Apple ebook price-fix row: Stiffed readers inch closer to $450m windfall An ebooks price-fixing lawsuit against Apple in the US is close to wrapping up – with the iPhone maker coughing up nearly half a billion dollars as a result, potentially. A US Judge on Friday granted preliminary approval to the $450m payment deal, in which Apple will settle with states' attorneys general over allegations of …
Expect Apple's 30% cut to become 40% to pay for the lawers, and the fines.
No wait, that's what got them into trouble in the first place. Perhaps they'll invent a fee of some type...
Rule number 1, Apple will get paid whether you like it or not.
Rule number 2, for any other conditions, refer to Rule number 1.
"... which is to buy books from publishers and then set its own retail prices – sometimes selling titles at a loss, which is good news for book buyers and bad news for rival Apple"
And catastrophic news for writers.
I wonder who these readers are who, instead of thinking, I can get this book cheaper elsewhere, buy the book and then join a class action lawsuit to recover a couple of bucks. Probably toasting their victory with steaming cups of Macdonalds coffee
"Probably toasting their victory with steaming cups of Macdonalds coffee."
Just had to correct this urban myth, spread by McDonalds themselves because they gagged the victim as part of the settlement. Look around on the Internet for the particular details of this. McDonalds served *boiling* coffee that hospitalized a woman, and she only sued for medical expenses..
"and she only sued for medical expenses.."
Originally yes, but not later on. Aside from the inflated punitive damages, all of that was tossed out on appeal, and a "non-disclosed" amount (wikipedia claims less than $600K, Snopes claims $480K) was eventually awarded.
This more than covers her damages, as she originally sued for $20K, which would have *just* covered her actual damages.
That said, she deserves the 480K anyway, Mcdonalds had been kicking her arse in every response before she kicked theirs. :-)
"Look around on the Internet for the particular details of this. McDonalds served *boiling* coffee that hospitalized a woman, and she only sued for medical expenses"
In fairness to McDonald's, she decided to rest it precariously in her lap and attempt too drive away with it. That's a pretty stupid thing to do. I'm not even a driver, but even I know people's legs move while operating the brakes, accelerator etc. This renders her improvised lap-table unstable enough to hold ANYTHING, let alone coffee of any temperature. I'm sure it was an oversight on her part.
No, she was an idiot, and her idiocy was rewarded. Or maybe McDonalds should have put clamps on her car to ensure she wouldn't drive away.
Cheaper elsewhere? Not entirely. The antitrust portion stems from the fact that Apple and the publishers were setting the price the book would be sold and when Apple sold book, they got 30%. What happens when Amazon sold it for the same price as Apple sold it, Amazon received 0%. So for Amazon to make a profit on the book, yes, they charged more than Apple. So, did the consumer really pay less with Apple? The answer is no since the price of the book was inflated by antitrust behavior. Oh, before you say it, Amazon could have sold it at a loss.
1) Why should they lose money when others participated in antitrust behavior causing those losses
2) Eventually only Apple is the one making any money and the sole provider of eBooks
3) The other retailers of eBooks were barred from offering them at a lower price
The publishers and Apple were trying to set prices.
except that selling at 0% or a loss at Amazon hurts every other bookstore, physical or online, because they cannot afford to sell at a loss. Note Amazon has made a consistent loss as a company for sometime now and investors are getting itchy feet. A lot of people think Amazon is the best thing since sliced bread, until Amazon starts to flex it's monopolistic muscle and then we all suffer with higher prices.
Apple colluded with publishers to raise the price of e-books, not lower them! The publishers have never liked that Amazon sold books cheaper than everyone else and were happy to make little or no money on them - Amazon has barely made any profit ever (check their earnings reports if you don't believe me) but the greater fool theory has kept their stock price in dot.com bubble range since the dot.com bubble burst for everyone else so they don't need to make money as they always use their shares for cash.
The publishers knew that the longer Amazon does that, the more brick and mortar bookstores get put out of business. That's why there are so many fewer than there were when Amazon started. Now Amazon was doing the same thing to e-books, pricing them so low they made little or no money, because they wanted to dominate the e-book market in the way they were dominating the physical book market.
Apple went to them and got them all to agree to set a minimum price for their books below which they couldn't be sold. They didn't have to twist any arms, the publishers all wanted this, but couldn't do it alone because they feared Amazon would quit selling their books if they went it alone and other publishers didn't match them. Apple got them all to agree "I'll do it if you all will", basically (which is collusion, and is illegal) Effectively it forced Amazon to raise their prices and start making money on their books. Unfortunately for Amazon, it meant they had no way to beat the competition by undercutting them, which is their entire strategy. Consumers didn't like it either, because e-books cost more without Amazon selling them at a no-profit price.
The DoJ stepped in, and invalidated those agreements, so Amazon can go back to undercutting everyone and making little or no money selling e-books, and Apple and the publishers are being called to the carpet for violating the law.
Amazon is playing the long game, figuring that they will eventually control the book market (both physical and e-book) so tightly that they will be able to tell the publishers what to do - and lo and behold, if you read the news they're doing just that with Hachette. They want to continue to drive down the profit that everyone else makes so the price of books becomes lower and lower so no one else can possibly compete with them. When they are utterly dominant in the book world, they'll be able to price books however they want, and collect almost all the profit. That's why their stock price is so high, everyone owning it is waiting for the day when Amazon has run all the competition out of business and quits selling stuff at a profitless margin and starts raking in monopoly profits.
When that happens, consumers will be screwed, because if they want books they won't have anyone else to buy them from but Amazon, and if Amazon charges $20 for a e-book and the author gets $1 and the publisher gets $1, well that's just too damn bad.
...and bookshops too.
I'd wager the damage in the USA is probably permanent, not sure about the rest. I think consumers and governments will rue the day they let Amazon develop such a strong monopoly in online sales. Although there are other costs to using eBay, at least I feel I support the smaller business. Maybe I am misguided about eBay.
"So I guess people buying Samsung are just as stupid as people buying Apple, right?"
At least they have made a conscious decision not to support a company that copyrights or patents public domain design traits, then retrospectively sue the people who are using them.
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