50 ms·

Apple gets smacked by $450M e-book price-fixing fine

378 points by CrankyBear 11y ago

runholm 11y ago
[statement from Apple:] Apple did not conspire to fix e-book pricing and this ruling does nothing to change the facts Isn't that exactly what a court ruling does. It settles what really happened.
vonklaus 11y ago
Makes sense. Apple gets sued for charging more than a retailer that owned 90% of the market in an Anti-Trust case and is fined $450 million. Verizon is a common carrier that manipulated the traffic in the service it provides from its government granted monopoly for 4 years and is fined 1.350M. This is why people vote donald trump. It is the voting equivalent of YOLO. It's basically the civic equivalent of a weapon, and proving the point that he can get elected may draw into stark contrast that we might need to make a few tweaks here in there with how we operate going forward.
- Oletros 11y ago
  > Apple gets sued for charging more than a retailer that owned 90% of the market in an Anti-Trust case and is fined $450 million. No, Apple and the publishers were sued for colluding to fix the prices in all the stores, including the ones from Apple, Amazon, B&N or Sony
- andrewvc 11y ago
  So, you're saying that since there are major issues with the current system the best idea is just to burn it to the ground by electing a reckless maniac? That's just a way to make sure everyone is equally screwed.
  - yardie 11y ago
    Like Baltimore, sometimes you have to burn shit to the ground before people start listening. The media didn't care about the peaceful protests over the Freddie Gray murder. But burn 1 CVS down and everyone shows up.
  - integraton 11y ago
    > reckless maniac That's an absurdly partisan statement considering his likely opponent is currently under investigation for reckless behavior while serving as a senior government official.
    - ksenzee 11y ago
      His opponent's level of reckless mania is not pertinent here. (Or should that be maniacal recklessness?) Also, there's nothing partisan about Trump-bashing. People from all over the political spectrum have been making common cause over it.
  - jessaustin 11y ago
    Historians centuries from now will never understand how the famous and wealthy scion of one of the wealthiest families in the most famous and wealthy city in the world was ever perceived to be a "reckless maniac" outsider. This guy is as inside as inside gets. His entire public persona is a calculated pose. He was recorded saying that he would develop such a persona, were he ever to deign to run for office. A vote for Trump is the opposite of a vote to burn down anything, no matter what the rubes think. If, as seems more and more likely, Trump is elected, I guarantee the following: no "border wall" will be built, the TPP and TTIP will both be ramrodded through, and the "1%" will get even more "1%" than they already are.
    - archgoon 11y ago
      > He was recorded saying that he would develop such a persona, were he ever to deign to run for office. Source? There's a quote about him claiming that he'd "run as a republican, since they're the dumbest voters in the country." but that quote has been debunked. http://www.snopes.com/1998-trump-people-quote/ http://www.snopes.com/1998-trump-people-quote/
- hga 11y ago
  You left out the little bit about Apple and the publishers, who, as Adam Smith put it in The Wealth of Nations in 1776: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."
  - enlightenedfool 11y ago
    He defined capitalism.
    - hga 11y ago
      Such conspiracies are not even remotely confined to capitalist systems, this is a problem with human nature that no system is capable of fixing.
  - vonklaus 11y ago
    This makes limited sense. While Apple did fix prices, 90% of control of the market of a highly elastic good was controlled by a single entity engaged in dumping, which drove out all other competition. If Adam Smith believed in supply and demand (he did, he wrote the book on it) I think it would be hard to argue that responding to a monopoly with 90% distribution of a good with a price increase would make much sense. Even if we assume that it was only with many big publishers, for a subset of books, and that Barnes and Noble and Borders didn't exist and compete. I would be interested to know if they even made that much in profit. If I could buy a car at 9 out of 10 places I go for $5000, why the fuck would I seek out the one place selling an identical car for $5300? If by chance I didn't shop around, it is likely that I am not motivated by price, and thus descrimination here has a negligible effect. Now that all small book retailers and Borders Books have gone out of business, and Barnes and Noble is quite close we can look back with 100% certainty and say Apple's anti-competitive tactics of meeting a supply flood with increased pricing was the linchpin in their demise. As we know from history, people will hunt for a bad deal, and ruthlessly work against their own self interest even with significant friction.
    - 11y ago
- aikah 11y ago
  > This is why people vote donald trump I'm sure people vote Donald Trump for many reasons, however I don't really understand the need to insert Trump in this conversation, and given Trump business record he is no stranger to shady business practices. As for Verizon fine vs Apple fine , I'm no lawyer so I don't know what Verizon's case maximum penalty was, though the fine seems quite low. edit: s/tactics/practices
  - mikeash 11y ago
    It's just a topical way of saying "this is why people get disenchanted with government." For some people, supporting Trump is just a "screw you" to politics.
    - pklausler 11y ago
      Or to civilization.
    - DanBC 11y ago
      Sure, but look at the shitty sub-thread it's generated.
      - mikeash 11y ago
        Do I have to?
  - vonklaus 11y ago
    It is pretty relevent. I am not being sarcastic here, I will elaborate. Outside of the 1970s in switzerland when an influx of capital poured out of Russia into banking safe havens, there has not been many negative interest rates. So typically to get out of a poor economy you employ a range of tactics. Monetary policy being a main one. Of course we can't do that as we can not really lower interest rates as they are essentially 0. This is also a component of the risk free rate, which is essentially negative. Fiscal policy being the other one. However, we don't have money, and since the amount of money in the economy grows exponentially, when you have outsize lending the amount of money gets ratcheted the fuck up. So you have no more levers to pull here. Russia, I beleive their equivalent of secretary of state, that there was "a new cold war", just google that phrase. Also, the people Motherfucking Security Board of the Bulletin of Economic Scientists[0] have set the doomsday clock the closest to midnight it has ever been. recently? no, ever. No one is talking about the ban China just laid down on any foreign entity competing in technology. Happens on Thursday. In a loose interpretation, it would only be all media companies, anyone with published works and media, and any imagery. Darker interpretations have it being interpreted as "publishing" being the app store. However, it is all based on a single reuters qoute and the law which has been published, which you can look up. Then you have US banning china from selling their flagship phone (happened today/yesterday). Unemployment is insane. At this point a rougue agency has near complete control over the entire worlds communications. N. Korea is firing nukes and shit, but honestly that isn't even a big deal at this point. We created a fucking rogue state in the middle east, and hundreds of thousands of people are fucking stampeding through the world to get out of there. Stock market is "up" from the 3.3 TRILLION dollar nose dive the world markets took in the opening 2 months of trading. According to 538[1] it looks like we have effectively grasped this as a nation, and have identified the economy and a poorly run government as the top 2 issues. Now I am about as cynical as they come. However, I am a fucking patriot even with my fairly contrarian views. I refuse to believe that Donald Trump as a person is how the nation succeeds, and I hope most people believe this as well. HOWEVER, the verizon/apple thing (btw just currently going to trial to prevent the governemnt from getting the last 1% of the phone) is indicative of how fucked up everything is. So, yes I do think the election is fairly relevent to this. If you will notice in history, people will put up with horrible consistent conditions, but they do not fare well with uncertainty. So that was my point. [0]http://thebulletin.org/press-release/doomsday-clock-hands-remain-unchanged-despite-iran-deal-and-paris-talks9122 http://thebulletin.org/press-release/doomsday-clock-hands-re... [1]http://fivethirtyeight.com/features/year-ahead-project/#part6 http://fivethirtyeight.com/features/year-ahead-project/#part...
- jonknee 11y ago
  > Makes sense. Apple gets sued for charging more than a retailer that owned 90% of the market in an Anti-Trust case and is fined $450 million. No, Apple got sued for conspiring with the publishers to raise the prices and force Amazon to rise the prices as well (through agency pricing). The iBookstore has been a near total failure too, so all Apple really accomplished is to make readers pay more for books on Amazon.
  - mcphage 11y ago
    > force Amazon to rise the prices as well (through agency pricing). I think those Amazon <---> publisher contracts all got nullified as part of their settlements with the government.
    - hga 11y ago
      As far as I know they're still in effect, those publishers have seen their ebook sales go down substantially, which is blamed on the enforced price increases due to agency pricing. And you'd otherwise see Amazon's return to its old scheme where normal ebooks never cost the consumer more than $9.99, whereas, to take a random example I just looked up, Jim Butcher's latest novel published half a year ago goes for $13.99, ~$1.50 more than the paperback and only ~$2.50 less than the hardback: http://www.amazon.com/Cinder-Spires-Aeronauts-Windlass/dp/0451466802/ http://www.amazon.com/Cinder-Spires-Aeronauts-Windlass/dp/04...
      - mcphage 11y ago
        I'm not finding much in the way of settlement results (overshadowed by similar sounding, more recent news), but articles like this: http://goodereader.com/blog/commentary/agency-pricing-for-ebooks-returns-this-is-a-good-thing http://goodereader.com/blog/commentary/agency-pricing-for-eb... claim that the publishers were forced to abandon the agency model: "When the publishers all settled out of court they were forced to renegotiate their e-book distribution contracts with Amazon, Apple, Barnes and Noble, Kobo, Google and all of the other minor players." That article also says HarperCollins since returned to it, and this one: http://www.digitalbookworld.com/2014/simon-schuster-strikes-amazon-deal-reviving-agency-ebook-pricing/ http://www.digitalbookworld.com/2014/simon-schuster-strikes-... says Simon Schuster returned to it as well. I'm not sure about the others.
6stringmerc 11y ago
>Apple did not conspire to fix e-book pricing and this ruling does nothing to change the facts We are disappointed the Court does not recognize the innovation and choice the iBooks Store brought for consumers. While we want to put this behind us, the case is about principles and values. We know we did nothing wrong back in 2010. Unless I've read patently false accounts of the behavior, discussions, and conduct of Steve Jobs on behalf of Apple circa the iBooks store preparation and roll-out, this is one of the most laughably false statements that a lawyer has put to paper in 2016. The year is still early though.
- coldtea 11y ago
  >Unless I've read patently false accounts of the behavior, discussions, and conduct of Steve Jobs on behalf of Apple circa the iBooks store preparation and roll-out, this is one of the most laughably false statements that a lawyer has put to paper in 2016. You've probably indeed heard patently false accounts. What practice exactly do you think constituted price-fixing, based on the accounts you've read?
- tehwebguy 11y ago
  Price fixing doesn't just mean the fixed their own price, otherwise the dollar store would be in trouble. When Amazon has 90% of the market it's silly to call what Apple did price fixing. Apple didn't work with competitors to fix prices for consumers, they told publishers to get on board or get bent. That should be an option every company has, unless they own the market, IMO. Edit: Somehow typed the word "eBay" instead of the word "what" - for THAT I do blame Apple ;)
  - Oletros 11y ago
    > Apple didn't work with competitors to fix prices for consumers No, they worked with publishers to fix the prices for consumers
    - andrewstuart2 11y ago
      Right, they didn't have to work directly with their competitors; they went above their heads.
WalterBright 11y ago
I find the modern view of monopoly peculiar: "the market for retail distribution of electronic books ... was essentially a monopoly, with Amazon.com ... controlling 90% of e-book sales. Amazon sold many of the most popular e-books at a loss, making it difficult for other retailers to enter the e-book market as they 'would run the risk of losing money if [they] tried." along with the 1999 conviction of Microsoft being a monopoly in part because they gave away Explorer. A monopoly is historically identified with having a higher than market price, not a lower.
- frandroid 11y ago
  Correlation is not causation, etc.
- Caprinicus 11y ago
  If you have a higher than market price, then other players can come in and disrupt your monopoly. If you are selling stuff at a loss to drive other players out of the market, then it is impossible for a new player to get off the ground. The definition has more to do with what is in the long term detrimental to the market's diversity.
  - WalterBright 11y ago
    What price to charge? 1. higher - gouging, profiteering, monopolistic rents 2. same - collusion, price fixing 3. lower - unfair competition, predatory pricing All are illegal!
    - dhimes 11y ago
      None is illegal if you don't have a monopoly.
      - WalterBright 11y ago
        So if you do have a monopoly, what is the legal price to charge?
cm2187 11y ago
When I think of how much shit a bank would get for a headline like that...
whitegrape 11y ago
Cool, nearly half a billion in repatriated money that won't be shuffled to offshore accounts...
bladerunner82 11y ago
Mere beer money...
- bpodgursky 11y ago
  Relative to what they actually made off of ebooks? Unlikely although I don't have numbers offhand.
  - bladerunner82 11y ago
    Relative to the company as a whole. Stuff like this is built in to the slush fund as "hazard" money. The shareholders could care less. Apple has more money than the African continent. I doubt anyone is overly worried.
- sangnoir 11y ago
  Why does that sound so much like a kid saying "That didn't hurt" while furiously rubbing the punched arm? Apple cared enough to try and appeal the case to the highest possible level (SCOTUS). To paraphrase a commenter on Ars Technica: $500,000,000 is a lot of iPads/MacBooks sold. All down the drain due to anti-consumer shenanigans.
  - Qwertious 11y ago
    Apple would appeal a $1,000,000 court case until and unless they expected to lose more money by fighting it than by just paying the fine. And essentially, $500mil is more than enough money for keeping on some lawyers for half a decade. Still, it's worth comparing to how much money they make. So, a half-billion fine once in the last few years, and they made $18billion this quarter: http://moneymorning.com/2016/01/26/q1-apple-earnings-2016/ http://moneymorning.com/2016/01/26/q1-apple-earnings-2016/ I honestly don't see Apple being seriously hurt by this.
    - sangnoir 11y ago
      Apple partisans act as if the money is coming from Apple's petty-cash drawer. My point is somewhat similar to your: in that they would do anything not to pay the half a million dollars. Comparing to the numbers in their last FY (Oct '15), the settlement is 0.94% of their annual profit. I too wouldn't be "hurt" by a 1% fine of my net annual income, but I'd rather put it to better use.
Arzh 11y ago
Well if Apple felt that Amazon was acting as a monopoly, and unfairly blocking them from entering the market with low prices why did they not request an investigation from the FTC instead of doing something they knew was illegal?
- tyre 11y ago
  For the same reason Uber did not try to fight taxi regulation in every local municipality instead of doing what they knew to be illegal. Litigation takes a really long time. By the time you win, you've lost. Jobs wanted to launch iBooks right now and was willing to cut corners to get what he wanted.
  - johnloeber 11y ago
    By the time you win, you've lost. Nicely put. I'll note that phrase down for future use.
  - sangnoir 11y ago
    I wish we could create a "Galt's Gulch" and quarantine all the toxic individuals/entities who believe that the rules don't apply to them. They would be free to "cut corners" and "win" to their hearts content only amongst themselves.
    - andyfleming 11y ago
      Sometimes innovation requires breaking rules. Uber wouldn't have had the success it's had if it had gone through "proper" channels. While it made them successful, I'd argue that it also benefited consumers.
      - saalweachter 11y ago
        "It also benefited consumers" is not a get out of jail free card. If I break into warehouses, steal merchandise by the truckload, and sell it at a tenth the price, that also benefits my consumers.
idibidiart 11y ago
Retribution for standing up to the tyranny?
maxxxxx 11y ago
Maybe the case has merit or not but I am really tired of just imposing fines. We have reached a point where big companies and banks can do whatever they want and the worst thing that can happen is to pay a small portion of their earnings. Basically they are outside the law.
- blisterpeanuts 11y ago
  What harm has been demonstrated by this supposed conspiracy to set prices? Do you pay one penny more for your e-books? I don't. The whole thing seems like a technicality, a violation of a 110-year-old law that was never intended to cover this type of complex digital transaction.
  - maxxxxx 11y ago
    It's a law. A lot of laws are old and don't apply to the present anymore but the little guy still has to obey them. They can lobby for a law change but it's not acceptable that people/entities with lots of money can decide which laws they obey and which not.
    - sjwright 11y ago
      Everyone makes that decision every hour of the day. We're all constantly breaking one obscure law or another.
      - RodericDay 11y ago
        Tolerance of this kind of situation is what pushes North America closer and closer to Kafkaesque nightmares though.
        donatj 11y ago
        Tolerance of victimless crimes that hurt no one is a Kafkaesque nightmare?
deleted 11y ago
[deleted]
seanp2k2 11y ago
450 mil for this but 1.3 for Verizon super cookies, and Verizon doesn't even have to stop doing it. I guess Apple should hire better lobbyists.
- madaxe_again 11y ago
  They did just embarrass and piss off the federal government - $449M of this along with "no appeals sorry" probably sits under the heading "revenge".
  - Sanddancer 11y ago
    The supreme court is rather independent of the executive branch and of law enforcement. Furthermore, this was an appeal of an appellate court's ruling that occurred last year. Keep in mind that the Supreme Court primarily concerns itself with cases that potentially set or clarify precedence. As they didn't feel that any new legal ground would be made here, they didn't take the case.
programminggeek 11y ago
Notice how authors get lost in this? Apple + 5 major publishers vs. Amazon. What a joke. As an author it's a great time to self publish and make it work on your own, but I find it absurd that ANY of those companies would attempt to dictate the price of books. P.S. You can read my book about creative work for free here: http://brianknapp.me/books/creative-pursuit/ http://brianknapp.me/books/creative-pursuit/ I talk about the importance of Self Publishing in Chapter Four.
xchaotic 11y ago
Can you correct me if I'm wrong but now Apple can repatriate some of it massive overseas cash hoard and offset it against the $450M fine without attracting any tax on it as it is a loss. technically their balance books will be $450M worse off but they wouldn't have been able to use that money anyway without attracting a high tax on it. is that correct?
- delinka 11y ago
  I'm pretty certain they're taxed on the money simply because it crosses a border. It's not treated as revenue which can be offset by expenses.
univalent 11y ago
They probably have this in petty cash. What use is a fine of this amount? It is like fining a football player 1500 for an illegal hit.
Johnnybe 11y ago
Price fixing. Salary fixing. H1B fixing. Fuck you Apple.
gdilla 11y ago
Apple is actually innocent here. What Apple wanted was the dinosaur publishing industry to adopt the agency model for pricing ebooks. The publisher sets the price, and revenue is split 70/30. This was the model for all digital goods on iTunes for the previous decade. The publishing industry had always been a wholesale model. They set the 'list' price on the book jacket, and the retailer would 'discount' it to the consumer. The retailer would pay the publisher the wholesale price, which was about 50% of list. Amazon loved the wholesale model because they compete on price. Amazon, at the time, was trying to create an expectation for consumers that all ebooks were $9.99. What the consumer didn't know was that Amazon was taking a loss on each ebook. Amazon was able to get publishers on board with their plan by paying the 'list' price on an ebook, and turning around and selling it for a loss at 9.99. Amazon's long play was 1) creating a market for ebooks in a price band they thought was attractive and 2) forcing the publishers to capitulate later when they had more leverage. Amazon never wanted agency pricing since they would lose their competitiveness if it ever came to bare. But Apple was successful - it eventually got publishers to adopt agency pricing, and that also meant Amazon ebooks had to adopt agency pricing (if you're setting the price, you can't give one outlet a better price). Amazon hated this development and championed this price fixing suit as a result. If you ever wondered why physical books are priced less than ebooks at times, this is why. Agency pricing.
- jsight 11y ago
  > Apple is actually innocent here. Ok, I get that they were going up against a monopolist who appears to be dumping. In what world does responding to that by building a cartel of suppliers engaging in monopolistic behavior to raise the pricing above the price of physical books and fix the pricing across all retailers turn into "innocence"? We as consumers are worse off for what Apple did here.
  - gdilla 11y ago
    I'm not so sure that ever came to pass. I think all Jobs was saying is, if you don't adopt agency pricing, the value of your goods will be artificially low. If you adopt agency pricing, you can keep it high (that is, the same as physical).
scottfits 11y ago
The eBook fixing collusion is so obvious. I remember when eBooks where $4 because it makes sense -- no printing, no shipping, that's what it should cost. Now it's $16.99 for some eBook, and I think it's a disgrace because authors and customers get screwed with the rigged pricing.
- Retra 11y ago
  You're not paying for shipping and printing, you're paying for writing. If you want a shipment of bound, blank pages, you can get that for $4 any time.
  - flavor8 11y ago
    Uh, no. You're paying for middlemen (printing, marketing, big publishing, etc) . Authors typically take 10 to 15%, either of royalties or net profit.
    - Retra 11y ago
      I've never paid for a printed ebook.
      - flavor8 11y ago
        Well no shit. You were arguing that the significant portion of the cost of physical books is the writing. It's not.
        Retra 11y ago
        No, I was arguing that one should not expect ebooks should not be massively cheaper than paper books just because they aren't printed. There's still a lot to pay for.
donatj 11y ago
Can I get an honest explanation of why what they did was "bad"? They set the price of products they sell in conjunction with the publishers? Isn't that what every major seller of goods does? I watched a documentary on Wal-Mart a while back where they were working with Chinese DVD player mfgs to get the price Wal-Mart wanted. I genuinely don't understand the harm of their actions, and would be thrilled if someone could explain?
- prasadjoglekar 11y ago
  Short answer: Publishers were too weak individually to challenge Amazon's ebook business model (the wholesale version). If all the publishers colluded to stop selling to Amazon, that would be a violation of the anti-trust act. Apple comes along and writes contracts with each publisher such that in aggregate the contracts provide the cover to do exactly what the publishers could not do on their own. The harm in the short term was to Amazon - under threat of being cut off by every publisher, it would have forced Amazon to move to a different model of pricing. The follow on effect would be to raise prices for all consumers.
legulere 11y ago
Meanwhile in most of Europe we have (e-)book price fixing by law: https://en.wikipedia.org/wiki/Fixed_book_price_agreement https://en.wikipedia.org/wiki/Fixed_book_price_agreement
bipin_nag 11y ago
The news is fine but why drag Amazon into it? >At Amazon headquarters, however, they're probably popping open the champagne. >Amazon, however, is probably grinning like the Cheshire Cat. The author is not doing justice to his job as a reporter. If you want to opine then separate it from the facts. Amazon which has nothing to do with the ruling gets depicted as a villain and Apple which actually is guilty doesn’t get its share of bad words. What is worse is that he starts to paint Amazon that way before he gives any of the details of ruling.
- studentrob 11y ago
  I do not think Amazon looks like a villain in the article. Good guys drink champagne too, and the Cheshire Cat was not a bad guy, he was neutral. It is relevant to mention Amazon. Although Amazon isn't named in the case, Apple was competing with Amazon directly by offering publishers a service through which they can set their own prices. With Amazon, publishers don't set the price of books, Amazon does. The ruling does effect Amazon's business. They have one less competitor model to worry about.
  - tantalor 11y ago
    > the Cheshire Cat was not a bad guy, he was neutral This checks out. https://s-media-cache-ak0.pinimg.com/736x/af/20/c6/af20c61ffdaaf42a4e0d4a6c77856089.jpg https://s-media-cache-ak0.pinimg.com/736x/af/20/c6/af20c61ff...
- mhaymo 11y ago
  Not that I disagree with your point, but it's not true that Amazon had "nothing to do with the ruling". According to Wikipedia, they were the original complainants: > Shortly after January 31, Amazon sent a letter to the Federal Trade Commission complaining about the simultaneous nature of the demands for agency model agreements from the Publishers who had signed with Apple. https://en.wikipedia.org/wiki/United_States_v._Apple_Inc https://en.wikipedia.org/wiki/United_States_v._Apple_Inc.
- rjbwork 11y ago
  >The author is not doing justice to his job as a reporter. If you want to opine then separate it from the facts. Implying internet bloggers are reporters. The prestige of the journalist today is in the toilet because the barrier to entry is essentially nil. You can just start writing for some fly by night site and get hundreds to thousands of readers overnight, without any basic understanding of the profession or established practices.

378 points by CrankyBear 11y ago

[statement from Apple:] Apple did not conspire to fix e-book pricing and this ruling does nothing to change the facts Isn't that exactly what a court ruling does. It settles what really happened.

vonklaus 11y ago

Makes sense. Apple gets sued for charging more than a retailer that owned 90% of the market in an Anti-Trust case and is fined $450 million. Verizon is a common carrier that manipulated the traffic in the service it provides from its government granted monopoly for 4 years and is fined 1.350M. This is why people vote donald trump. It is the voting equivalent of YOLO. It's basically the civic equivalent of a weapon, and proving the point that he can get elected may draw into stark contrast that we might need to make a few tweaks here in there with how we operate going forward.

Oletros 11y ago
> Apple gets sued for charging more than a retailer that owned 90% of the market in an Anti-Trust case and is fined $450 million. No, Apple and the publishers were sued for colluding to fix the prices in all the stores, including the ones from Apple, Amazon, B&N or Sony
andrewvc 11y ago
So, you're saying that since there are major issues with the current system the best idea is just to burn it to the ground by electing a reckless maniac? That's just a way to make sure everyone is equally screwed.
- yardie 11y ago
  Like Baltimore, sometimes you have to burn shit to the ground before people start listening. The media didn't care about the peaceful protests over the Freddie Gray murder. But burn 1 CVS down and everyone shows up.
- integraton 11y ago
  > reckless maniac That's an absurdly partisan statement considering his likely opponent is currently under investigation for reckless behavior while serving as a senior government official.
  - ksenzee 11y ago
    His opponent's level of reckless mania is not pertinent here. (Or should that be maniacal recklessness?) Also, there's nothing partisan about Trump-bashing. People from all over the political spectrum have been making common cause over it.
- jessaustin 11y ago
  Historians centuries from now will never understand how the famous and wealthy scion of one of the wealthiest families in the most famous and wealthy city in the world was ever perceived to be a "reckless maniac" outsider. This guy is as inside as inside gets. His entire public persona is a calculated pose. He was recorded saying that he would develop such a persona, were he ever to deign to run for office. A vote for Trump is the opposite of a vote to burn down anything, no matter what the rubes think. If, as seems more and more likely, Trump is elected, I guarantee the following: no "border wall" will be built, the TPP and TTIP will both be ramrodded through, and the "1%" will get even more "1%" than they already are.
  - archgoon 11y ago
    > He was recorded saying that he would develop such a persona, were he ever to deign to run for office. Source? There's a quote about him claiming that he'd "run as a republican, since they're the dumbest voters in the country." but that quote has been debunked. http://www.snopes.com/1998-trump-people-quote/ http://www.snopes.com/1998-trump-people-quote/
hga 11y ago
You left out the little bit about Apple and the publishers, who, as Adam Smith put it in The Wealth of Nations in 1776: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."
- enlightenedfool 11y ago
  He defined capitalism.
  - hga 11y ago
    Such conspiracies are not even remotely confined to capitalist systems, this is a problem with human nature that no system is capable of fixing.
- vonklaus 11y ago
  This makes limited sense. While Apple did fix prices, 90% of control of the market of a highly elastic good was controlled by a single entity engaged in dumping, which drove out all other competition. If Adam Smith believed in supply and demand (he did, he wrote the book on it) I think it would be hard to argue that responding to a monopoly with 90% distribution of a good with a price increase would make much sense. Even if we assume that it was only with many big publishers, for a subset of books, and that Barnes and Noble and Borders didn't exist and compete. I would be interested to know if they even made that much in profit. If I could buy a car at 9 out of 10 places I go for $5000, why the fuck would I seek out the one place selling an identical car for $5300? If by chance I didn't shop around, it is likely that I am not motivated by price, and thus descrimination here has a negligible effect. Now that all small book retailers and Borders Books have gone out of business, and Barnes and Noble is quite close we can look back with 100% certainty and say Apple's anti-competitive tactics of meeting a supply flood with increased pricing was the linchpin in their demise. As we know from history, people will hunt for a bad deal, and ruthlessly work against their own self interest even with significant friction.
  - 11y ago
aikah 11y ago
> This is why people vote donald trump I'm sure people vote Donald Trump for many reasons, however I don't really understand the need to insert Trump in this conversation, and given Trump business record he is no stranger to shady business practices. As for Verizon fine vs Apple fine , I'm no lawyer so I don't know what Verizon's case maximum penalty was, though the fine seems quite low. edit: s/tactics/practices
- mikeash 11y ago
  It's just a topical way of saying "this is why people get disenchanted with government." For some people, supporting Trump is just a "screw you" to politics.
  - pklausler 11y ago
    Or to civilization.
  - DanBC 11y ago
    Sure, but look at the shitty sub-thread it's generated.
    - mikeash 11y ago
      Do I have to?
- vonklaus 11y ago
  It is pretty relevent. I am not being sarcastic here, I will elaborate. Outside of the 1970s in switzerland when an influx of capital poured out of Russia into banking safe havens, there has not been many negative interest rates. So typically to get out of a poor economy you employ a range of tactics. Monetary policy being a main one. Of course we can't do that as we can not really lower interest rates as they are essentially 0. This is also a component of the risk free rate, which is essentially negative. Fiscal policy being the other one. However, we don't have money, and since the amount of money in the economy grows exponentially, when you have outsize lending the amount of money gets ratcheted the fuck up. So you have no more levers to pull here. Russia, I beleive their equivalent of secretary of state, that there was "a new cold war", just google that phrase. Also, the people Motherfucking Security Board of the Bulletin of Economic Scientists[0] have set the doomsday clock the closest to midnight it has ever been. recently? no, ever. No one is talking about the ban China just laid down on any foreign entity competing in technology. Happens on Thursday. In a loose interpretation, it would only be all media companies, anyone with published works and media, and any imagery. Darker interpretations have it being interpreted as "publishing" being the app store. However, it is all based on a single reuters qoute and the law which has been published, which you can look up. Then you have US banning china from selling their flagship phone (happened today/yesterday). Unemployment is insane. At this point a rougue agency has near complete control over the entire worlds communications. N. Korea is firing nukes and shit, but honestly that isn't even a big deal at this point. We created a fucking rogue state in the middle east, and hundreds of thousands of people are fucking stampeding through the world to get out of there. Stock market is "up" from the 3.3 TRILLION dollar nose dive the world markets took in the opening 2 months of trading. According to 538[1] it looks like we have effectively grasped this as a nation, and have identified the economy and a poorly run government as the top 2 issues. Now I am about as cynical as they come. However, I am a fucking patriot even with my fairly contrarian views. I refuse to believe that Donald Trump as a person is how the nation succeeds, and I hope most people believe this as well. HOWEVER, the verizon/apple thing (btw just currently going to trial to prevent the governemnt from getting the last 1% of the phone) is indicative of how fucked up everything is. So, yes I do think the election is fairly relevent to this. If you will notice in history, people will put up with horrible consistent conditions, but they do not fare well with uncertainty. So that was my point. [0]http://thebulletin.org/press-release/doomsday-clock-hands-remain-unchanged-despite-iran-deal-and-paris-talks9122 http://thebulletin.org/press-release/doomsday-clock-hands-re... [1]http://fivethirtyeight.com/features/year-ahead-project/#part6 http://fivethirtyeight.com/features/year-ahead-project/#part...
jonknee 11y ago
> Makes sense. Apple gets sued for charging more than a retailer that owned 90% of the market in an Anti-Trust case and is fined $450 million. No, Apple got sued for conspiring with the publishers to raise the prices and force Amazon to rise the prices as well (through agency pricing). The iBookstore has been a near total failure too, so all Apple really accomplished is to make readers pay more for books on Amazon.
- mcphage 11y ago
  > force Amazon to rise the prices as well (through agency pricing). I think those Amazon <---> publisher contracts all got nullified as part of their settlements with the government.
  - hga 11y ago
    As far as I know they're still in effect, those publishers have seen their ebook sales go down substantially, which is blamed on the enforced price increases due to agency pricing. And you'd otherwise see Amazon's return to its old scheme where normal ebooks never cost the consumer more than $9.99, whereas, to take a random example I just looked up, Jim Butcher's latest novel published half a year ago goes for $13.99, ~$1.50 more than the paperback and only ~$2.50 less than the hardback: http://www.amazon.com/Cinder-Spires-Aeronauts-Windlass/dp/0451466802/ http://www.amazon.com/Cinder-Spires-Aeronauts-Windlass/dp/04...
    - mcphage 11y ago
      I'm not finding much in the way of settlement results (overshadowed by similar sounding, more recent news), but articles like this: http://goodereader.com/blog/commentary/agency-pricing-for-ebooks-returns-this-is-a-good-thing http://goodereader.com/blog/commentary/agency-pricing-for-eb... claim that the publishers were forced to abandon the agency model: "When the publishers all settled out of court they were forced to renegotiate their e-book distribution contracts with Amazon, Apple, Barnes and Noble, Kobo, Google and all of the other minor players." That article also says HarperCollins since returned to it, and this one: http://www.digitalbookworld.com/2014/simon-schuster-strikes-amazon-deal-reviving-agency-ebook-pricing/ http://www.digitalbookworld.com/2014/simon-schuster-strikes-... says Simon Schuster returned to it as well. I'm not sure about the others.

6stringmerc 11y ago

>Apple did not conspire to fix e-book pricing and this ruling does nothing to change the facts We are disappointed the Court does not recognize the innovation and choice the iBooks Store brought for consumers. While we want to put this behind us, the case is about principles and values. We know we did nothing wrong back in 2010. Unless I've read patently false accounts of the behavior, discussions, and conduct of Steve Jobs on behalf of Apple circa the iBooks store preparation and roll-out, this is one of the most laughably false statements that a lawyer has put to paper in 2016. The year is still early though.

coldtea 11y ago
>Unless I've read patently false accounts of the behavior, discussions, and conduct of Steve Jobs on behalf of Apple circa the iBooks store preparation and roll-out, this is one of the most laughably false statements that a lawyer has put to paper in 2016. You've probably indeed heard patently false accounts. What practice exactly do you think constituted price-fixing, based on the accounts you've read?
tehwebguy 11y ago
Price fixing doesn't just mean the fixed their own price, otherwise the dollar store would be in trouble. When Amazon has 90% of the market it's silly to call what Apple did price fixing. Apple didn't work with competitors to fix prices for consumers, they told publishers to get on board or get bent. That should be an option every company has, unless they own the market, IMO. Edit: Somehow typed the word "eBay" instead of the word "what" - for THAT I do blame Apple ;)
- Oletros 11y ago
  > Apple didn't work with competitors to fix prices for consumers No, they worked with publishers to fix the prices for consumers
  - andrewstuart2 11y ago
    Right, they didn't have to work directly with their competitors; they went above their heads.

WalterBright 11y ago

I find the modern view of monopoly peculiar: "the market for retail distribution of electronic books ... was essentially a monopoly, with Amazon.com ... controlling 90% of e-book sales. Amazon sold many of the most popular e-books at a loss, making it difficult for other retailers to enter the e-book market as they 'would run the risk of losing money if [they] tried." along with the 1999 conviction of Microsoft being a monopoly in part because they gave away Explorer. A monopoly is historically identified with having a higher than market price, not a lower.

frandroid 11y ago
Correlation is not causation, etc.
Caprinicus 11y ago
If you have a higher than market price, then other players can come in and disrupt your monopoly. If you are selling stuff at a loss to drive other players out of the market, then it is impossible for a new player to get off the ground. The definition has more to do with what is in the long term detrimental to the market's diversity.
- WalterBright 11y ago
  What price to charge? 1. higher - gouging, profiteering, monopolistic rents 2. same - collusion, price fixing 3. lower - unfair competition, predatory pricing All are illegal!
  - dhimes 11y ago
    None is illegal if you don't have a monopoly.
    - WalterBright 11y ago
      So if you do have a monopoly, what is the legal price to charge?

cm2187 11y ago

When I think of how much shit a bank would get for a headline like that...

whitegrape 11y ago

Cool, nearly half a billion in repatriated money that won't be shuffled to offshore accounts...

bladerunner82 11y ago

Mere beer money...

bpodgursky 11y ago
Relative to what they actually made off of ebooks? Unlikely although I don't have numbers offhand.
- bladerunner82 11y ago
  Relative to the company as a whole. Stuff like this is built in to the slush fund as "hazard" money. The shareholders could care less. Apple has more money than the African continent. I doubt anyone is overly worried.
sangnoir 11y ago
Why does that sound so much like a kid saying "That didn't hurt" while furiously rubbing the punched arm? Apple cared enough to try and appeal the case to the highest possible level (SCOTUS). To paraphrase a commenter on Ars Technica: $500,000,000 is a lot of iPads/MacBooks sold. All down the drain due to anti-consumer shenanigans.
- Qwertious 11y ago
  Apple would appeal a $1,000,000 court case until and unless they expected to lose more money by fighting it than by just paying the fine. And essentially, $500mil is more than enough money for keeping on some lawyers for half a decade. Still, it's worth comparing to how much money they make. So, a half-billion fine once in the last few years, and they made $18billion this quarter: http://moneymorning.com/2016/01/26/q1-apple-earnings-2016/ http://moneymorning.com/2016/01/26/q1-apple-earnings-2016/ I honestly don't see Apple being seriously hurt by this.
  - sangnoir 11y ago
    Apple partisans act as if the money is coming from Apple's petty-cash drawer. My point is somewhat similar to your: in that they would do anything not to pay the half a million dollars. Comparing to the numbers in their last FY (Oct '15), the settlement is 0.94% of their annual profit. I too wouldn't be "hurt" by a 1% fine of my net annual income, but I'd rather put it to better use.

Arzh 11y ago

Well if Apple felt that Amazon was acting as a monopoly, and unfairly blocking them from entering the market with low prices why did they not request an investigation from the FTC instead of doing something they knew was illegal?

tyre 11y ago
For the same reason Uber did not try to fight taxi regulation in every local municipality instead of doing what they knew to be illegal. Litigation takes a really long time. By the time you win, you've lost. Jobs wanted to launch iBooks right now and was willing to cut corners to get what he wanted.
- johnloeber 11y ago
  By the time you win, you've lost. Nicely put. I'll note that phrase down for future use.
- sangnoir 11y ago
  I wish we could create a "Galt's Gulch" and quarantine all the toxic individuals/entities who believe that the rules don't apply to them. They would be free to "cut corners" and "win" to their hearts content only amongst themselves.
  - andyfleming 11y ago
    Sometimes innovation requires breaking rules. Uber wouldn't have had the success it's had if it had gone through "proper" channels. While it made them successful, I'd argue that it also benefited consumers.
    - saalweachter 11y ago
      "It also benefited consumers" is not a get out of jail free card. If I break into warehouses, steal merchandise by the truckload, and sell it at a tenth the price, that also benefits my consumers.

idibidiart 11y ago

Retribution for standing up to the tyranny?

maxxxxx 11y ago

Maybe the case has merit or not but I am really tired of just imposing fines. We have reached a point where big companies and banks can do whatever they want and the worst thing that can happen is to pay a small portion of their earnings. Basically they are outside the law.

blisterpeanuts 11y ago
What harm has been demonstrated by this supposed conspiracy to set prices? Do you pay one penny more for your e-books? I don't. The whole thing seems like a technicality, a violation of a 110-year-old law that was never intended to cover this type of complex digital transaction.
- maxxxxx 11y ago
  It's a law. A lot of laws are old and don't apply to the present anymore but the little guy still has to obey them. They can lobby for a law change but it's not acceptable that people/entities with lots of money can decide which laws they obey and which not.
  - sjwright 11y ago
    Everyone makes that decision every hour of the day. We're all constantly breaking one obscure law or another.
    - RodericDay 11y ago
      Tolerance of this kind of situation is what pushes North America closer and closer to Kafkaesque nightmares though.
      - donatj 11y ago
        Tolerance of victimless crimes that hurt no one is a Kafkaesque nightmare?

deleted 11y ago

[deleted]

seanp2k2 11y ago

450 mil for this but 1.3 for Verizon super cookies, and Verizon doesn't even have to stop doing it. I guess Apple should hire better lobbyists.

madaxe_again 11y ago
They did just embarrass and piss off the federal government - $449M of this along with "no appeals sorry" probably sits under the heading "revenge".
- Sanddancer 11y ago
  The supreme court is rather independent of the executive branch and of law enforcement. Furthermore, this was an appeal of an appellate court's ruling that occurred last year. Keep in mind that the Supreme Court primarily concerns itself with cases that potentially set or clarify precedence. As they didn't feel that any new legal ground would be made here, they didn't take the case.

programminggeek 11y ago

Notice how authors get lost in this? Apple + 5 major publishers vs. Amazon. What a joke. As an author it's a great time to self publish and make it work on your own, but I find it absurd that ANY of those companies would attempt to dictate the price of books. P.S. You can read my book about creative work for free here: http://brianknapp.me/books/creative-pursuit/ http://brianknapp.me/books/creative-pursuit/ I talk about the importance of Self Publishing in Chapter Four.

xchaotic 11y ago

Can you correct me if I'm wrong but now Apple can repatriate some of it massive overseas cash hoard and offset it against the $450M fine without attracting any tax on it as it is a loss. technically their balance books will be $450M worse off but they wouldn't have been able to use that money anyway without attracting a high tax on it. is that correct?

delinka 11y ago
I'm pretty certain they're taxed on the money simply because it crosses a border. It's not treated as revenue which can be offset by expenses.

univalent 11y ago

They probably have this in petty cash. What use is a fine of this amount? It is like fining a football player 1500 for an illegal hit.

Johnnybe 11y ago

Price fixing. Salary fixing. H1B fixing. Fuck you Apple.

gdilla 11y ago

Apple is actually innocent here. What Apple wanted was the dinosaur publishing industry to adopt the agency model for pricing ebooks. The publisher sets the price, and revenue is split 70/30. This was the model for all digital goods on iTunes for the previous decade. The publishing industry had always been a wholesale model. They set the 'list' price on the book jacket, and the retailer would 'discount' it to the consumer. The retailer would pay the publisher the wholesale price, which was about 50% of list. Amazon loved the wholesale model because they compete on price. Amazon, at the time, was trying to create an expectation for consumers that all ebooks were $9.99. What the consumer didn't know was that Amazon was taking a loss on each ebook. Amazon was able to get publishers on board with their plan by paying the 'list' price on an ebook, and turning around and selling it for a loss at 9.99. Amazon's long play was 1) creating a market for ebooks in a price band they thought was attractive and 2) forcing the publishers to capitulate later when they had more leverage. Amazon never wanted agency pricing since they would lose their competitiveness if it ever came to bare. But Apple was successful - it eventually got publishers to adopt agency pricing, and that also meant Amazon ebooks had to adopt agency pricing (if you're setting the price, you can't give one outlet a better price). Amazon hated this development and championed this price fixing suit as a result. If you ever wondered why physical books are priced less than ebooks at times, this is why. Agency pricing.

jsight 11y ago
> Apple is actually innocent here. Ok, I get that they were going up against a monopolist who appears to be dumping. In what world does responding to that by building a cartel of suppliers engaging in monopolistic behavior to raise the pricing above the price of physical books and fix the pricing across all retailers turn into "innocence"? We as consumers are worse off for what Apple did here.
- gdilla 11y ago
  I'm not so sure that ever came to pass. I think all Jobs was saying is, if you don't adopt agency pricing, the value of your goods will be artificially low. If you adopt agency pricing, you can keep it high (that is, the same as physical).

scottfits 11y ago

The eBook fixing collusion is so obvious. I remember when eBooks where $4 because it makes sense -- no printing, no shipping, that's what it should cost. Now it's $16.99 for some eBook, and I think it's a disgrace because authors and customers get screwed with the rigged pricing.

Retra 11y ago
You're not paying for shipping and printing, you're paying for writing. If you want a shipment of bound, blank pages, you can get that for $4 any time.
- flavor8 11y ago
  Uh, no. You're paying for middlemen (printing, marketing, big publishing, etc) . Authors typically take 10 to 15%, either of royalties or net profit.
  - Retra 11y ago
    I've never paid for a printed ebook.
    - flavor8 11y ago
      Well no shit. You were arguing that the significant portion of the cost of physical books is the writing. It's not.
      - Retra 11y ago
        No, I was arguing that one should not expect ebooks should not be massively cheaper than paper books just because they aren't printed. There's still a lot to pay for.

donatj 11y ago

Can I get an honest explanation of why what they did was "bad"? They set the price of products they sell in conjunction with the publishers? Isn't that what every major seller of goods does? I watched a documentary on Wal-Mart a while back where they were working with Chinese DVD player mfgs to get the price Wal-Mart wanted. I genuinely don't understand the harm of their actions, and would be thrilled if someone could explain?

prasadjoglekar 11y ago
Short answer: Publishers were too weak individually to challenge Amazon's ebook business model (the wholesale version). If all the publishers colluded to stop selling to Amazon, that would be a violation of the anti-trust act. Apple comes along and writes contracts with each publisher such that in aggregate the contracts provide the cover to do exactly what the publishers could not do on their own. The harm in the short term was to Amazon - under threat of being cut off by every publisher, it would have forced Amazon to move to a different model of pricing. The follow on effect would be to raise prices for all consumers.

legulere 11y ago

Meanwhile in most of Europe we have (e-)book price fixing by law: https://en.wikipedia.org/wiki/Fixed_book_price_agreement https://en.wikipedia.org/wiki/Fixed_book_price_agreement

bipin_nag 11y ago

The news is fine but why drag Amazon into it? >At Amazon headquarters, however, they're probably popping open the champagne. >Amazon, however, is probably grinning like the Cheshire Cat. The author is not doing justice to his job as a reporter. If you want to opine then separate it from the facts. Amazon which has nothing to do with the ruling gets depicted as a villain and Apple which actually is guilty doesn’t get its share of bad words. What is worse is that he starts to paint Amazon that way before he gives any of the details of ruling.

studentrob 11y ago
I do not think Amazon looks like a villain in the article. Good guys drink champagne too, and the Cheshire Cat was not a bad guy, he was neutral. It is relevant to mention Amazon. Although Amazon isn't named in the case, Apple was competing with Amazon directly by offering publishers a service through which they can set their own prices. With Amazon, publishers don't set the price of books, Amazon does. The ruling does effect Amazon's business. They have one less competitor model to worry about.
- tantalor 11y ago
  > the Cheshire Cat was not a bad guy, he was neutral This checks out. https://s-media-cache-ak0.pinimg.com/736x/af/20/c6/af20c61ffdaaf42a4e0d4a6c77856089.jpg https://s-media-cache-ak0.pinimg.com/736x/af/20/c6/af20c61ff...
mhaymo 11y ago
Not that I disagree with your point, but it's not true that Amazon had "nothing to do with the ruling". According to Wikipedia, they were the original complainants: > Shortly after January 31, Amazon sent a letter to the Federal Trade Commission complaining about the simultaneous nature of the demands for agency model agreements from the Publishers who had signed with Apple. https://en.wikipedia.org/wiki/United_States_v._Apple_Inc https://en.wikipedia.org/wiki/United_States_v._Apple_Inc.
rjbwork 11y ago
>The author is not doing justice to his job as a reporter. If you want to opine then separate it from the facts. Implying internet bloggers are reporters. The prestige of the journalist today is in the toilet because the barrier to entry is essentially nil. You can just start writing for some fly by night site and get hundreds to thousands of readers overnight, without any basic understanding of the profession or established practices.

​Apple gets smacked by $450M e-book price-fixing fine

​Apple gets smacked by $450M e-book price-fixing fine

Apple gets smacked by $450M e-book price-fixing fine

Apple gets smacked by $450M e-book price-fixing fine