed out (pretty explicitly), "You can't use price fixing to fix a dumping problem."

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Re: You didn't listen to what the judge said.

But Amazon was bad first, they did stuff we didn't like!

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Facepalm

Orlowski, you didn't study the case did you?

The real problem with Apple's price-fixing case was with the MFN clauses. The publishers could claim they had to jack up their prices because Apple was "forcing" them to up 'em via the MFN clause. And they did. The prices did go up across the board for the involved publishers, they didn't go up for non-involved publishers.

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Re: You can't use price fixing

Except Apple didn't fix the price. Anybody could come in and negotiate a lower price if they thought it was appropriate. Apple only fixed their margin, and said they couldn't be sandbagged.

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fairy tale pricing (for the publishers)

"Apple merely promised publishers it would not sell at a loss. Publishers maintained their wholesale agreements with Amazon. Retail prices briefly flickered from just over $8 to just under $10, and were more widely dispersed after Apple's unsuccessful entry. "

This is a joke right? on what planet do ebook costs remotely approach what amazon charge never mind apples fantasy. Don't forget most of the costs would have to be borne by the dead tree release anyway.

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Remember the lesson is not to publicly boast about your illegal secret price fixing cartel.

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What planet is Mr Orlowski living on..?

...It's plainly not the same one as the rest of us.

"If Apple's agency model briefly raised the prices of a few digital bestsellers – blink and you'll have missed it – Amazon nevertheless continued to discount the vast majority of ebooks heavily across the line."

When Amazon are forced to sell EVERY bestseller Kindle edition for MORE than the hardback, you know something is wrong somewhere.

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Re: What planet is Mr Orlowski living on..?

Prices are often set by the publisher. I know a few who believe that a) they can charge more for digital versions because they are more convenient and b) because its the early days of the market. A few also want to dissuade people from buying digital versions strangely enough...

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Re: What planet is Mr Orlowski living on..?

The planet where Amazon controls 90% of the e-book market. He forgets, however, that most of that stuff is hardly more than slush-pile method-writing. The real good stuff is increasingly self-published, as authors and their agents realise they don't need the old publishers and retail chain anymore unless they want dead-tree format out. And even dead-tree does not require the publishers anymore..

Seen from the point of the Industry, he may have a point, but publishing itself is changing fast and the old behemoths, like in the music industry, are unable and/or unwilling to adapt.

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Anonymous Coward

Re: Biased or what?

by that argument, 90% of El Reg commenters must work for Samsung or Google???

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"The lasting "harm" to the public by Apple and the five publishers – who were bullied into private settlements by the DoJ – is even harder to discern."

Just go and look at what happened to the average price of an e-book once the arrangement came into place. I would suggest that people having to pay 50% more for their e-books after the cosy relationship started counts as "harm" to the public? If all the makers of TV's got together and came up with an arrangement that made the cost of all new TV's to go up by 50% how would you describe that?

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I was reading the article and noticed how much Apple fanboi it was. Thought to myself is this Orlowski ?

Supriise suprise it is.

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Same here.

But not before I had already stopped reading, because this article lacks the usual comedic value. It's just a plain old bitter rant. Misrepresentation of facts in a thoroughly unfunny manner. A study on tediousness. Must (and used to) do better.

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I dunno, I found this quite amusing

Apple's proposed punishment goes far beyond that of the publishers, who had begun to meet to discuss Amazon's dominance months before Apple made contact with them.

Not a single mention of the fact that it might just be because the publishers had the good sense to settle, whilst Apple, in it's arrogance, decided it could win.

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Yeah, yeah..

Look at the top of the Reg page - see that masthead, the bright red masthead.

Mr Orlowski is extremely good at writing articles to gain a reaction - it's his job, as it is the job of every editor of every journal - and looking at the the responses here, he's done his job well.

It does come across as an Apple biased article, but he has also done Android, WinPhone, and various other articles, the primary purpose of which is to get us commentards frothing at the mouth and raging in the comments.

Back on topic - the DoJ has a fairly long track record of shafting folk on anti-trust issues, have a look here:-

http://www.justice.gov/atr/cases/index.html

Personally, I don't think that this is too extreme.

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Point missed?

No-one's stopping Apple selling anything at whatever price they like. At least, they _weren't_, anyway.

If there'd been no collusion this wouldn't have happened. The penalty for Apple is not because it sold books how it fancied, but because it was shown to have _colluded_ to seriously harm a competitor, regardless of the size of that competitor.

That is why they got their arse kicked, not for trying to run an honest business as they deemed fit.

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Re: Point missed?

> No-one's stopping Apple selling anything at whatever price they like. At least, they _weren't_, anyway.

You're forgetting Apple's God given right to take a straight 30% cut in all transactions.

Without a most favoured nation status that guarantees no one will under cut Apple, they would face the heretical prospect of not being able to make this profit.

So yes Amazon are stopping Apple selling things at the price they like.

While Amazon are allowed to compete, Apple's profit margin will be tiny. For some reason customers notice when you're prices are nearly 30% higher than your competitor and then they have the total audacity to buy stuff from the competitor instead of paying the price that you want to charge

Its not fair

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Re: Point missed?

So why not just take Amazon to court for dumping? That's what the judge was pointing out to Apple.

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or this version?

You're forgetting Apple's God given right to take a straight 30% cut in all transactions.

don't they all take some cut or other??

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Re: or this version?

> don't they all take some cut or other??

Sure that is what business is all about. But this case is about a most favoured nation clause in the contract that means that there can not be any competition on price. If someone feels they can make a living on less than 30%, then they should be allowed, but Apples contract with the publishers was aimed to stop there being competition on price. Which is why they've got the slapping they did.

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Re: Point missed?

Apple couldn't take Amazon to court for dumping - since Apple weren't in the ebook market at the time, there was no loss for which they could seek compensation. And anyway, I doubt if "dumping" was illegal.

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Re: Point missed?

> I doubt if "dumping" was illegal.

Many, if not most, major retailers sell things at a lost. Lots of the supermarket prices you see in the ads will be loss leaders, to get you through the door. No ones ever stopped people doing this.

I remember years ago doing some work with a holiday travel company and they explained that everything they sold they sold at a loss, but their customers had to pay them in advance and they paid their suppliers in arrears and so their business worked on profiting from the cash in the middle, I understood this was a common business model in lots of areas.

I guess the law only gets interested when a company sells things at a loss to put its competitors out of business and then when it feels sufficiently confident that it owns the market it hikes its price. I certainly hope this sort of behaviour get monitored.

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Re: Point missed?

Apple could've argued that Amazon was pricing them out of the market, PREVENTING them from entering the market. Being blocked (contractually or financially) from a market can be considered a harm, giving Apple the legal standing to sue.

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'Apple merely promised publishers it would not sell at a loss.'

It also forced a minimum price on other sellers by putting a most favoured nation clause into their contracts with the publisher. In other words they were basically saying that they would force others not to sell at a loss too, which is why they were dragged through the courts in the first place. It's rather convenient that this doesn't get a mention.

As for publishers they might get more sympathy if they actually put more effort into their digital offerings. I've often found typos and other errors in e-books purchased off both Apple and Amazon that I simply would not expect to see in anything that has been professionally published. Since this problem is not specific to Amazon I can only assume that the publishers are the ones that are responsible for this.

It's as if they lacked a digital copy of the older books so they just scanned a copy and then dumped the results online without bothering to get a proof reader in to check the results first.

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Caught redhanded

I do not understand why the DoJ judgement is so controversial. Surely a free market should allow sellers of products to sell them at whatever price they see fit. Whether they make a loss or not is their problem. What Apple tried to do is manipulate the entire market by colluding with publishers to prevent any other sellers of books from selling them at a lower price than Apple. Whether Amazon is the dominant player or not is to me irrelevant, its the over-arching manipulation of prices that is the problem here. Amazon is only the dominant player because is sells books cheaper than the other players. Last time I checked, Apple had more cash stashed away than the US government, it could always use some of that cash to compete with Amazon. But instead (and very similar to its tactics with patent battles with Samsung) it prefers to try and shut down competition rather than compete.

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Re: Caught redhanded

It's controversial because Apple was caught rigging book prices, but the punishment extends to "music, movies, television shows or other content", which does seem to be a little bit outside of the scope of a court case that was about eBook price fixing.

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There is no 'good' in this

Another week, another objectionable mess the courts get to play legal whack-a-mole with. With the courts themselves being a rather stinky mole too.

The whole digital media distribution thing is a nasty mess it makes me weep. Established copyright holders meets web seems to be such a sales opportunity that continually fails.

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This was a thin case that relied heavily on conspiracy and innuendo

You forgot to mention Jobs' e-mail, his own goal!

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