Apple: If you find us guilty in ebook price-fix trial, EVERYONE suffers Apple has claimed that ruling against it in its ebook price-fixing trial will have a "chilling effect" on how businesses enter new markets. The fruity firm's legal beagle, Orin Snyder, said in closing arguments of the proceedings in New York that finding Apple guilty would "send shudders through the business community", …
finding Apple guilty would "send shudders through the business community", according to court reporters.
"We submit a ruling against Apple on this record sets a dangerous precedent,"
Rich companies/people can't always do anything they want?
"Apple attempted to arrange the best deals possible with publishers"
Literally, make it so no one else can negotiate the best deal possible, as Apple already have an exclusive on that.
"This is an old-fashioned, straightforward price-fixing agreement."
I don't think Apple really disagree with that statement, they just don't see it as a problem, but as a good thing.
They could also theoretically have the case heard before the entire Court of Appeal rather than just the usual three-judge panel. As for SCOTUS, they MIGHT take up the issue if it raises a fundamental question on what constitutes a fair interstate trade agreement (something directly in the federal government's jurisdiction).
It wanted prices to raise so its cut on sales would have been higher - while increasing prices for competitors too that had not the agency model so they couldn't compete any longer.
And it could attempt it because it was Apple, it if was another unknown business trying to enter that market it would have never had that power. Why Apple didn't ask to get books at Amazon costs? Simple: because Apple likes to force its high fees on whatever it allows on its devices. It's a mafia-like approach.
The publishers have not settled out of court - they have not paid to have their case dismissed. They have stipulated a final judgement that admits guilt and sets major restrictions on their future business model. While they haven't gone through a trial, this is not the same as a criminal prosecution dropping the case - it's the civil equivalent of pleading guilty.
Check the proposed judgement here: https://www.federalregister.gov/articles/2013/02/25/2013-04234/united-states-v-apple-inc-hachette-book-group-inc-harpercollins-publishers-llc-verlagsgruppe-georg
Agreed. I'm not sure it is the best model for the consumer - "let the producers set the price" always ends up with more expensive goods* - but, without the MFN clause and a bit of humility it could have allowed the market to settle somewhere between the two. The producers would have had to adjust their prices to what people are willing to pay, and Amazon might have realised that they could get away with making more money by charging *just* less than the Apple/publisher model. Win/win, I'd say.
I'm very concerned about the influence of Amazon on the book market, and would have supported both Apple and the publishers if they had done this properly. As it is, I despise them all.
* However, "let the retailer set the price" also tends towards screwing the consumer too, just in a different way.
A ruling against them would have a very chilling effect on how companies enter new markets.
If they lose this case, companies will have to spend hours of executive time coming up with new ways to better hide their tracks when they want to disrupt a new market by illegally price-fixing to cause the incumbents to have to increase their prices.
This extra time will cause executives to demand better conditions than their already paltry salary and benefits packages, which will eat into shareholders' returns. Sure they can probably offset a bit of the costs by firing some of the plebes, but do that too often and you risk shrinking the market for your increasingly expensive products a little too much.
Correct, and it's because Apple does shenanigans like this that there's such a hatred of Apple.
All Apple did was "negotiate with suppliers for the best possible prices" - good business sense. But when your negotiations include exclusivity of supply agreements you are preventing competition.
I'm not suggesting Amazon's attempts to corner the market were any better, but at least they left the market open for competitors to negotiate cheap prices and supplies.
What is really scary about Apple is that by restricting the market and publishers you are controlling what can be read and by whom it can be read. Very soon the world is only reading Apple sanctioned texts.
Amazon cornered the market by being first to market with a decent product and price and Apple didn't want to deal with that. They wanted a special kick to help them make tonnes of money and hurt Amazon. Apple didn't ever care about the book sellers themselves or the customers.
Remember, the book sellers themselves could have at any time come up with their own readers; their own online market; and their own online selling prices.
They did not.
Amazon cornered the ebook market by selling books on the best sellers list at a loss, cross subsidising from other parts of the business.
Best sellers wholesale at $11 a title, Amazon sell them for $9.99, Apple wanted to sell them for $12.99 and not be undercut by anyone.
Well boo hoo.
I'm sure Sears don't want to be undercut by Target. Should Sears be able to set the price everyone sells for?
Who gives a crap what apple want? They can charge $12.99 if they want, no problem. And everyone else can charge what they want too.
Don't forget you're talking Ebooks here...No physical object that needs production/shipping/storage, just a file suited for a (locked in/DRM-ed to hell and back or not....) display apparatus of your choice.
I'm a huge fan of the dead-tree format, and prefer my copies of my fav authors to be first-edition hardbacks, and am willing to pay for that. Ebooks? Not so much. The publishers themselves have been pulling the mickey when it comes to "costs" to begin with. Amazon just placed it's pricing point where they thought people would actually buy Ebooks.
"Best sellers wholesale at $11 a title, Amazon sell them for $9.99, Apple wanted to sell them for $12.99"
And they sell for $30 in Australia. Less than half the cost to fly a dead-tree copy from the other side of the planet, let alone an ebook.
Any wonder greedy Aussie book retailers are folding faster than Superman on laundry day?
Now, if you're a newcomer to the market, and you have no way to loss-lead, how do you undercut Amazon, who is loss-leading up the wazoo? There's a reason excessive loss-leading is frowned upon by market cops as "dumping". If taken to court, Amazon could be found guilty of dumping so as to force out competition like Apple. Just saying two wrongs aren't making a right here. Amazon is bad enough for dumping, but Apple took the low road in trying to combat the dumping.
"Best sellers wholesale at $11 a title, Amazon sell them for $9.99, Apple wanted to sell them for $12.99 and not be undercut by anyone."
Check your numbers. Apple wants 30%. So if they were to sell the book for $12.99 they would only be paying about $9.10 to the publisher, not $11. If the publisher wanted $11 then that means the "fixed" retail price that Apple would be charging $15.70.....and no one could sell for less.
Thats what they are doiing to the prosecutors . EVeryones suffering would be less if they didnt ask for a higher price agreement, to cover their 30 percent cut.
Extrpolating the argument, can DOJ aslo prosecute APple for the Drm'ed agreement for seling Itunes. SUrely, thats a conspiracy to charge higher prices to consumers too! Cs they get their cut from the music industry.
Glad they have not yet played the "dont you think of the children" card.
Their lawyers would argue that this would hurt all American childrens' studies (due to not having books on I-slabs) and therefore their competitiveness would suffer and therefore create an ingnorant generation and therefore America would lose its domineering leadership and therefore giving more opportunities for terrorists to attack USA and prolong the recession and therfore so on and so forth.
You see, we are not greedy. Doing it for the Children.
> In a just world one freely sells to the highest bidder. It works on eBay.
[emphasis mine]
If you offer the same items in multiple auctions, you sell at the final bid, you don't tell the purchaser "you can't buy because 'sjobs' bought another one of the same in a previous auction for more than your bid and now I can't accept any auction results less than that".
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