Posts by Al N

Re: The law.

"You may only need preponderance of evidence, but you still need that proof. Simply asserting "everybody is charging the same price" does not meet even the lesser standard of preponderance of evidence."

No, you don't need proof. And the government is not just asserting that "everybody is charging the same price," and I find it hard to believe you think that is the gist of their case. You mentioned that you read the PDF. Are you sure?

Re: @Al N

"For someone who believes the publishers possess and ought to possess so many varied powers over their product, you seem oddly unwilling to assign them the one power they ought to have over it: the power to set the price and terms on which they will make a sale."

Check that last sentence and find the error. "THEY will make a sale."

Do you see the problem? What sale are you speaking of? The publisher sale to the retailer? The retailer sale to the consumer?

These are negotiable terms, not RIGHTS. The publisher can ask for price-point control over its product that another entity is reselling, but the retailer can refuse. The publisher can then drop the demand or pull its product and walk away. The publisher can also (and always will in a wholesale model) negotiate the wholesale price. This is the same as what terms are granted in the licensing; negotiable. That leads back to the sole RIGHT the publishers have when dealing with a retailer--the right to walk away from negotiations.

If publishers (selling through a 3rd party retailer) want to set the retail price, they must negotiate for that control with the retailer. If publishers want to limit how their product is distributed, they must negotiate that ability with the retailer.

"So far the only proof offered that there was collusion is that all of the distributors wound up selling at the same price. Markets do that all the time."

Why do you mention proof? What does proof have to do with this case? This is not a criminal trial where the prosecutor must "prove his case beyond a reasonable doubt." This is a civil matter, and the plaintiff (the US Government) simply needs to show a preponderance of evidence, which can be entirely circumstantial. The plaintiff doesn't need to prove anything.

Also, as I said in another post, I'm not even sure why this case went to trial. Apple has already "lost." While Apple may still be at trial, the other publishers have settled and are restricted from employing the agency model of pricing and from employing an MFN clause. That includes their dealings with Apple.

If Apple wins, it isn't going to turn back the clock. It will still not be able to sign new agency agreements with the settling publishers, at least not for several years. If it loses, however, it will suffer more harsh penalties, and since appeals delay the enforcement of those penalties, Apple could be double-stacking itself with penalties in regard to the agency model (it's already under an indirect restriction because of the penalty on the publishers, but it would get its own penalty long after the publisher restrictions have been lifted).

A settlement would have placed Apple and the publishers on the same timeline of penalty expiration. And against the government, you generally don't get back your attorney's fees if you win your case.

Re: Bah!

"If the ebook kills the hardback, it also kills the publisher."

Not entirely true. Ebooks have a higher profit margin than print books of any kind. In fact the publishers are making bank on that new ebook profit margin, as noted in their SEC filings. Where ebooks hurt publishers in that revenue number, which is a consideration to investors; you grow your revenue or you look bad. This is one reason why Amazon, with its razor-thin profits, has stock price increases on growing revenue, while Apple, with its massive profits but slowing revenue, has seen a marked decline in its stock price.

The low price of ebooks makes revenue shrink if volume does not increase to make up the deficit. Unfortunately for the publishers, ebooks gained market share no matter what pricing model was used by retailers. Fortunately for publishers, eventually there should be be a leveling off of ebook growth and a return to revenue growth.

Ebooks are a disruptive technology, so publishers must adjust their strategies. If they expect to keep "business as usual," then that will be what kills them, not ebooks.

Re: The law.

"There's a law against forming a cartel to conspire to fix prices"

Correct.

"But you have to prove actual conspiracy to make that case."

Not correct. If this were a criminal trial, you'd be correct, but since this is a civil trial, proof is not necessary. The DoJ simply needs to show a preponderance of evidence of a conspiracy.

Basically the DoJ is simply going to attempt to show that all these coincidences of every named publisher switching to a new pricing model at the same time could not be a coincidence. It is going to stack all its points like a deck of cards and hope that deck eventually topples.

Personally, I don't see why Apple doesn't settle. The publishers have settled, which means that even if Apple wins it can't go back to agency with those publishers, as they agreed not to do so for a period of time. If Apple loses, it could see massive damages, as it could liable for the total of itself and all publishers.

Too much risk and little reward.

Re: AsI posted yesterday in another story:

"But I guess nobody here bothered to read it. Ironically the key line is sandwiched between their highlighted quotes:

So even before Apple got on the scene, some booksellers were starting to withhold books from Amazon."

The booksellers were windowing some eBooks, which is a common practice when it comes to different formats of media (DVDs well after the movie, TV well after the DVD, Audiobooks after the print). There is no evidence the publishers colluded to introduce windowing, which is a common practice.

"Essentially, the publishers realized they were being bled dry by Amazon and were looking for a way out. Jobs gave it to them. This suit is Bezos or his buddies trying to get even, and because the publishers already been bled out so much they didn't have the cash necessary to defend themselves from an intense government onslaught."

This is your best laugher yet. The publishers were making MORE money under the wholesale agreement than they were under the agency agreements. Amazon was paying them a wholesale price above the sale price, and because the retail price was lower, the books likely sold more copies. If anyone bled the publishers dry, they did it to themselves.