back to article Dead STEVE JOBS was a CROOK – judge

A US judge has found Apple guilty of conspiring with major publishers to fix the price of ebooks and has called for a trial on damages. District Judge Denise Cote stayed true to her initial impressions of the case, and ruled that Apple had colluded with Macmillan, Hachette, Penguin, HarperCollins and Simon & Schuster on …

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Anonymous Coward

Re: Loudmouth Judge

It was surely just a statement of fact. You assume a Judge has the ability to base a decision upon the facts presented and at that stage - assuming you quote correctly -felt that Apple looked guilty. Therefore there was a case to answer and the trial should go ahead.

If, based on the evidence seen at that stage (presented by the DoJ) Apple seemed innocent there might not have been a trial at all as the Judge could've halted it.

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Re: Loudmouth Judge

It's not a jury trial so the judge can talk about where things stand.

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FAIL

Re: Loudmouth Judge

Thats the point Don. The judge was tasked with establishing if there is guilt and therefore reason to go to trial for damages. There was, and it will.

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Trollface

Re: Loudmouth Judge

"Regardless of guilt, Apple have a solid grounds for appeal"

The unfailing advice of a lawyer, most of the time, even though half of them lose, most of the time.

Heads they win, tails you lose. Never thought I'd support lawyers' money-grabbing ways, but for Apple, I wish them ever last penny they can screw out of the wormy fruit.

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"half of them lose, most of the time."

60% of the time it works, every time.

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FAIL

Did Apple Hire 6-Year-Olds for Lawyers!?

...the remedy for [Amazon's alleged] illegal conduct is a complaint lodged with the proper law enforcement offices or a civil suit or both.

Translation: Don't take the law into your own hands/two wrongs don't make a right.

"Another company’s alleged violation of antitrust laws is not an excuse for engaging in your own violations of law. Nor is suspicion that that may be occurring a defence to the claims litigated at this trial."

Translation: Just because the other kids are doing it doesn't mean you should do it too.

Seriously, Apple's lawyers should be disbarred for attempting a defense that was thoroughly refuted in elementary school.

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Re: Did Apple Hire 6-Year-Olds for Lawyers!?

Quite. And they were also clearly hoping no-one would notice the ellision: "But Amazon engaged in anticompetitive practice in order to force prices down, so why shouldn't we engage in anticompetitive practice in order to force prices up?"

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Anonymous Coward

Once Samsung have crushed Apple then I'm sure we'll have the Samsung Galaxy Cider edition just for fun. They'll ensure it has the most roundiest corners on any smartphone.

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Happy

"They'll ensure it has the most roundiest corners on any smartphone."

Hmm. It's wild, it's stupidly expensive and it's form factor would be completely bonkers and yet maybe...

Yes folks I'm talking a circular mobile phone. with circular UI to go with it. Say about 31/2" in diameter.

I have seen the future and it's round!*

*One of an infinity of possible futures that might possibly arrive. No promises are made or implied. Standard T&Cs apply.

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I think the judge made a salient point about Apple's "argument" of breaking Amazon's monopoly. If Amazon was leveraging its monopoly power, why didn't they charge Amazon with dumping (which IS considered an unfair trade practice--using loss leading to undercut new competition)?

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Anonymous Coward

There was no evidence they were using loss leading to undercut competition. The term loss leading is also common and legal business practice. You use a loss on one product to get buyers in your store with the hope that they will also buy other items. This allows you to make up on the loss from the loss leader by selling other items.

The suggestion is that Amazon was taking a loss on their ebook sales to promote their ereaders. This is only anti competitive if you consider them a monopoly. In which case you would consider that they were leveraging their monopoly in the eBook market, not just to promote their tablets, but to generate a monopoly in the tablet marker. This is explicitly what anti trust laws are supposed to prevent. But there is no suggestion that this is the case, since no one can sensibly suggest that it was aimed at developing a monopoly in the tablet market.

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I'd imagine it's also hard work to lose money on an ebook.

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It's actually quite easy, you pay 10 dollars a copy to the publisher and you sell it for 8.50 and, congratulations, you made your loss

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Loss leaders - @Anon 17:22

Amazon had a 90% share of the e-book market before pricing was changed to agency model. Most would argue 90% is well over the threshold for a monopoly.

Amazon priced that way to keep competitors out of the e-reader market, and they were succeeding quite well in doing so. If the iPad had flopped, there still might not be a tablet market and they'd have successfully maintained their monopoly in e-books.

The tragedy in this is that while what Apple induced the book publishers to do was illegal, so was what Amazon was doing. It is fortunate that now that there's a tablet market Amazon doesn't have as large a share of the digital book market, though if Amazon goes back to selling e-books at a loss as they were doing before they may regain and enhance their former monopoly. After all, there's a Kindle App available for iOS and Android, so anyone with a tablet who wants to use it to read books (which they suck for, IMHO, but YMMV) would probably buy from Amazon if they're going to buy very many, to save money.

If Apple's book sales become so low isn't worth doing, and they shut it down, and other competitors do the same, Amazon will be free to raise prices back up and make up for the losses they took and then some. No one would spring up to take them on, because they would know after they spent a bunch of money to start up an e-book store, Amazon would start selling a loss until they went under.

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Anonymous Coward

Because,

The next stop on the anti-trust bandwagon could be Amazon? Lawyers have to earn a living too. And it is nice when the consumer benefits for a change.

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The argument is one based on the rule of law. As mentioned above, this is a lesson that is repeatedly attempted to be taught, on both sides of the large pond, in grade school. It is a reflection on our societies' failures that such menial lessons so often don't seem to have been integrated into the student's worldview. As with most lessons of this type, the penalties for failing to learn (and consistently flaunting that failure in front of others) can be severe. It would be far more economical to concentrate on the proper teaching, rather than the correcting. If only there weren't so many spectacular successes arising from just such asocial behavior . . .

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"Amazon will be free to raise prices back up"

But this is the fascinating thing about Amazon: they don't do that. They locate inefficiencies in a market, use their muscle to get rid of those inefficiencies (which necessarily causes problems for competitors who can't or won't become as efficient as Amazon), and that's it. The traditional final stage of monopolistic behaviour -- pushing prices back up again once you've got a monopoly -- appears not to interest them. Find us an example of a product whose price Amazon has increased after driving out the competition. I bet you can't.

The corporate ethos appears to be that everyone benefits from a more efficient market, so make it more efficient and leave it that way. Look at Netflix: they're in direct competition with Amazon's LoveFilm, yet they use Amazon's AWS. Amazon are in a perfect position to cause serious problems for Netflix, yet they don't.

The very reason we have anti-monopoly laws is to protect consumers from monopolies forcing prices up. Since Amazon don't do that, what exactly is that you think the law should be protecting us poor Amazon customers from?

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Re: Loss leaders - @DougS

I'm not sure that it can be established that Amazon is doing anything illegal,* otherwise Apple and/or others would have started there, rather than do something that any sensible lawyer would have told them sailed very close to the wind. Amazon are, unfortunately,** sailing far enough from the wind to be unassailable from any legal point of view.

Had Apple and the book companies not had the "most favoured nation" clause, than this would not have come to court. That decision is what showed intent to distort the market unfairly, and this seems to be an inevitable decision on the part of the court.

* I assume by "illegal" you are suggesting that Amazon has been "dumping"? There is no evidence of that available, at least at the moment.

** I say "unfortunately" because it is never good in the long term for one company to have a massive share of the market in anything.*** Amazon has, so far, not used its weight to act contrary to the interests of the consumer, or, really, the producers (at least, no more than any other outlet would). Nonetheless, I'd prefer to see an effective competitor from somewhere, even though I do use Amazon for about half of my media (all types) purchases.

*** The logic of capitalism requires that monopolies are the end product in any market. It amuses me when people who claim to be "free-market" advocates talk about invoking anti-trust law, thus requiring state intervention!

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Re: "Amazon will be free to raise prices back up"

So you expect that Amazon will always be selling e-books for less than it costs them wholesale, in addition for selling the Kindle Fire for less than it costs to make? Not exactly a long term strategy for profitability, but then Amazon's ridiculous stock price has always been about hope that they'd raise their prices someday in the future and not keep making almost nothing. If you believe what you wrote you should be shorting AMZN heavily, because they'll never justify their high triple digit P/E if they never raise prices and thus never increase their profit margin.

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Anonymous Coward

Re: Loss leaders - @DougS

Common misunderstanding.

Anti trust laws do not exist to prevent monopolies. They are there to prevent a monopoly from leveraging his monopoly in one market to generate monopolies in another. This is not contrary to a belief in free markets, since free market, really means free of unfair practices.

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Re: Loss leaders - @Anon 17:22

Again, regardless of a perceived monopoly or otherwise, selling products as a loss leader is not illegal.

Conspiring with suppliers to fix prices (up or down) IS.

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Stop

Re: Loss leaders - @Anon 17:22

And then if Amazon raises the price enough it will be worthwhile for a competitor to (re)enter the market and provide competition. The price of data processing capacity is low enough that it would not be a significant barrier, and as long as Amazon was not colluding with the publishers to restrict competition, as Apple was found to do, that (or even the implicit threat of it) would act to constrain ebook prices.

Monopolies are not illegal as such. It is certain activities intended to create and maintain them that are.

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Happy

Common sense prevails

So the judge accurately told off Apple that "but they did it first!" is not a valid defense to engage in illegal activities. Vigilantism is frowned upon by the law, and even if Apple's argument were to be correct, it would amount to corporate vigilantism.

As the judge noted, if Apple or the publishers thought that Amazon was engaging in anticompetitive practices, they should've sued through the proper channels. Indeed, "Dumping" is frowned upon and there are usually laws against this practice. But that's why you sue, not commit a worse offense by price-fixing, which has an immediate anti-consumer effect, as opposed to the medium to long-term effect that dumping has on consumers.

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Re: Common sense prevails

Netscape tried that route and where are they now? At the time Apple supposedly fixed ebook pricing, Amazon only had 90% of the ebook market. The point Apple was trying to get across but failed was that the government was not doing its job. But no worries, it's a victory for consumers, as reported by The New York Times this weekend, now that there are basically no competitions for non-ebooks, Amazon is cutting back the discount they offer, victory indeed.

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Re: Common sense prevails

While there is a kernel of truth to the market dominance argument, several factors each independently criminalize Apple's actions and/or disprove their assertions.

1. If it is the government's sole responsibility to police the market (which it isn't, but no matter), then Apple could have lodged a complaint with the FTC about Amazon's practice. They did not.

2. As it isn't the government's sole responsibility, Apple could have sued Amazon for the practice. They did not.

(Both those points the judge made).

3. Apple could also have used the power of the marketplace to compete head-to-head with Amazon, e.g. by promoting more loss leaders in an effort to turn iTunes-for-books into the, err, iTunes-for-music. So Apple has demonstrated (through iTunes-for-music) that they understand very well the concept of creating a de facto monopoly for certain types of product.

4. Had Apple truly been worried about Amazon's dominance, they could have produced subsidized iPads or iPad Nano's to compete head-to-head with Kindle. But obviously Apple doesn't mind dominance as long as it doesn't interfere with their goal of making obscene amounts of money (e.g. iTunes).

5. The reason Apple hated Amazon's supposed monopoly on eBooks (as opposed to Apple's near-equivalent lever of dominance in music) was that -- particularly in 2010 -- the iPad was being sold as a one-size-fits-all solution with "amazing" battery life, "goes 10 hours without a charge", blah blah blah. The Kindle, on the other hand, goes weeks without a charge, has a better screen for reading books, etc. etc. etc. So the real issue was never who made money on eBooks as to how to steer the public to buy iPads for all their needs as opposed to iPad having to compete with Kindle for one segment of the potential-tablet-customer market.

6. The other reason for this attack is that Apple doesn't want any kind of traditional market forces working on the online media market. The agency model is therefore Apple's perfect business model: set whatever price the publisher likes like, no-one will undercut iTunes, and Apple gets 30% of whatever price you chose. They want a walled garden, and they want the fewest possible reason for people to even think about venturing out of the garden.

Executive summary: Apple is a scummy company, and pretty much always has been, and this isn't news.

Final note: the reason the judge's comments were so non-controversial was that Apple was the only defendant left standing: every other defendant had plead guilty, admitted fault and paid up.

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Re: Common sense prevails

As for vigilantism it's more like setting up a protection racket and making sure everybody has high prices so you can collect more.

Now Amazon might just use free apps to sell its Kindle and leave it at that.

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Re: Common sense prevails

Indeed. By attempting what could most charitably on Apple's part be labeled as "helpful correction" of the market, Apple was acting not, in fact, to benefit the market, or to remove the allegedly heavy thumb of Amazon on e-book transactions, but rather was simply looking to change the market enough to allow Apple to take a turn at skimming the cream from the consumer. Ideally, anti-trust laws exist and are enforced to protect the consumer; that they are not utilized this was often enough, or to seldom wholly ignore the repercussion to consumers entirely, is a different (but equally interesting) issue. Here, Apple had no right to declare their own image of how things should be done more righteous (as it were) than another, and has been found simply engaging in the same type of improper conduct they tried to use as an affirmatively defensive argument.

It will be interesting to read the arguments put forth in Apple's inevitable appeal. Even if the appeal is taken less for actual legal vindication than for leverage to settle without confession of liability (the usual impetus for appeals by businesses), I would think Apple would have to focus very sharply on the details of the actual deals entered into, and the details of the allegations against them, rather than broader arguments of markets as a whole or any submitted benefit to any consumers.

Just my two cents (and you get what you pay for).

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Re: Common sense prevails

@ Malcolm Weir

I think these are excellent points for discussion, particularly point 4 and 6, which rather go hand in hand. It appears, from Apple's conduct (as opposed to the arguments of Apple's subjective intentions), that Apple was more interested in ensuring a basic profit model, from which the consumer would derive no benefit and from which Apple (and its alleged co-conspirators) could obtain relief from prevailing market forces. Apple was not interested in true combat with those market forces, or their correction (to the extent Apple could argue that they those forces were manipulated and not truly purely free market), but rather with simply avoiding their effect by establishing a different market with the unpermitted help of others. This does not necessarily lead one to the conclusions of the "executive summary," but does explain why its arguments to the judge based on how it was really looking to do "good," and how a finding against it would harm the market were not accepted.

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Re: every other defendant had plead guilty, admitted fault and paid up.

Really? I thought they'd settled out of court, which means they did not plead guilty or admit fault. Is that wrong?

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Re: Common sense prevails

Malcolm Weir,

Very well said.

I'd love to say it amazes me that Apple thought that their forcing prices up might be perceived as essentially the same as Amazon's forcing prices down, but that argument does seem to have persuaded a lot of people, including a number of commenters here.

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Anonymous Coward

Re: Common sense prevails

"Apple supposedly fixed ebook pricing"

There is no supposedly about it, your beloved is a common crook!

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Re: Common sense prevails

Not only is he a common crook, he as been that way since the early 1970's when he was selling blue box phone phreaking devices.

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"The fruity firm"

...Used twice in the one article. Where do they get these journalists?

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for the second time this week....

old news?!

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Angel

""wonder if the Court decision is available to buy from the Apple Book Store""

Amazon are giving away copies for free

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Use the fines to prop up physical book publishers/sellers

Since ALL of the ebook people are deliberately trying to kill paper publishing; I believe that ALL of the potential fines should be used to keep PAPER publishing alive as they are the REAL VICTIMS of the price fixing.

In fact, lets add a tax on all of the bastards to help keep paper alive.

Really,folks...life is truly going to suck when there are no bookstores or books to fill them. Fuck ebooks/electronic publishing forever. It won't just be the books, gone will be the cover art & artists, graphics, type, typesetters, paper manufacturers, bookbinders, stores, knowledgable salespeople, the feel of a great book and smell of a real bookstore, etc.

Do you want to lose all of that for some souless collection of ascii characters in a file? That's no longer "Literature".

Do we REALLY want to be slaves to this "convenience" that can be recalled or 'revised" at will? Do we let the idiots rewrite history on a whim? Or Amazon recall 1984 or Fahrenheit 451 because our "Kings" say they are treasonous or "too upsetting" to the proles?

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Re: Use the fines to prop up physical book publishers/sellers

Yeah! Simon&Schuster, Harper Collins, Penguin etc. were all conspiring to kill themselves!

Nobody in the book publishing business likes books, because you have to print the suckers, transport them, remember not to leave them out in the rain, accept returns when the stinkers don't sell, pulp the returned stinkers, etc.

The rest of Dan's "argument" is identical to what people said about digital cameras killing photography, video/DVDs killing movie making, and probably about "gramophones" killing live performances. Everything about cover art, typesetting, graphics will survive, and thrive (in no small part because the added cost of extra bits for multi-color printing is trivial compared to the difference in cost of putting photos and graphics on paper).

And, yeah, sorry Dan, but "Hamlet" on a Kindle is still friggin' Hamlet. It doesn't cease to be literature because you don't like the format, just as Beethoven's 9th doesn't morph into pop music when you encode it as some soulless collection of bits in a (MP3) file.

I would much rather control a digital version which *I* can back up, duplicate, and have than a cheap paperback sitting on a shelf demonstrating that the bookbinders that Dan loves so much can do a really crappy cheap job, too. Books I love I'll always pay more for a hardcover, but why should I subsidize an inefficient "throwaway" technology?

The real problem is that no-one has, yet, come up with a better solution than the "shelf" for marketing the things.

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Re: Use the fines to prop up physical book publishers/sellers

I don't agree with this post, but I wholeheartedly agree with the sentiment. In point of fact, I personally would like (which no one cares about, quite rightfully, but which I will share anyway) both directions to flourish. I say without any consideration of the realities that either support or hinder the possibility. The point is, I want the convenience of e-books and electronic publishing when it is convenient to ME - at work, during some travel (when in trains, plains, and automobiles and access to luggage and their contents is restricted), and paper product when I am at leisure to truly appreciate it. I truly doubt I am alone in this. I fell in love early in life with the sensibility of the local bookstore and library, and the feel, smell and overall psychology of holding (and even OWNING) a physical, bound work of recorded thought. They both have their place, and I am loathe to be forced to choose between them. Progress is supposed to, under at least one definition, meet the desires of a society, whether those desires lead one forward or back. (Yes, progress can be made by returning to a desired prior state.) I therefore support both ends, and hope I can continue to enjoy the middle.

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Re: Use the fines to prop up physical book publishers/sellers

> I believe that ALL of the potential fines should be used to keep PAPER publishing alive as they are the REAL VICTIMS of the price fixing.

The victims of price-fixing are the consumers who pay the higher fixed prices, not the vendors who collect the money.

Apple colluded with publishers to push prices up. Not down. Do you really not see the difference there?

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Re: Use the fines to prop up physical book publishers/sellers @Dan Paul

Whilst I have some sympathy with your post (I love book shops, and I miss "real" libraries), I cannot entirely agree with you. Literature is literature is literature, regardless of the medium. No doubt there were people that claimed the only "real" way to read a book was on parchment that umpteen monks had slaved away on for years, and that this printing lark was devaluing the experience. However, it doesn't matter whether it is produced with ink-particles or electrons. The ideas are what matter.

Yes, there are issues surrounding the resilience of ebooks compared to dead-tree books. If there is an apocalypse, hopefully some of the dead-tree books will still be around to help the survivors at some point - it is interesting how many post-apocalypse stories have the wise man guarding the old library - whereas we cannot sensibly expect anyone two generations after whatever disaster to have any clue what the strange devices that do nothing were for. However, I'm not sure that is any reason to shore up the modern equivalent of buggy-whip manufacturers (also more likely to be useful, post-apocalypse, than cars).

Your argument that ebooks can be recalled by the publisher flies in the face of reality. Any book you think might be banned is available through less-offical channels somewhere, and if it isn't, it would be five minutes after news of a recall was published. I keep several local copies of every single ebook I have, and I an far from the only one. The other advantage of ebooks is that there are a lot of potential sources of samizdat print copies in the event that they are required.

TL:DR - you are over-reacting, I think.

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Devil

Re: Use the fines to prop up physical book publishers/sellers @Dan Paul

Sorry to all, As far as I am concerned "literature" requires printed media. REAL Books are the ultimate open source media. Once printed, they have no other compatibility issues, no batteries, no digital translation problems (not language), they are art on multiple levels and NO AMOUNT OF ARGUMENT WILL CONVINCE ME THAT EBOOKS HAVE ANY WORTH OR VALUE.

E Books are more disposable than toilet paper and that demeans what they contain.

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Re: Use the fines to prop up physical book publishers/sellers @Dan Paul

Actually, there still IS a compatibility issue with the printed word: LANGUAGE. I imagine the literacy boom of the 12th century wouldn't have turned out so well if there weren't people around able to translate all the Spanish books from Arabic to Latin. One nasty thing about the printed work: they're more difficult in that sense to convert.

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Stop

Re: Use the fines to prop up physical book publishers/sellers

Try a kindle. It's a revalation.

I love books. LOVE reading. Significant portion of every day spent doing so.

To say i'm 30, work in tech and have a love for gadgets I came very late to e-readers.

I fought the concept, love owning books, the feel, the smell everything.

Got a kindle paperwhite about 3 months ago and won't look back. It's brilliant. We must have somewhere in the order of 1000 books scattered around the place. More real estate given over in our bedroom to books than clothing.

Please explain to me how the IDENTICALLY COPIED AND PRESENTED text and images of all my favourite novels suddenly become tripe because i'm viewing them on the (absolutely PERFECT and totally fit-for-purpose) display of my kindle?

Even the "font" is the same. As is the layout,the pictures, diagrams and, most importantly, the content.

I still get lost in middle-earth, drawn in to the lives of Rand Al Thor and friends, absorbed totally in the universe of Shannara.

I still own all my paper books. Have I touched one since owning a kindle? Yes - To look something up in one of the many reference/text books we have for one of our hobbies (we keep exotic mammals/reptiles)

I'll continue to buy paper books, but at a much reduced rate. Any book that's destined to be taken about and read - kindle. I have thousands of books on my laptop, they could just as easily be on a 32gb pen drive and in my bag with me at all times.

More specialist things (ie the reference/text books) will probably always be in dead tree format only or first. (Beleive it or not the market for "Captive care of African Crested Porcupines" isn't huge!)

I could go on, the battery lasts for weeks and months without a charge even after heavy use, it's easier to hold on the bog and in the bath than any of the 1000 page chunk-of-wood that I was previously having to hold in the bath. It's easier to hold than the thinnest paperback. Comfortable, light, grippy surface. It's PERFECT for the one thing it was designed to do - display test.

I can only surmise that you commute to work on horseback, refuse to buy anything not hand made and have similarly spurned every advance made by mankind since the creation of widespread rail networks doomed the stagecoach industry, and that your daily excretions are carried away by a whippersnapper in rags every morning in a bucket to be sold to tanners.

You also do realize that the same publisher(s) responsible for the dead tree books also publish the ebooks? I'm pretty sure if they saw it as the death of their industry this wouldn't be happening.

Try a kindle,I promise you won't be excommunicated or tried as a witch.

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WTF?

Re: Use the fines to prop up physical book publishers/sellers @Dan Paul

You value having a physical book OVER the content in the book?

Erm.

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Re: Use the fines to prop up physical book publishers/sellers @Dan Paul

Well, provided it's in a language you understand, dead tree books are remarkably simple and require no external power or artificial illumination if used in daylight, so they're pretty good when you're away from civilization. They also handle getting wet better, so they're better for beach and poolside reading.

That said, in the balance of things, I prefer the compact e-reader to paper books, especially in traveling where weight and volume must be considered. I deal with the ownership issues by obtaining books from legal suppliers that don't lock their books too tightly.

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We know who Apple are...

....but 'Macmillan, Hachette, Penguin, HarperCollins and Simon & Schuster'

Have you ever tried tracking the ownership of these publishing companies? Not today, but at the time of the 'incident' in question in 2010. Example: About Macmillan from Wikipedia:

"Pearson acquired the Macmillan name in America in 1998, following its purchase of the Simon & Schuster educational and professional group (which included various Macmillan properties).[6] Holtzbrinck purchased it from them in 2001.[7] McGraw-Hill continues to market its pre-kindergarten through elementary school titles under its Macmillan/McGraw-Hill brand. U.S. operations of Georg von Holtzbrinck are now known as Macmillan."

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There's a lot to be said for a world where you look at the song or the book or the sandwich itself and decide if you want it or not, rather than attempt to seek out a better deal, or decide if you should get a completely different book because it's cheaper. For me, the iTunes Store, Lidl and TKMax are temples of serenity in an abusive world where both the product and the buying experience are polluted by "offers", "deals", bloat ware, bundling.

Many people share this need to focus on the object. Why else would they willingly enter Apple's "expensive " "walled garden", causing it to grow so immense?

Apple needed to launch iPad. At least this deal lasted long enough for that.

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Bottom line. Corporations don't *mind* unfair markets, when they are unfair to *their* benefit

But squeal like a little b**ch if they don't get the cream.

I think the judge called it right too.

I do hope the damages will be substantial.

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