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The agency model has something called "most favored nation" which forces the same retail price on all channels and retailers.

by dilemma 11y ago

acqq 11y ago
So is opening the store based on an agency model illegal? Is illegal being willing to sell the stuff in the own store for a higher price? By which laws? What was the actual illegal step in the process of opening their new store that Apple have made? Why shouldn't they be able to offer a different deal to the publishers than what Amazon have offered? > The agency model has something called "most favored nation" "Most Favored Nation" clause, as stated in the court document: http://dearauthor.com/wp-content/uploads/2013/07/Cote-Decision-on-Price-Fixing.pdf http://dearauthor.com/wp-content/uploads/2013/07/Cote-Decisi... "The MFN guaranteed that the e-books in Apple’s e-bookstore would be sold for the lowest retail price available in the marketplace." Why shouldn't be Apple able to propose that in its contract? It's on publishers to accept it or not. It was obviously the opposite of "raising prices" it was a protection for the Apple book store to remain competitive. Why should Apple be responsible for what the publishers do with their own contracts to Amazon once the Apple's store opens? Of course the existence of Apple's store changes the market conditions, and why shouldn't it?
- dilemma 11y ago
  Apple set a specific price ($16.99 or so) for iBooks, then used MFN to make sure that that was the "lowest" price, effectively increasing prices elsewhere from say $9.99 to the same $16.99. That is, they fixes the price at a higher level than before.
  - acqq 11y ago
    Weren't the publishers those that set the price? Apple just agreed not to insist on low prices like Amazon (it's in the court decision). As far as I understand, the publishers weren't able to increase the prices by Amazon until they renegotiated their deals with Amazon. Why should Apple be guilty that the publishers made new, what they saw as better for them deals with Amazon once the Apple's store opened? It's the Amazon that got the competition at that moment, not that Apple behaved anti-competitive. Amazon effectively haven't had any competition before. Once it had, the publishers wee able to renegotiate.
    - dilemma 11y ago
      If you really want to know, there's enough articles available on Google from the past several years to make it crystal clear. My above is the condensed version. None of the things you bring up are correct.
      - acqq 11y ago
        Can you please quote anything specific? I'm actually reading and quoting the 2013 court decision and I can't find the logic of it. See my other comments here for examples. I can also quote the parts that prove that your interpretation doesn't hold -- Apple didn't "fix" the prices, just agreed to sell for the prices that the publishers preferred. Even the agency model was a suggestion from the publishers that Apple accepted, but why shouldn't they? "Every Publisher with whom Apple met lamented Amazon’s pricing New Releases and NYT Bestsellers at $9.99. Several of them made clear that they were actively searching for a way to gain more control over pricing and were implementing tactics they did not enjoy, like windowing." "As Apple had expressed to the Publishers, it strongly believed that withholding content would interfere with the growth of the digital market and was inconsistent with its business goals and practices. Apple thus embraced the model that Hachette and HarperCollins had proposed -– the agency model. Apple was already familiar with this model since it used the agency model to sell apps through its App Store." Edit: just posting a link to some newspaper article doesn't prove anything. Under "specific" I mean a "specific proof" that somehow negates the quotes from the court decision I've presented or shows them in completely new light.
        dilemma 11y ago
        https://www.washingtonpost.com/news/wonk/wp/2013/07/10/a-judge-says-apple-fixed-e-book-prices-this-chart-shows-how-they-did-it/ https://www.washingtonpost.com/news/wonk/wp/2013/07/10/a-jud...
        Pyxl101 11y ago
        If you want to know, then here's a starting point: https://www.justice.gov/atr/case-document/file/486701/download https://www.justice.gov/atr/case-document/file/486701/downlo... - it demonstrates clear and specific proof of the leading role that Apple played in proposing the collusion and actually bringing it about. See my other comment in this thread, where I highlight some of the illustrative quotes from the principals involved.
- studentrob 11y ago
  > So is opening the store based on an agency model illegal? I don't think it is. There's an opportunity for some store to do that. For what it's worth, I agree with you that it isn't so cut and dry that Apple set out to fix prices or do evil here. They were simply one gateway to higher prices desired by publishers. Selling electronic goods is sufficiently different from selling tangible goods to warrant additional consideration beyond existing case law. I think the DOJ/government finds Apple difficult to work with. During the encryption congressional hearing, Trey Gowdy was begging Apple to lobby for legislation, or come up with their own new legislation. It was disgusting. The DOJ and our Congress do not understand technology and it hurts the industry.
tzs 11y ago
Amazon also has a "most favored nation" clause in its contracts with publishers.
- dilemma 11y ago
  Amazon uses MFN to be able to match the lowest price available. Apple uses MFN to fix prices so that nobody sells the same titles for less than they do.
  - acqq 11y ago
    > Apple uses MFN to fix prices It didn't work that way: the publishers renegotiated their deals with Amazon, it was they who wanted it differently. They were able to sell for 9.99 if they wanted. Apple was just "ready to sell for more," contrary to Amazon who insisted on selling for 9.99 no matter what.
    - dilemma 11y ago
      No. MFN in combination with the five-publisher collusion orchestrated by Apple let them negotiate to increase prices. https://www.washingtonpost.com/news/wonk/wp/2013/07/10/a-judge-says-apple-fixed-e-book-prices-this-chart-shows-how-they-did-it/ https://www.washingtonpost.com/news/wonk/wp/2013/07/10/a-jud...
      - acqq 11y ago
        From the court decision: "It was as apparent to the Publishers as it was to Apple that Apple’s proposal would only allow the Publishers to raise the consumer prices for e-book versions of their key titles above Amazon’s $9.99 price point to the proposed price caps if they moved Amazon and their other e-tailers to agency." "During this week, Amazon had a long-scheduled set of meetings in New York with the Publishers. In separate conversations on January 20 and over the next few days, the Publisher Defendants all told Amazon that they wanted to change to an agency distribution model with Amazon." I don't see anything else but that Apple negotiated the deals which pleased the publishers. They did what they believed they had to do (introduce higher prices) even before Apple. That it was "apparent to Apple" doesn't mean guilt, for me. That the prices raised doesn't prove more but that the publishers wanted them higher and were able to set them.
tehwebguy 11y ago
That is not what I've read, but rather it merely allows Apple to match lower prices elsewhere for the same product, so I still don't see how this could be price fixing.
- acqq 11y ago
  > it merely allows Apple to match lower prices elsewhere for the same product Exactly, and I quote the exact formulation of MFN from the court's decision in my other (possibly harder to read) comment here.
- dilemma 11y ago
  Apple used MFN to ensure that nobody sold the same books for less, fixing prices at a higher level.
  - acqq 11y ago
    How did it "ensure"? The publishers were absolutely able to sell at Amazon and Apple for 9.99 if they wanted, but they didn't. The publishers even before Apple arrived tried various steps to change their deals with Amazon and let it sell for more, they just haven't had any negotiation power. From the court document: "Well aware of the Publishers’ experimentation with windowing, Apple also told Publishers that it opposed windowing; it believed that withholding e-books alienated customers and led to piracy." It was one attempt of the publishers before.
    - dilemma 11y ago
      Their power to negotiate came from the collusion that Apple orchestrated. This makes it very clear: https://www.washingtonpost.com/news/wonk/wp/2013/07/10/a-judge-says-apple-fixed-e-book-prices-this-chart-shows-how-they-did-it/ https://www.washingtonpost.com/news/wonk/wp/2013/07/10/a-jud...
      - acqq 11y ago
        The fact that the prices raised doesn't prove anything to me (that's the only thing I see in the article). Of course the publishers got more power with the new store. Of course they wanted to sell at higher prices even before Apple appeared, but couldn't, because Amazon didn't have real competition. What was Apple supposed to do? To open the exact same store as Amazon? Why? And how was Apple doing anything what the publishers didn't do themselves? The CEO's had their meetings without Apple, even before, as I've already quoted. And after the meetings with Cue, they continued. Cue didn't organize them: "After Young had met with Apple but before S&S had its meeting, Young could not resist calling Reidy to share the wonderful news that the “Top Man” at Apple opposed $9.99 pricing. He hesitated to say more because S&S would be meeting with Apple the following day, and he did not want to “spoil [the] fun.”" It's obvious the publishers communicated, but I don't see Apple's guilt. All my quotes here and in other posts here are from the court decision.

The agency model has something called "most favored nation" which forces the same retail price on all channels and retailers.

by dilemma 11y ago

The agency model has something called "most favored nation" which forces the same retail price on all channels and retailers.

acqq 11y ago

So is opening the store based on an agency model illegal? Is illegal being willing to sell the stuff in the own store for a higher price? By which laws? What was the actual illegal step in the process of opening their new store that Apple have made? Why shouldn't they be able to offer a different deal to the publishers than what Amazon have offered? > The agency model has something called "most favored nation" "Most Favored Nation" clause, as stated in the court document: http://dearauthor.com/wp-content/uploads/2013/07/Cote-Decision-on-Price-Fixing.pdf http://dearauthor.com/wp-content/uploads/2013/07/Cote-Decisi... "The MFN guaranteed that the e-books in Apple’s e-bookstore would be sold for the lowest retail price available in the marketplace." Why shouldn't be Apple able to propose that in its contract? It's on publishers to accept it or not. It was obviously the opposite of "raising prices" it was a protection for the Apple book store to remain competitive. Why should Apple be responsible for what the publishers do with their own contracts to Amazon once the Apple's store opens? Of course the existence of Apple's store changes the market conditions, and why shouldn't it?

dilemma 11y ago
Apple set a specific price ($16.99 or so) for iBooks, then used MFN to make sure that that was the "lowest" price, effectively increasing prices elsewhere from say $9.99 to the same $16.99. That is, they fixes the price at a higher level than before.
- acqq 11y ago
  Weren't the publishers those that set the price? Apple just agreed not to insist on low prices like Amazon (it's in the court decision). As far as I understand, the publishers weren't able to increase the prices by Amazon until they renegotiated their deals with Amazon. Why should Apple be guilty that the publishers made new, what they saw as better for them deals with Amazon once the Apple's store opened? It's the Amazon that got the competition at that moment, not that Apple behaved anti-competitive. Amazon effectively haven't had any competition before. Once it had, the publishers wee able to renegotiate.
  - dilemma 11y ago
    If you really want to know, there's enough articles available on Google from the past several years to make it crystal clear. My above is the condensed version. None of the things you bring up are correct.
    - acqq 11y ago
      Can you please quote anything specific? I'm actually reading and quoting the 2013 court decision and I can't find the logic of it. See my other comments here for examples. I can also quote the parts that prove that your interpretation doesn't hold -- Apple didn't "fix" the prices, just agreed to sell for the prices that the publishers preferred. Even the agency model was a suggestion from the publishers that Apple accepted, but why shouldn't they? "Every Publisher with whom Apple met lamented Amazon’s pricing New Releases and NYT Bestsellers at $9.99. Several of them made clear that they were actively searching for a way to gain more control over pricing and were implementing tactics they did not enjoy, like windowing." "As Apple had expressed to the Publishers, it strongly believed that withholding content would interfere with the growth of the digital market and was inconsistent with its business goals and practices. Apple thus embraced the model that Hachette and HarperCollins had proposed -– the agency model. Apple was already familiar with this model since it used the agency model to sell apps through its App Store." Edit: just posting a link to some newspaper article doesn't prove anything. Under "specific" I mean a "specific proof" that somehow negates the quotes from the court decision I've presented or shows them in completely new light.
      - dilemma 11y ago
        https://www.washingtonpost.com/news/wonk/wp/2013/07/10/a-judge-says-apple-fixed-e-book-prices-this-chart-shows-how-they-did-it/ https://www.washingtonpost.com/news/wonk/wp/2013/07/10/a-jud...
      - Pyxl101 11y ago
        If you want to know, then here's a starting point: https://www.justice.gov/atr/case-document/file/486701/download https://www.justice.gov/atr/case-document/file/486701/downlo... - it demonstrates clear and specific proof of the leading role that Apple played in proposing the collusion and actually bringing it about. See my other comment in this thread, where I highlight some of the illustrative quotes from the principals involved.
studentrob 11y ago
> So is opening the store based on an agency model illegal? I don't think it is. There's an opportunity for some store to do that. For what it's worth, I agree with you that it isn't so cut and dry that Apple set out to fix prices or do evil here. They were simply one gateway to higher prices desired by publishers. Selling electronic goods is sufficiently different from selling tangible goods to warrant additional consideration beyond existing case law. I think the DOJ/government finds Apple difficult to work with. During the encryption congressional hearing, Trey Gowdy was begging Apple to lobby for legislation, or come up with their own new legislation. It was disgusting. The DOJ and our Congress do not understand technology and it hurts the industry.

tzs 11y ago

Amazon also has a "most favored nation" clause in its contracts with publishers.

dilemma 11y ago
Amazon uses MFN to be able to match the lowest price available. Apple uses MFN to fix prices so that nobody sells the same titles for less than they do.
- acqq 11y ago
  > Apple uses MFN to fix prices It didn't work that way: the publishers renegotiated their deals with Amazon, it was they who wanted it differently. They were able to sell for 9.99 if they wanted. Apple was just "ready to sell for more," contrary to Amazon who insisted on selling for 9.99 no matter what.
  - dilemma 11y ago
    No. MFN in combination with the five-publisher collusion orchestrated by Apple let them negotiate to increase prices. https://www.washingtonpost.com/news/wonk/wp/2013/07/10/a-judge-says-apple-fixed-e-book-prices-this-chart-shows-how-they-did-it/ https://www.washingtonpost.com/news/wonk/wp/2013/07/10/a-jud...
    - acqq 11y ago
      From the court decision: "It was as apparent to the Publishers as it was to Apple that Apple’s proposal would only allow the Publishers to raise the consumer prices for e-book versions of their key titles above Amazon’s $9.99 price point to the proposed price caps if they moved Amazon and their other e-tailers to agency." "During this week, Amazon had a long-scheduled set of meetings in New York with the Publishers. In separate conversations on January 20 and over the next few days, the Publisher Defendants all told Amazon that they wanted to change to an agency distribution model with Amazon." I don't see anything else but that Apple negotiated the deals which pleased the publishers. They did what they believed they had to do (introduce higher prices) even before Apple. That it was "apparent to Apple" doesn't mean guilt, for me. That the prices raised doesn't prove more but that the publishers wanted them higher and were able to set them.

tehwebguy 11y ago

That is not what I've read, but rather it merely allows Apple to match lower prices elsewhere for the same product, so I still don't see how this could be price fixing.

acqq 11y ago
> it merely allows Apple to match lower prices elsewhere for the same product Exactly, and I quote the exact formulation of MFN from the court's decision in my other (possibly harder to read) comment here.
dilemma 11y ago
Apple used MFN to ensure that nobody sold the same books for less, fixing prices at a higher level.
- acqq 11y ago
  How did it "ensure"? The publishers were absolutely able to sell at Amazon and Apple for 9.99 if they wanted, but they didn't. The publishers even before Apple arrived tried various steps to change their deals with Amazon and let it sell for more, they just haven't had any negotiation power. From the court document: "Well aware of the Publishers’ experimentation with windowing, Apple also told Publishers that it opposed windowing; it believed that withholding e-books alienated customers and led to piracy." It was one attempt of the publishers before.
  - dilemma 11y ago
    Their power to negotiate came from the collusion that Apple orchestrated. This makes it very clear: https://www.washingtonpost.com/news/wonk/wp/2013/07/10/a-judge-says-apple-fixed-e-book-prices-this-chart-shows-how-they-did-it/ https://www.washingtonpost.com/news/wonk/wp/2013/07/10/a-jud...
    - acqq 11y ago
      The fact that the prices raised doesn't prove anything to me (that's the only thing I see in the article). Of course the publishers got more power with the new store. Of course they wanted to sell at higher prices even before Apple appeared, but couldn't, because Amazon didn't have real competition. What was Apple supposed to do? To open the exact same store as Amazon? Why? And how was Apple doing anything what the publishers didn't do themselves? The CEO's had their meetings without Apple, even before, as I've already quoted. And after the meetings with Cue, they continued. Cue didn't organize them: "After Young had met with Apple but before S&S had its meeting, Young could not resist calling Reidy to share the wonderful news that the “Top Man” at Apple opposed $9.99 pricing. He hesitated to say more because S&S would be meeting with Apple the following day, and he did not want to “spoil [the] fun.”" It's obvious the publishers communicated, but I don't see Apple's guilt. All my quotes here and in other posts here are from the court decision.