back to article Apple fights off ebook suit with anti-Amazon defence

Apple is a liberator, not an oppressor – that’s according to Apple, at least. The Mac-maker turned device-and-content shop has dismissed the US government’s decision to prosecute on the grounds that it rigged ebook prices by claiming the iBookstore has freed consumers and publishers from the tyranny of Amazon. According to …

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  1. big_D Silver badge
    Facepalm

    Monopoly or innovation...

    Would I prefer a $9 monopoly or a $14 innovation of the same book?

    Oooh, tough one!

  2. Anonymous Coward
    Anonymous Coward

    "Apple is a liberator, not an oppressor"

    Yeh right, the content lock-in to iTunes, they are BOTH as bad as each other.

    Both of them intent to harm consumer choice by locking in users because of previous purchases.

    1. P Zero
      Meh

      Re: "Apple is a liberator, not an oppressor"

      At least one can be used in a variety of devices. It's not much of a distinction, but it is one all the same.

    2. Giles Jones Gold badge

      Re: "Apple is a liberator, not an oppressor"

      Nobody is going to publish their works to a store where it can be easily copied. DRM is mandated by the media creators.

      1. Arthur Dent
        FAIL

        Re: "Apple is a liberator, not an oppressor"

        Giles Jones : "Nobody is going to publish their works to a store where it can be easily copied. DRM is mandated by the media creators."

        I guess you've never heard of Baen Books, then?

  3. dogged
    Thumb Down

    Mitt Romney?

    Please. Let's not indulge in this kind of foolishness. Your suggestion makes as much sense as "President Dukakis".

  4. Anonymous Coward
    Anonymous Coward

    For an interesting insider's view (i.e. one from an author), i'd recomnmend reading this: http://www.antipope.org/charlie/blog-static/2012/04/understanding-amazons-strategy.html

    Though I'm no particular fan of Apple, I'm even less a fan of Amazon's tactics, and stopped buying books from them long ago. I'd rather pay a fair price for a book, thus enabling authors (and their publishers) to continue writing, than pay a dirt cheap price which eventually makes it uneconomical for them to do so.

    1. Wyrdness

      Excellent article by geek-turned-author Charlie Stross. Well worth a read to gain an understanding of the broader context.

    2. Keep Refrigerated
      Angel

      Thanks for the link...

      Insightful reading, but it makes it sound as though Amazon was really just the facilitator to the greed and fear of the big 6 publishers.

      But publishers aren't software companies. They just want to sell books. And so they outsourced the DRM to the ebook resellers. Including Amazon...

      For AMZN, the big six insistence on DRM on ebooks was a windfall: it made the huge investment in the Kindle platform worthwhile, and by 2010 Amazon had come close to an 85% market share in the ebook sector...

      So the publishers insisted on DRM - but forced the resellers (including Amazon) to implement it. When Amazon did, having the largest share of the eBook market effectively reverse locked-in the publishers (just as customers are locked-in).

      Hoisted by their own petard it seems. Still it's nice to know that publishers suffer from own their stupid insistence on DRM as well as their customers.

      Let's hope Stross is right and they see the error of their ways.

      1. LOL123
        Thumb Down

        Re: Thanks for the link...

        While his comment about no DRM is great, I don't buy the article.

        "the internet is an intrinsically disruptive force in traditional distribution channels because it makes disintermediation very easy."

        "the publishers handed Amazon a monopoly on their customers—and thereby empowered a predatory monopsony."

        With Amazon's monopsony and monopoly, they still got Amazon to switch to the agency model? And hike prices up? Why did Amazon agree with all their market distorting power?

        Actions speak louder than words. Publishers, why not just go direct. The internet makes disintermediation very easy right?

        They all got together to choose a minimum retail price, but can't get together to sell direct?

        There are three DRM schemes - Adobe, Kindle and Apple as far as I am aware in eBooks.

        Just use Adobe and cover the largest market - everyone except the Kindle. If Amazon wrings the publishers hands for exclusivity, that would be very illegal, and a slam-dunk antitrust case for the DOJ.

        It seems to be more about the fear of Amazon's success, and also related to some distrust of Jeff Bezos.

        Sorry but still smells a lot like greed.

  5. Alan Denman

    The Great Dictator

    Well said indeed.

  6. Rab Sssss
    Facepalm

    huh?

    I thought they got in hot water because of price fixing in collusion with the publishers, ie fuck all to do with apples ebook market share.

  7. Anonymous Coward
    Anonymous Coward

    Hmmm

    OK, "Apple's eBook monopoly". According to your own market stats, they hold less than 10% of the market. You say that Apple has 100% of the iPad eBook market. Really, last I looked you can install Amazon's and BN's ebook reading apps just fine. In fact, there are lots of readers for ebooks in the App store.

    "The same cannot be said for Apple, a company with a track record of building expensive hardware, delivering closed systems, and of signing a deal that favour suppliers and hurt consumers and the competition by pushing up prices."

    Expensive: show me a tablet with equal specs but a lower price tag.... oh, right, doesn't exist. Delivering closed systems: because Amazon can't sell their books for the iPad... no, wait, they do. Signing deals that favour suppliers and hurt consumers: such as when they made sure, against the industry's wishes, to sell music for one dollar a pop. Or tv shows. Or Apps. Remember how much you's have to pay for a Java or Windows Mobile Solitaire game before the App store? $20. That's right, of course consumers were rejoicing! Given the dismal failure of the iTunes music and app store, it seems clear that the market has spoken /sarcasm.

    Your analogy of Amazon being the internet's Walmart is quite correct, but not in the way you intended. Amazon's stranglehold over publishers has been broken, temporarily it seems. If the DOJ should succeed, you can kiss any promising new author that won't sell a million copies with a debut novel goodbye.

    1. John McCallum
      Meh

      Re: Hmmm

      "If the DOJ should succeed, you can kiss any promising new author that won't sell a million copies with a debut novel goodbye" Bullshite all they have to do is offer it to one of the smaller publishing houses,ok they wont make their name overnight but if it is any good they will make a living.

      1. James Anderson

        Re: Hmmm

        Amazon actively supports lone. Authors and has a helpful easy to use system to allow authors to upload their books and sell them for whatever price they choose, including free.

  8. Anonymous Coward
    Anonymous Coward

    Apple needs a hammering

    The fact is the anti-trust bit is not about whether Amazon has a dominant position, its more the fact that Apple colluded with the publishers to fix prices across the WHOLE market! This would also affect any other new players trying to enter the market like Kobo, let alone Amazon. I already refuse to buy any ebooks where Amazon have put 'the price is set by the publisher' because I now know that those are the books governed by this agreement. This price fixing was a desperate measure by the publishers to try and stop the natural fall in prices now that most books are electronic.

    I do however think that all players in the market should be forced to change their devices to accept all standard ebook formats including .PUB, that way you could have a Kindle but still buy books from any other store.

    1. toadwarrior

      Re: Apple needs a hammering

      Exactly, who cares if amazon shafts authors. We just want them to drive prices way down with the wal-martisation of ebooks through their monoply.

      1. Glostermeteor

        Re: Apple needs a hammering

        It's not about shafting authors, it's about cutting out the middle men that just make books more expensive. If the authors want to make more money they should self-publish direct with the likes of Amazon, that way they get a much bigger percentage of the sale price and the consumer gets a cheaper deal. Its exactly like record companies for music, they are becoming very redundant and just an expensive go-between that can be cut away.

      2. quarky

        Re: Apple needs a hammering

        What?

        Previously: Amazon buy the product at an agreed price from the publishers. Any discounting done by Amazon reduces their profits, and reduces the costs to the consumer. = more books sold.

        Now: Amazon buy the product at the agreed price from the publishers, and must sell the product at the price agreed with the publisher. Increased cost passed to consumer = less books sold.

    2. Anonymous Coward
      Anonymous Coward

      Re: Apple needs a hammering

      "I do however think that all players in the market should be forced to change their devices to accept all standard ebook formats including .PUB, that way you could have a Kindle but still buy books from any other store."

      To be fair there are a number of converters out there that do a good job, I favour calibre, only because I have built a central library of ebooks on a NAS that get farmed out to different devices in the house. (ie I have a folder named the same as the book and in that is a number of different formats to choose from depending on the device being used, including Kindle's EZW).

      I do agree though that mass-market audiences aren't going to be doing what I do, they just want it too work.

    3. David Kelly 2

      Re: Apple needs a hammering

      Have not seen the claimed "... fact that Apple colluded with the publishers to fix prices across the WHOLE market!"

      Apple was not previously selling eBooks. Went to publishers and offered the Agency Model where the publisher could set any selling price in iTMS they desired on condition that Apple take 30% of sales and that no one else pays less than the remaining 70%. in no way does Apple force Amazon into the same Agency Model. But perhaps the publishers went back to Amazon stating they got a better deal from Apple and no longer needed Amazon? Possibly then the publishers are guilty, but not Apple.

      1. Dr. Mouse Silver badge

        Re: Apple needs a hammering

        "Went to publishers and offered the Agency Model where the publisher could set any selling price in iTMS they desired on condition that Apple take 30% of sales and that no one else pays less than the remaining 70%."

        AFAIK it was actually "noone else can sell at a lower price".

        I may be wrong, but that's the gist I got from the Most Favoured Nation clause: Noone else is allowed to sell cheaper than Apple.

  9. g e
    Unhappy

    Mitt Romney, Business Friendly

    Yeah I wonder if that might turn out to be Northrop Grumman, Raytheon, Massive Dynamic General Dynamics and their warmongering pals?

  10. Desk Jockey

    Distribution monopoly

    Apple established a distribution monoply (ipad coupled with itunes) and then tried to get all the publishers to set a common price. Amazon set up various distribution points (kindle, phones, ipad, PC readers etc) which only relied on having a legitimate Amazon account to purchase from any sellor you wanted in their store and then Amazon tried to establish a decent market share by undercutting the competition by selling their stocks of ebooks at almost to no profit.

    Dislike Apple or Amazon all you want, one of these tactics (if proven) was illegal, the other was not. They are both very predatory and they are both very good at integrating their products/services. They still need to play within the rules.

    1. Franklin

      Re: Distribution monopoly

      "Apple established a distribution monoply (ipad coupled with itunes)..."

      Actually, iPad plus iTunes is neither a lock-in nor a distribution monopoly. I can read iTunes, Kindle, Nook, and generic .pub and .epub books on my iPad, as it turns out. So I'm not sure how "buying an iPad" == "being locked in to a distribution monopoly." In fact, I have more Kindle books than iTunes books on my iPad.

      "...and then tried to get all the publishers to set a common price."

      Is that true? I don't think it is. My understanding was that Apple told the publishers "You can set the price for your eBooks," whereas Amazon tells the publishers "You can't set your price for eBooks; we will determine what the price is."

      This parallels the way their respective app stores work--with the Apple app store, the app developers sets the sale price, whereas on the Amazon Android app store, the developer sets a "suggested" price but Amazon can change that price if they like.

      It seems to me that what this is all about isn't device lock-in (the iPad does not limit you to only the Apple book store) so much as who sets the price for eBooks, the book publisher or the book seller.

      "Amazon set up various distribution points (kindle, phones, ipad, PC readers etc) which only relied on having a legitimate Amazon account to purchase from any sellor you wanted in their store and then Amazon tried to establish a decent market share by undercutting the competition by selling their stocks of ebooks at almost to no profit."

      Partly. Partly, Amazon also tried to get their eBook suppliers to cut THEIR prices to almost no profit, too, which is why some smaller publishers have stopped selling eBooks through Amazon.

      Amazon says that the traditional model of book publishing is broken; that publishers need to accept the reality that book prices will drop. On the one hand, I see their point. Publishers certainly have lower expenses with eBooks, that's for sure. On the other hand, my feeling is that the person who really gets shafted by the downward pressure on prices is the author, and discouraging authors is not a good way to serve the interest of readers.

  11. Anonymous Coward
    Anonymous Coward

    "Apple is a liberator, not an oppressor – that’s according to Apple."

    "Nuclear power stations are like stars that shine all day long! We shall sow them all over the land. They are perfectly safe!" Russian academician M.A. Styrikovich - Six years before Chernobyl.

    History has the ability to filter out bull$#%^ over time. Time will tell just how wonderfully liberating Apple is.

    1. g e
      Joke

      Not forgetting

      IP Lawyers love kittens!

  12. fLaMePrOoF
    Flame

    "Since then customers have benefited from ebooks that are more..." EXPENSIVE.

    Fuck you Apple, I don't want the novels I buy to be fucking 'interactive' (and all priced at a minimum $9.99), I just want them to be as decent value as possible, which is why I only have Kindle and Google Books on my Android phone.

    Apple's definition of a monopoly = success in any market sector by anybody but them.

    Fucking greedy arrogant hypocritical twats.

  13. Anonymous Coward
    Anonymous Coward

    Apple dominant where?

    Quote: "While Apple’s share of the ebooks market is smaller than that of Amazon, its reader device – the iPad – is dominant."

    You mean Apple is dominant in the iPad market? Or the tablet market? Either way, this seems an irrelevant statistic. If eBooks are at the heart of the problem, the statistic that matters should relate to any devices that are used to read eBooks, e.g. eReaders, phones, laptops, desktops, tablets, etc. What percentage of all these devices are Apple devices? 10-15% perhaps? Probably similar to its share of the eBook market - in other words, far from dominant. It's a figure that would be attractive to publishers, but they wouldn't suffer if they told Apple exactly where it could shove its offer.

    This whole case is strange. The eBook market is far from established, with participants, marketing strategies, devices, and formats in a state of flux. Why is the DoJ suing at this early stage, and why are they targeting a company with such a low (and only recently gained) share of the market?

  14. wmesard

    "Democrat president"

    The adjective is "Democratic". If you tuned away from Fox News once in a while, you'd know that.

    http://en.wikipedia.org/wiki/Democrat_Party_%28phrase%29

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      1. This post has been deleted by its author

  15. Charles-A Rovira

    Typical Apple. They're the wealthiest corporation in the world because they don't do stupid things.

    Apple simply is not a monopolist in the book market because it does NOT publish any books. It is also NOT a monopolist by virtue of Amazon's dominance in the e-pub marketplace.

    Apple never comes to the marketplace FIRST.

    It learn from the mistakes of those already there, creates a better user experience and then slaughters the competition without even looking at the bottom line.

    The iPod...

    The iTunes Music Store...

    The MacBookPro...

    The iPad...

    The iCloud...

    It waited until the market place was clearly being run by people too stupid to understand that their products are too hard for consumers to use, and then...

    1. LOL123
      Paris Hilton

      Re:They're the wealthiest corporation in the world because they don't do stupid things.

      Oh good you put iTunes *Music Store*

      For a second, I thought you were actually going to put in iTunes as a shining beacon of Apple magic.

      I still waiting for Apple to learn on that one.. It's been four years now..

      iTunes Match OK.. iCloud? Really?

      You're joking right??

  16. jr424242

    Publishers, not Apple, constitute the monopoly

    The publishers, when colluding on price, amount to a monopoly; had they worked independently, there would have been no issue. Apple, as the vehicle for or instigator of that collusion, has an auxiliary role; still, leading others to collude illegally is not legal, either. Nevertheless, I expect the worst that happens to Apple is they lose several million dollars the right to enforce the "most-favored-nation" clauses in their contracts with publishers. However, it maybe that publishers are forbidden from using agency models, which kills Apple's bookstore business model.

  17. naive

    Compare apples with pears

    It is really peculiar how defacto monopolies like MS and Apple are compared to Amazon. We are now maybe just ending a 20 yr long era where from every $ spent on IT 90 cents went to the WIntel empire, that was only besieged by a very tiny army of Linux users who liked to have a choice.

    In those 20 yrs Amazon built a solid and very customer friendly business, opening up the US book market to the rest of the world. They came with real innovations like a sub $ 200,- reader, that could also be used to read PDF's that can actually be uploaded using some Science Fiction device, unknown to users of a certain $500 tablet, like USB !!!.

    These are real innovations to the world, that are not jails in which users are forced to pay up for ever.

    Of course Amazon is predatory, that is how it works out there, eat or get eaten.

    But unlike technical standards, which are protected by patents, retails models are much less suitable to lock in users. It is therefore unclear how Amazon can be compared to something that M$ was and Apple wants to be in future... Vampires that suck dry users and lock them using all kinds of patented DRM protection, including e-book standards.

  18. Jason Hindle

    Hmmmm...... Doesn't feel like a monopoly....

    On my iOS devices, I can read purchased books I can still download from my old Peanut Press account (ereader.com these days), my Amazon account and of course Apple iBooks. I can often buy the same book using any of those accounts (though I have a preference for Kindle these days). Maybe someone needs to hit me hard on the head with it but I'm not seeing a monopoly on Apple's part. Apple gives fair and optional access to their publishing infrastructure and if you want to take payment via that infrastructure, Apple take their percentage.

    If iBooks were the only game in town and Apple were laughing at the rotting corpses of the alternatives OTOH.....

    1. NBCanuck
      WTF?

      Re: Hmmmm...... Doesn't feel like a monopoly....

      So if you buy an ebook online (say...Amazon) you can access that book on any number of devices, including iPads...and have the freedom to change devices and keep access to your books.

      If you by the same book through Apple, can it be used on a number of different devices, or do you lose access if you stop using the iPad?

  19. PAW

    why is this happeneing?

    Why has a price fixing charge against an oligarchy of Publishers turned into an Amazon bash fest?

    People seem afraid that Amazon will either drive out content with low prices or use predatory pricing now only to raise prices later. Instead of future fantasy, what about the present reality where the price of electronic books is already too high and paper is out of reach (for a middle class guy like me). Libraries are being defunded across the country.

    What's the reality that Amazon is a monopsony ( Publishers must sell to Amazon) in the age of the Internet? Publishers can't create their own retail websites?

    And this article - implying that anti-competition prosecution is ineffectual because the Microsoft breakup order was reversed on appeal. Com' on. Apples and oranges.

  20. peter_dtm
    FAIL

    Bean there - done that

    don't understand why Apple is the target - its the greedy publishers who seem to think they should charge the same for an eBook as a real paper book - cretins. Amazon are also guilty of artificially maintaining high prices in a monopoly - why the hell are ebooks on amazon so bloody expensive ?

    Me - I buy my ebooks from Baen (baen,com) - who also GIVE a lot of ebooks away. The books are MINE (unlike amazon who only licence their (if they had their way) propriety single system. At Baen I download CHEAP ebooks in what ever format I want - even going back a couple of years later to download on to the work laptop when out of the country -- oh and with calibre on top I can change them to just about any other format too.

    Reading device : iPad/iPhone/PC (ugh !) / Android phone. I have a couple of FREE books from iTunes and I refuse point blank to pay Amazon's rip off prices. Oh; and; I could even print them out if I felt like it.

    iPhone/iPad have apps that read/display ANY ebook format :: how the hell is Apple (in this case) even remotely guilty of ebook monopoly - Amazon however is most definitely infringing by trying to make you stay on a kindle and reserving the right to take YOUR book off YOUR Reader without YOUR permission; Apple can't do that to me ...

  21. Marshalltown
    Devil

    Paper

    Happily, I prefer paper. So until it passes away into the uttermost west, e-books are moot as far as I am concerned.

  22. Joe Gurman

    Can't have it both ways

    After reporting that, "Amazon was reported to have had 90 per cent of ebooks in 2009 but that's now fallen to 60 per cent. Barnes & Nobel's share is between 25 and 30 per cent now, with Apple grabbing the rest,' the article sketches a scenario in which, "[I]t will matter more to Apple as a matter of honour whether, like Microsoft, it wants to go down in history as a convicted monopolist."

    Question, m'lord: How can anyone with between 10 and 15% of a market be convicted as a monopolist?

    1. Richard 12 Silver badge

      Re: Can't have it both ways

      They are accused of abusing the near-monopoly they have on tablets to gain their current position and profit margin in the eBook market.

      It would be fundamentally stupid to wait until a company have actually gained a second monopoly by abusive methods, that's how IE6 happened.

      The abusive methods must be challenged in the courts before irreparable damage can be done, swhich means going after them when they start tto use them, not dependent on results.

  23. Darren2k10

    Monopsony, Amazon, Books, Ebooks and Electricals

    There are very few times when I side with Apple in something, but here I must, albeit I am siding with their effect on Amazon, rather than their own intent to secure yet another win-win for their untouchable fondleslaboratories.

    Every single person who has read these articles/stories and thinks "it's good that amazon is driving our prices down for us"... makes me want to ask them if they are naive, or just plain stupid.

    Let's change the subject from Books to Food. Everyone wants the best food prices.. so say if we were able to force our local farmers to produce goods and sell them to us at half of their actual cost, we would be so so happy that the price has "finally come down to the right place"... er- that is until the farmer quits as he cannot afford to make a loss, and all of a sudden there is no food to go around.

    Quite where this expectation of false pricing comes from is beyond me, Amazon definately have a large hand in it, and every program from "Don't get done get dom" to the local tabloids push the idea that consumers are being screwed left right and centre by businesses who are living it up. True, the government gets screwed left right and centre by the big corps, capita et al, for massive investments that never see the light of day - but the vast majority of companies that keep the country afloat, are barely making ends meet, and yet customers still don't realise that they are essentially spoilt brats, in an environment that can no longer tolerate such actions.

    It is the consumers, that need to take responsibility, and stop asking for "lower lower", or one day, quite soon - there will be no one to ask to lower the prices.

    Apart from maybe Amazon, and when they're the only business in town - they're not exactly going to agree. Let's see in that situation how amenable their A-Z Guarantee becomes.

    1. thesykes

      Re: Monopsony, Amazon, Books, Ebooks and Electricals

      Books and food... what a stupid analogy. Potatoes - finite supply... ebooks not finite.

      Back in the dark ages, when monks had to hand-write every manuscript, you could compare the two.

      However, if I write a book and it is published, it is written once. I can then sell it tens of millions of times without any more effort on my part. In fact, the only party having to pay out anything in the selling process is the final seller, be it Amazon or any other ebook retailer.

      Ebooks incur fixed costs at the start, editing, proof-reading, typesetting etc. Once they're published as a file on a server, that's it.

      If you're not convinced, how about this. A book which was published in 2001 and made its author a multi-millionaire. It has obviously been sitting on a server in digital format since 2001, probably before, and in order to create en eBook all someone had to do was press a few buttons (it can't be that difficult to create one, can it?). As it was publsihed so long ago, no editing was required, no proof-reading, no actual work by anybody. That book is now for sale in eBook format for £4.99, 3p more than the paperback version on Amazon. The eBook is not available on Amazon, you have to go to it's own special site in order to download it. The book is the first Harry Potter story. Now, explain why the publishers feel the need to charge more for that than the physical edition? The anser is pure and simple greed.

      1. Darren2k10

        Re: Monopsony, Amazon, Books, Ebooks and Electricals

        The main point I was making which has been sadly lost, is not the greed of book publishers to charge £4.99 for a book that is over 10 years old (or £40 for a book that is over 2,000 years old... though this still happens) - the issue is that Amazon had superficially decreased the price of books to the consumers, below their value. Sure, for the massive publishers it makes no difference that they can sell an old book at what someone would consider a high price - however, it is their work to do so with as they wish. You, as a consumer have the choice to not buy the item.

        It is the smaller companies, who do not even get involved in the industry, or try to and don't succeed - due to the lack of any perceivable profits, except for the large companies.

        This issue applies more now than ever to the Electricals industry, where Amazon has yet again done the same thing, and superficially pushed prices down below their value, creating a false economy for electrical goods - and in so doing kill an entire market for small businesses hoping to start up in the technology sector. This is only bad news for an economy, as why should someone invest their time and risk into an industry when there is nothing to be gained?

        Going back to the food analogy here - no food.

  24. Tekkie
    WTF?

    And the difference to music... is what?

    "Just as we’ve allowed developers to set prices on the App Store, publishers set prices on the iBookstore."

    Can someone explain to me how Apple will be able to defend the above when Apple sets the price for music in the iTunes store? How are music and books different?

    Perhaps its the 'market share' in digital music just like Amazon has in books that does the trick for Apple?

  25. Anonymous Coward
    Anonymous Coward

    DoJ will need to prove collusion actually occurred

    ......3 publishers paid up, surely thats proof enough!

  26. Tom 13

    Major Nit: "...Microsoft was sunk..."

    MS was NEVER "sunk" which is why those who are still around from the time of the fight reflexively spit whenever someone claims they were. It is also a major contributor to it's well earned nicknames: M$ and Microshaft.

    On the Apple front, I think they win because the DoJ needs to prove actual collusion, not just market dominance or changes in pricing. So far as I have seen, even in the smears against Apple, their behavior doesn't rise to collusion. And I'm no fanboi. The only hardware I have ever purchased from Apple was a refurb iPod from Woot.

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