Justice Department to Apple, Publishers: Here we come.

[meStevo]

The Justice Department finally catches up to Steve Jobs - Apple 2.0 - Fortune Tech

Justice Department coming after Apple and publishers for collusion relating to the switch to the agency pricing model, something the European Commission began investigating last year.

 

[rockymtnhigh]

Yeah!!!

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[meStevo]

I wonder what a settlement for this kind of case would look like. They changed their entire pricing structure and affected not just Apple customers, not like everyone is going to get 2 free books and then business resumes as normal if found at fault/settle.


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[rockymtnhigh]

I posted excitement about the govt looking at the collusion issue, but don't harbor at lot of expectations that a lot will change. But I sure preferred $9.99 e-books.

 

[truckracer]

apple corporation is richer than our government. apple will tell the gov whats up

 

[meStevo]

Yeah or not.

http://t.co/8pM7fzdi

Reportedly 3 of the 5 have accepted a settlement that includes ripping up the contracts they've signed with Apple.

The other 2 and Apple appear ready to go to court to fight it.

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[lparsons21]

I can understand Apple's point of view, but I sure like cheaper books too!

One thing that was really good about what Apple and the publishers did was make me look for other legal sources for books. I read a lot, and it has been said that the reason I don't eat cereal for breakfast is that it takes too long to read the box!

I pay for very few books, there are a slew of free ebooks out there, and not all classics. Feedbooks is a great source for new books from unknown (and some known) writers, as well as some early stuff from now established writers. Some are great, some are really bad, but most are enjoyable.

 

[meStevo]

Justice Department has officially filed suit against Apple and the 5 publishers, as rumored 3 have settled:

Simon & Schuster, Lagardère SCA's Hachette Book Group and HarperCollins have settled with the DoJ over unspecified terms

Apple's defense is that the agreements enhanced competition in an industry dominated by Amazon.

U.S. Files Antitrust Lawsuit Against Apple, Hachette - Bloomberg

Rumored goals of the antitrust action:

- Allow Amazon and other retailers to return to the wholesale model, allowing them to set prices for the books
- Void the 'most-favored nation' clauses in Apple's contracts that require the lowest prices offered to competitors also be offered to Apple.
.

 

[TheForce]

Book lovers- While this may be a short lived $9.99 discount from Amazon, once Amazon puts all others out of business, they will have a monopoly on book sales. That is their goal and the DOJ will enable that. Apple won't be crippled much if they lose the entire ebook business. Amazon won't offer books at a loss forever. The net effect of this move will be that the DOJ will assist Amazon in attaining a monopoly. Ironic!

 

[rockymtnhigh]

Book lovers- While this may be a short lived $9.99 discount from Amazon, once Amazon puts all others out of business, they will have a monopoly on book sales. That is their goal and the DOJ will enable that. Apple won't be crippled much if they lose the entire ebook business. Amazon won't offer books at a loss forever. The net effect of this move will be that the DOJ will assist Amazon in attaining a monopoly. Ironic!

How is offering an e-book at $9.99 a loss? Given the much cheaper cost? This is a very good thing; let the retailers sell it for the price they want. The Agency model Apple put forth in collusion with the publishers has resulted in obnoxious and unfair pricing schemes for selling bits.

 

[rockymtnhigh]

Until Apple and the publishers came up with the new approach, Amazon consistently sold every Kindle book for $9.99 or less. A very fair price.

 

[TheForce]

But Amazon admits this $9.99 price point was at a loss. Since I understand business, I know that business chooses to sell items at a loss for a hidden agenda. Once the hidden agenda is achieved, the loss marketing is discontinued. When I hear people use a term like what's "fair", I just assume they don't understand business, never ran a business, nor managed another's business in the real world. People who fail to understand this or really believe a business will continue to sell at a loss because it's the fair thing to do are just fools.

 

[TheForce]

How is offering an e-book at $9.99 a loss? Given the much cheaper cost? This is a very good thing; let the retailers sell it for the price they want. The Agency model Apple put forth in collusion with the publishers has resulted in obnoxious and unfair pricing schemes for selling bits.

A simple lesson in basic business-

Do you believe that if I buy a book for say, $9 each and sell it for $10 that I made a one dollar profit?

If you answered yes then you don't understand business.

To go further, you would have to have the facts on the specific business, but in generic discussion, a business selling price is based on purchase price + Cost of goods sold + plus labor + Taxes + a whole assortment of other costs prorated to the number sold + profit. The profit may be reduced to zero but can never be less than zero. If the selling price is below the purchase price plus cost of goods sold and zero profit the business operates at a loss. The money to pay the costs comes usually from borrowed money or investors since it can't print money like the government.
The bottom line here you have no idea what the specific profit or loss of these books are since you don't have the facts to form an intelligent decision.

The point of collusion has not been determined and your accusation simply tells me you have tried the defendant with the press and news stories as your evidence.

 

[John Kotches]

How is offering an e-book at $9.99 a loss? Given the much cheaper cost? This is a very good thing; let the retailers sell it for the price they want. The Agency model Apple put forth in collusion with the publishers has resulted in obnoxious and unfair pricing schemes for selling bits.

I agree that collusion is not an open / fair practice, but are they anti-competitive in comparison with Amazon, Barnes/Noble and Google e-book pricing? I don't know. Haven't really shopped around.

 

[John Kotches]

A simple lesson in basic business-

Do you believe that if I buy a book for say, $9 each and sell it for $10 that I made a one dollar profit?

Yes, because that's the gross profit. Net profit is what's left after expenses.


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[meStevo]

Pretty sure Amazon wasn't selling all their books at a loss, just some significant releases to get people into the platform.

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[John Kotches]

Pretty sure Amazon wasn't selling all their books at a loss, just some significant releases to get people into the platform.

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The term is "loss leader"

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[mdram]

an ebook should cost no more then 1/2 the cost of a paperback

 

[meStevo]

The term is "loss leader"

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Wow, you know business too!

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[John Kotches]

an ebook should cost no more then 1/2 the cost of a paperback

Any of the vendors have to sell a lot of e-books to recoup the costs their data centers rack up in advance of any sales of said books. Apple is spending upwards of $1 billion dollars over 8-10 years (100 million a year if its distributed evenly). That's a lot of money up front.



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