4 ms·

Amazon controlled 90% of the market share and was price dumping. It is dubious that they colluded too much, as they were buying from the sellers, which is liter

Amazon controlled 90% of the market share and was price dumping. It is dubious that they colluded too much, as they were buying from the sellers, which is literally how markets work. Amazon, and I am not joking, in an article called Amazon: We have 70-80 percent of e-book market[0] through there kindle chief makes that claim. Also credit suisse released a report prior claiming 90%[1] in the wall street journal. This article itself also links to 5 publishers in a signed statement within an amicus brief claiming these figures and that dumping was taking place. thus prices set above that of a 90% market concentration single actor, make it reasonable to assume that increasing prices is infact the market rate. Steve Jobs was a dick, maybe they were anti-competitive. I doubt they made 450million charging more than the market leader... http://www.cnet.com/news/amazon-we-have-70-80-percent-of-e-book-market/ http://www.cnet.com/news/amazon-we-have-70-80-percent-of-e-b... [1]http://blogs.wsj.com/marketbeat/2010/02/16/analyst-amazon-e-book-share-to-fall-from-90-to-35// http://blogs.wsj.com/marketbeat/2010/02/16/analyst-amazon-e-... Nearly everything here is fact. So i find it difficult to understand what is being objected to...

jonknee 11y ago
... And Apple arranged for all the big publishers to raise prices which is plain and simple price fixing.
- gwright 11y ago
  I probably know just enough about this to be dangerous, but offering a different pricing model isn't the same as colluding to force the same price, even if the model results in an increased price. Purchasing soda at a convenience store is more expensive than buying a 12-pack at the grocery store but I don't think 7-11 is entering into an illegal price-collusion scheme with Coke and Pepsi to raise prices on soda. The agency model allows each publisher to pick the price for their book at the seller takes a percentage. I'm still having a hard time wrapping my head around the idea that this is price fixing. It doesn't prevent other sellers from using other models (Amazon, wholesale model), or other sellers from using the agency model with a different 'cut' or for publishers to set different prices for their books. It the end, I think this action seems to have the unintended consequence of strengthening the control of Amazon rather than encouraging a competitive environment for book sellers.
  - jonknee 11y ago
    They didn't just offer a different pricing model, they colluded to get the whole market to raise ebook prices in all venues. The case has been argued or reviewed by every level of the Justice system and Apple has lost every time. They simply violated the Sherman act and the result was noticeably higher prices for the customer. Interestingly there are no apparent winners in the case because Apple hasn't had success selling ebooks and the new higher prices resulted in significantly less sales. https://en.wikipedia.org/wiki/United_States_v._Apple_Inc https://en.wikipedia.org/wiki/United_States_v._Apple_Inc.
    - gwright 11y ago
      > They didn't just offer a different pricing model, they colluded to get the whole market to raise ebook prices in all venues. Really? I'm pleading ignorance here but, for example, how could Apple's actions be considered collusion with Amazon (by itself a huge part of the market).
      - jacalata 11y ago
        I believe they meant the publisher market. I'm not aware of Amazon being accused of collusion in this matter at all.
      - sangnoir 11y ago
        > Really? I'm pleading ignorance here but, for example, how could Apple's actions be considered collusion with Amazon They colluded with Amazon's suppliers. To use your soda example: it's as if 7-11 were growing tired of Walmart door-busting with 1-dime sodas. So they collude with Coke and Pepsi and change the contract for all soda retailers to say "you can't sell soda at a price that you (the retailer) wants. You will sell the soda on our behalf at a price we want"
  - ambrice 11y ago
    As I understand it: So let's say there's 6 major publishers because I'm too lazy to look up the correct number. If apple had approached one of them individually and offered them the same deal and they had agreed everything would have been fine. But individually it looks pretty bad. The result would be that on Amazon (where 90% of the sales come from) the one publishers books would be available for $12.99 and 5 other publishers books would be available for $9.99 and they wouldn't compete. So individually the publishers would have turned them down. The illegal part comes in where Apple tells the publisher "Don't worry, we have talked to all the other publishers and they've agreed to the same deal so you won't have to worry about competing." Just like it would be illegal for all the CEOs to get together and agree on one price. It's not suddenly legal just because a third party is facilitating the price fixing.

jonknee 11y ago

... And Apple arranged for all the big publishers to raise prices which is plain and simple price fixing.

gwright 11y ago
I probably know just enough about this to be dangerous, but offering a different pricing model isn't the same as colluding to force the same price, even if the model results in an increased price. Purchasing soda at a convenience store is more expensive than buying a 12-pack at the grocery store but I don't think 7-11 is entering into an illegal price-collusion scheme with Coke and Pepsi to raise prices on soda. The agency model allows each publisher to pick the price for their book at the seller takes a percentage. I'm still having a hard time wrapping my head around the idea that this is price fixing. It doesn't prevent other sellers from using other models (Amazon, wholesale model), or other sellers from using the agency model with a different 'cut' or for publishers to set different prices for their books. It the end, I think this action seems to have the unintended consequence of strengthening the control of Amazon rather than encouraging a competitive environment for book sellers.
- jonknee 11y ago
  They didn't just offer a different pricing model, they colluded to get the whole market to raise ebook prices in all venues. The case has been argued or reviewed by every level of the Justice system and Apple has lost every time. They simply violated the Sherman act and the result was noticeably higher prices for the customer. Interestingly there are no apparent winners in the case because Apple hasn't had success selling ebooks and the new higher prices resulted in significantly less sales. https://en.wikipedia.org/wiki/United_States_v._Apple_Inc https://en.wikipedia.org/wiki/United_States_v._Apple_Inc.
  - gwright 11y ago
    > They didn't just offer a different pricing model, they colluded to get the whole market to raise ebook prices in all venues. Really? I'm pleading ignorance here but, for example, how could Apple's actions be considered collusion with Amazon (by itself a huge part of the market).
    - jacalata 11y ago
      I believe they meant the publisher market. I'm not aware of Amazon being accused of collusion in this matter at all.
    - sangnoir 11y ago
      > Really? I'm pleading ignorance here but, for example, how could Apple's actions be considered collusion with Amazon They colluded with Amazon's suppliers. To use your soda example: it's as if 7-11 were growing tired of Walmart door-busting with 1-dime sodas. So they collude with Coke and Pepsi and change the contract for all soda retailers to say "you can't sell soda at a price that you (the retailer) wants. You will sell the soda on our behalf at a price we want"
- ambrice 11y ago
  As I understand it: So let's say there's 6 major publishers because I'm too lazy to look up the correct number. If apple had approached one of them individually and offered them the same deal and they had agreed everything would have been fine. But individually it looks pretty bad. The result would be that on Amazon (where 90% of the sales come from) the one publishers books would be available for $12.99 and 5 other publishers books would be available for $9.99 and they wouldn't compete. So individually the publishers would have turned them down. The illegal part comes in where Apple tells the publisher "Don't worry, we have talked to all the other publishers and they've agreed to the same deal so you won't have to worry about competing." Just like it would be illegal for all the CEOs to get together and agree on one price. It's not suddenly legal just because a third party is facilitating the price fixing.