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: Everyone is wrong
by TemporalBeing on Mon 5th Aug 2013 17:55 UTC in reply to "Everyone is wrong"
TemporalBeing
Member since:
2007-08-22

My comment title has become a kind of calming mantra to me, as I see it more and more all the time, at both individual and group levels and on all topics. It's strangely comforting to see wrongness as equilibrium rather than as conspiracy or "evil". Anyway:

Apple is wrong:
-Because Most Favored Nation clauses are scummy, lazy, and anticonsumer. (Usually.*)
-Because unrelated retaliations against parties that refuse to participate in their plans is patently unethical and illegal.
-Because the principles of neutrality should apply to natural monopolies (iPad) just as it should to legal ones (ISPs)
--Because they have no business deciding what other people's content business models should be, i.e., the right to forbid or to capitalize in-app content sales.
---Though allowing the likes of Amazon to give away a free app costs Apple money, which if Amazon then uses to compete against Apple for its own gain, is a very bad deal for Apple. But its current App Store terms of service is the wrong solution.


A pretty good list. But suffice it to say, Apple is wrong for one major reason: Price Fixing, which is not allowed monopoly or otherwise.

Amazon is wrong:
-Because it offers ebooks below cost, in violation of U.S. antitrust laws on "dumping"
--to put legitimate competitors, who have to turn a profit to stay in business, out of business
--to increase customer loyalty, thus increasing Kindle sales and public reliance on its own DRM garden while others wither away


As others have pointed out, Amazon is not selling eBooks below cost. They simply run a different model and therefore negotiated a difference price to sell things at. They have eBooks in a variety of price ranges, not simply one fixed price as Apple tried to do.

The Department of Justice is wrong:
-Because it imagines Apple is a bigger player in the ebook market than is Amazon.
-Because it imagines Amazon's way involves "competition", while Apple's does not.


DOJ in this case got nothing wrong because Apple did something illegal - price fixing.

--(*)Because without Apple's agency model disruption, there is no competition in the ebook market. There is only Amazon, destroying specialized Barnes & Noble and ejecting generalized Sony and Apple by offering artificially low prices, subsidized by their natural online shopping monopoly.


Apple's Agency Model is certainly allowed. What is not allowed is for them to also price fix in such a way as to push other business's with other models to charge more - which is exactly what they tried to do and got called on.

B&N's state has nothing to do with the sale of eBooks but their own inability to negotiate the changing businesses related to what they do due to the Internet. Even then, they have been embracing more of the Amazon method of doing things - they just haven't done it as well as Amazon has, and their Internet site was not as good for quite a while.

The government has no mechanism for simultaneously dealing with both an unscrupulous market manipulator and their equally established, similarly wrongdoing vigilante rival, and arriving at a pro-consumer outcome. So they've come down on the vigilante at the behest of the original villain, but when's Amazon's trial? Before or after they flip the "profit switch" we've all known for years is coming? If it ever comes, I'm sure it'll be long after the Nook business is a distant memory.


Again, you're way off base.

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