7 ms·

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.

by dilemma 11y ago

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.
    - Pyxl101 11y ago
      If you look at emails and communication from people involved, it seems pretty clear to me that Apple knowingly and actively participated in a conspiracy to fix prices. They really took the leading role in organizing the publishers and proposing the illegal-price fixing model. I will give you an overwhelming amount of evidence just in one comment, and a link to explore further details. "From: Eddy Cue To: Steve Jobs Subject: Books - Publisher update Date: Tue, 15 Dec 2009 Steve, [...] Clearly, the biggest issue is new release pricing and they [the publishers] want a proposal from us. Everyone was estatic to see Apple and what it could mean for their industry." ... "They decided they had to come up with a way that would move the whole market off 9.99 and they think an agency model is the only way to do it." "They believe that this is the best chance for publishers to challenge the 9.99 price point ...." Clearly and explicitly recognizing that collusion is the only way to achieve the price that they desire. ... "I am told Random House is concerned about the future of e-books and the potentially dominant role played by Google and Amazon. Would it make sense for the 2 of us to have meetings / diner with Markus Dohle, Brian Murray, John Sargent..." Conspiracy to meet and fix prices. Collusion like this across competitors is illegal price fixing. Competitors do not have a legitimate reason to meet and discuss common pricing. ... "You are absolutely correct: we've always known that unless other publishers follow us, there's no chance in getting Amazon to change its pricing practices." ... "It is important to Apple that there be 'some level of reasonable pricing'. They feel the only way to get this is for the industry to go to the agency model." (additional illegal collusion to fix prices) "When they thought it through, they didn't think anything else would keep the market from its current pricing 'craziness'" (i.e., market prices -- demonstrating conspiracy to fix prices) "[Eddy Cue, Apple] also thinks that book prices are becoming too low - he is worried about consumer perception. Therefore he suggests an 'agency model'". ... "To: Carolyn Reidy (Simon & Shuster) From: Eddy Cue (Apple) Subject: iTunes Date: Mon, 04 Jan 2010 "[...] As we discussed, here is what I think is the best approach for ebooks. Just like the App Store, we are proposing a principal-agency model [...]" The same email is repeated and sent to Markus Dohle of Random House, and then John Sargent of Macmillan, and very similarly to David Young of Hachette Book Group. "After talking to all the other publishers and seeing the overall book environment, here is what I think is the best approach for ebooks", Eddy Cue wrote to David Young, and to David Shanks of Penguin, and Brian Murray of Harper Collins. He goes on to outline the illegal price fixing scheme which they successfully colluded to implement. ... Additional points that establish the case: - Additional emails go on to demonstrate how the model will be forced on all retails and result in the price fixing - Graphs of data of how prices changed over time as Apple deployed its price-fixing scheme. - Apple provides information about one competitor's prices and desires to another, explicitly communicating one competitor's pricing desires to the other. - Evidence of collusion as copy/pasted statements make their way into material from several publishing house leaders, all on the same day following meetings with Apple. - "Agency is anti-price war territory." Yup. - Clear recognition by the competitors that they were engaging in illegal price fixing. "We would have to 'get everyone else to go to the agency model'. When I said, 'but of course we can't talk to our competitors', [Eddy Cue] said he didn't mean other publishers, but our accounts - to which I replied, if we make these our terms, then they are our terms." Carolyn Reidy, discussing her deal with Apple to other people. - Additional evidence of Apple taking an active role in conducting these discussions with publishers and bringing about the actual consensus of getting them all to agree to it. Apple was the common party that actually brought the coordination about by facilitating the conversation and proposing the actual price fixing terms. - Publishers recognize that their deals with Apple force them to an agency model for all sales. - One publisher balks about being forced to do this. Apple enlists other publishers to convince them. Further publishers are waiting for other publishes to agree, before they agree to terms with Apple (collusion; they should be making deals independently) United States of America v. Apple, Inc. - https://www.justice.gov/atr/case-document/file/486701/download https://www.justice.gov/atr/case-document/file/486701/downlo... I think the evidence is pretty overwhelming. Have you examined the actual data? I hope this provides a good starting point. (These conspiracies to fix prices seem common for Silicon Valley companies, don't they? Apple and other tech companies were similarly involved in antitrust litigation: https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L... )

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.

by 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.
  - Pyxl101 11y ago
    If you look at emails and communication from people involved, it seems pretty clear to me that Apple knowingly and actively participated in a conspiracy to fix prices. They really took the leading role in organizing the publishers and proposing the illegal-price fixing model. I will give you an overwhelming amount of evidence just in one comment, and a link to explore further details. "From: Eddy Cue To: Steve Jobs Subject: Books - Publisher update Date: Tue, 15 Dec 2009 Steve, [...] Clearly, the biggest issue is new release pricing and they [the publishers] want a proposal from us. Everyone was estatic to see Apple and what it could mean for their industry." ... "They decided they had to come up with a way that would move the whole market off 9.99 and they think an agency model is the only way to do it." "They believe that this is the best chance for publishers to challenge the 9.99 price point ...." Clearly and explicitly recognizing that collusion is the only way to achieve the price that they desire. ... "I am told Random House is concerned about the future of e-books and the potentially dominant role played by Google and Amazon. Would it make sense for the 2 of us to have meetings / diner with Markus Dohle, Brian Murray, John Sargent..." Conspiracy to meet and fix prices. Collusion like this across competitors is illegal price fixing. Competitors do not have a legitimate reason to meet and discuss common pricing. ... "You are absolutely correct: we've always known that unless other publishers follow us, there's no chance in getting Amazon to change its pricing practices." ... "It is important to Apple that there be 'some level of reasonable pricing'. They feel the only way to get this is for the industry to go to the agency model." (additional illegal collusion to fix prices) "When they thought it through, they didn't think anything else would keep the market from its current pricing 'craziness'" (i.e., market prices -- demonstrating conspiracy to fix prices) "[Eddy Cue, Apple] also thinks that book prices are becoming too low - he is worried about consumer perception. Therefore he suggests an 'agency model'". ... "To: Carolyn Reidy (Simon & Shuster) From: Eddy Cue (Apple) Subject: iTunes Date: Mon, 04 Jan 2010 "[...] As we discussed, here is what I think is the best approach for ebooks. Just like the App Store, we are proposing a principal-agency model [...]" The same email is repeated and sent to Markus Dohle of Random House, and then John Sargent of Macmillan, and very similarly to David Young of Hachette Book Group. "After talking to all the other publishers and seeing the overall book environment, here is what I think is the best approach for ebooks", Eddy Cue wrote to David Young, and to David Shanks of Penguin, and Brian Murray of Harper Collins. He goes on to outline the illegal price fixing scheme which they successfully colluded to implement. ... Additional points that establish the case: - Additional emails go on to demonstrate how the model will be forced on all retails and result in the price fixing - Graphs of data of how prices changed over time as Apple deployed its price-fixing scheme. - Apple provides information about one competitor's prices and desires to another, explicitly communicating one competitor's pricing desires to the other. - Evidence of collusion as copy/pasted statements make their way into material from several publishing house leaders, all on the same day following meetings with Apple. - "Agency is anti-price war territory." Yup. - Clear recognition by the competitors that they were engaging in illegal price fixing. "We would have to 'get everyone else to go to the agency model'. When I said, 'but of course we can't talk to our competitors', [Eddy Cue] said he didn't mean other publishers, but our accounts - to which I replied, if we make these our terms, then they are our terms." Carolyn Reidy, discussing her deal with Apple to other people. - Additional evidence of Apple taking an active role in conducting these discussions with publishers and bringing about the actual consensus of getting them all to agree to it. Apple was the common party that actually brought the coordination about by facilitating the conversation and proposing the actual price fixing terms. - Publishers recognize that their deals with Apple force them to an agency model for all sales. - One publisher balks about being forced to do this. Apple enlists other publishers to convince them. Further publishers are waiting for other publishes to agree, before they agree to terms with Apple (collusion; they should be making deals independently) United States of America v. Apple, Inc. - https://www.justice.gov/atr/case-document/file/486701/download https://www.justice.gov/atr/case-document/file/486701/downlo... I think the evidence is pretty overwhelming. Have you examined the actual data? I hope this provides a good starting point. (These conspiracies to fix prices seem common for Silicon Valley companies, don't they? Apple and other tech companies were similarly involved in antitrust litigation: https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L... )