Linked by Thom Holwerda on Fri 2nd Aug 2013 15:30 UTC
Apple
Apple Inc deserves a five-year ban from entering anti-competitive e-book distribution contracts and should end its business arrangements with five major publishers with which it conspired to raise e-book prices, federal and state regulators said on Friday.

The U.S. Department of Justice and 33 U.S. states and territories proposed those changes after U.S. District Judge Denise Cote in Manhattan last month found in a civil antitrust case that Apple played a "central role" in a conspiracy with the publishers to raise e-book prices.

The DoJ also requires that competitors such as Amazon and Barnes & Noble be allowed to include links to their own stores in their iOS applications, which Apple had prohibited.

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RE[5]: Everyone is wrong
by TM99 on Sun 4th Aug 2013 16:23 UTC in reply to "RE[4]: Everyone is wrong"
TM99
Member since:
2012-08-26

You still continue to be unable to provide any relevant proof that Amazon has or is currently putting other retailers of eBooks out of business. They are not. That is why I called your statement ludicrous.

I really wish you would read that article again on the Agency model more closely, because the questions you are asking of me and the points you are trying to debate with me are indeed covered there.

But I will reiterate if it helps.

No one can answer 'how long' only to acknowledge that under the wholesale model that Amazon follows, consumers pay less for the same eBook. That is good for consumers. Under the agency model and collusion practice that Apple & these publishers attempted to push through, consumers paid higher prices at all sources of purchase including Amazon. That is bad for consumers. If Apple and the other publishers are forced to stop these practices, because we all know Apple will not willingly settle this, then prices will return to their lower position, hopefully, and that is good for consumers.

As an Amazon customer you have already seen the results of the negotiating. This is how it has been done for almost a decade now with them with regards to the wholesale model. The publishers agree to this because while they may bitch that they are losing money, in fact they are not. It is simple math. If I sell volume x at a higher price at one location (iTunes store) but fewer buy because of the higher price, and if I sell volume x at a lower price at another location (Amazon) and more buy because of the lower price, not only does Amazon realize a profitable success but so does the publisher. They want more of the pie. Fair enough. But they allowed Apple to suggest a means to do this which is illegal. That is why they got their hands slapped.

I don't think you understand the wholesale model and what has occurred. Amazon negotiates a wholesale price with the publisher. The publisher can suggest that Amazon charge more for the book, but they can not force Amazon to do so. They are quite free to sell it below MSRP. Companies do this all the time. Have you bought computer parts at NewEgg or Tiger Direct? Did you pay MSRP for that 1TB hard drive on Black Friday? How about a new car deal from the car lot down the street? Are these companies putting other ones out of business? If so, is it done illegally? No, and here is why.

You are mixing concepts and that is why there seems to be a misunderstanding. From your Wiki link:

In economics, "dumping" is a kind of predatory pricing, especially in the context of international trade. It occurs when manufacturers export a product to another country at a price either below the price charged in its home market or below its cost of production.

Amazon does not create the eBooks. Therefore, they can not be 'dumping' them. Read the examples sited. Your other link is to predatory pricing. Some might attempt to argue that Amazon does that but they do not. They are engaged in price competition.

...price competition, which is where a company tries to distinguish its product or service from competing products on the basis of low price.

Amazon distinguishes themselves in their sale of eBooks by negotiating with publishers under the wholesale model so that they can sell eBooks at below MSRP for $9.99 or less. That is not dumping. That is not predatory. They do not have any sort of favored nation status exclusion which is exactly what Apple attempted to do here - Apple gets the better deal (as you quoted) in exchange for exclusivity to having that eBook ONLY at the iTunes store and not on Amazon. Amazon does not do that. They may sell the same eBook for less than Kobo, iTunes, GooglePlay Store, or B&N, but, they do not force or attempt to force publishers from making deals with those other stores. You may not like how they are competing, but the how is not illegal nor is it even unethical. For now, yes, it does provide us, the consumer, with lower prices for a product that already has a very high market up given its actual production costs.

Finally, though, you believe that I am making 'ad-hom static' as you call it but it is not. You are trying to base your argument that Amazon was the instigator of the lawsuit (which is factually wrong!) based on Apple's very, very recent appeals filing with the DoJ.

Please read the comments. There are a few intelligent and accurate responses. Just because Apple says so, does not make it so. The Supreme Court has already determined that settlements such as this by the DoJ are allowable and do not violate the due process of the companies involved. They have been found guilty of an illegal act. Due process was served in the trial. Apple is trying to argue that they are immune to such settlements. Forcing them to break an illegal contract is not a violation of due process. Their contracts are based, on court determined guilty illegal practices

Apple wanted to enter the eBook market. They did so illegally and prices across the board on eBooks rose because of their collusion and anti-competitive practices with their chosen publishers. You want to argue that Amazon is bad for the market and for consumers. Yet, Apple is the one who is now proven to have been something truly bad for the market and for consumers. I yet again ask you how do you rationally defend this? Can you deny that they broke the anti-trust laws? Can you deny that eBook prices have risen and remain high(even at Amazon) due to their illegal practices?

Snark all you want. I provided links. I will not hold your hand for you with regards to having a better foundation of economic understanding when reading those links. You may not intend this to be so, but you sound like a 'fan' who is trying to rationalize why Apple is not wrong and Amazon is. I have no great love for the corporation Amazon. Their warehouse anti-labor practices are atrocious and need seriously correcting. However, that is irrelevant to this case and this situation. Amazon is not wrong. The DoJ is not wrong. Apple is wrong.

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