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The allegations stem from the agency model that was forced on Amazon by the big six publishers when the iPad launched. Previous to that model, Amazon treated eB

The allegations stem from the agency model that was forced on Amazon by the big six publishers when the iPad launched. Previous to that model, Amazon treated eBooks like they did everything else -- they'd buy them at a wholesale price and then sell them at whatever price they wanted. That included, to my understanding, selling them at a loss so they could sell more Kindle hardware. Under the agency model, the publisher sets the retail price instead of the wholesale price. So Amazon now has to sell it at that price. This is probably different than the deal you got with Amazon since you don't have the leverage that the big six have. The agency model also includes other stipulations to protect the traditional publishing model. One example is that many eBooks don't launch for several weeks after the hard cover books. My understanding from listening to Robb Wolf and Tim Ferris talk about their recent book launches is this helps the NY Times Best Seller rating in some way. As a consumer, I use Amazon for their discounted prices. Recently when I wanted a book, I could pay $49.99 at the local B&N or $32.95 at Amazon plus $3.99 for one-day shipping. However, had I wanted to get the same book in digital format, my options were $39.99 at Amazon or $39.99 at Barnes & Noble.

nirvana 15y ago
How was the agency model forced on Amazon? Apple offered a better deal, and if I recall correctly, even before the iBooks Store had launched, Amazon changed their terms to offer the same deal. Amazon offered this same deal to everyone, including us. I'm not under a misunderstanding of what the deals are... I think you believed what you read in this press release and took it at face value. A "model" cannot include "other stipulations". It is simply a broad description of an arrangement. There are many books that are not available for the Kindle or on iBooks, and it has been many years since they were published. In short, the linked to article is FUD, Amazon chose to meet Apple's terms because they rightly recognized they were more competitive. I agree, it is stupid that you can buy the physical book for less than the ebook. However, no matter how stupid it is, it isn't price fixing.
- capnrefsmmat 15y ago
  Amazon chose to meet the publishers' terms because publishers began to withdraw books from Amazon: > Macmillan CEO John Sargent had been meeting with Amazon to discuss getting full control over e-book prices, but Amazon refused to budge and all Macmillan's books were temporarily removed from Amazon—including the print versions. Amazon eventually relented and is allowing the books back on site, and is going along with Macmillan's demands for higher e-book prices. > At issue is Amazon's practice of setting nearly all new e-book releases at $9.99 no matter what it's paying the publisher. This means Amazon may be paying the publisher $14 per title, for example, but is intentionally taking a loss on sales in order to push cheap e-books to Kindle users. http://arstechnica.com/gadgets/news/2010/02/publishers-continue-pummeling-amazon-over-e-book-prices.ars http://arstechnica.com/gadgets/news/2010/02/publishers-conti... Amazon was paying the publishers the full price they demanded -- the issue was not about publisher profit. Instead, Amazon intentionally took losses to promote ebooks as loss leaders. Publishers threatened to remove their books unless Amazon only sold their books at pre-specified minimum prices.
  - sigzero 15y ago
    All of this may be true but none of it puts Apple at fault nor do I think Apple will lose this one.
    - capnrefsmmat 15y ago
      Indeed; I think the lawsuit intends to prove that Apple collaborated in the publishers on forcing the new prices, but that's an allegation I've never seen evidence for.
      - fpgeek 15y ago
        One piece of evidence: Steve Jobs's apparent foreknowledge that "The prices [of eBooks] will be the same." Citation (from Jan 2010, well before Amazon agreed to the agency model): http://kindleworld.blogspot.com/2010/01/steve-jobs-pulls-his-puppet-strings-but.html http://kindleworld.blogspot.com/2010/01/steve-jobs-pulls-his...
  - 15y ago

nirvana 15y ago

How was the agency model forced on Amazon? Apple offered a better deal, and if I recall correctly, even before the iBooks Store had launched, Amazon changed their terms to offer the same deal. Amazon offered this same deal to everyone, including us. I'm not under a misunderstanding of what the deals are... I think you believed what you read in this press release and took it at face value. A "model" cannot include "other stipulations". It is simply a broad description of an arrangement. There are many books that are not available for the Kindle or on iBooks, and it has been many years since they were published. In short, the linked to article is FUD, Amazon chose to meet Apple's terms because they rightly recognized they were more competitive. I agree, it is stupid that you can buy the physical book for less than the ebook. However, no matter how stupid it is, it isn't price fixing.

capnrefsmmat 15y ago
Amazon chose to meet the publishers' terms because publishers began to withdraw books from Amazon: > Macmillan CEO John Sargent had been meeting with Amazon to discuss getting full control over e-book prices, but Amazon refused to budge and all Macmillan's books were temporarily removed from Amazon—including the print versions. Amazon eventually relented and is allowing the books back on site, and is going along with Macmillan's demands for higher e-book prices. > At issue is Amazon's practice of setting nearly all new e-book releases at $9.99 no matter what it's paying the publisher. This means Amazon may be paying the publisher $14 per title, for example, but is intentionally taking a loss on sales in order to push cheap e-books to Kindle users. http://arstechnica.com/gadgets/news/2010/02/publishers-continue-pummeling-amazon-over-e-book-prices.ars http://arstechnica.com/gadgets/news/2010/02/publishers-conti... Amazon was paying the publishers the full price they demanded -- the issue was not about publisher profit. Instead, Amazon intentionally took losses to promote ebooks as loss leaders. Publishers threatened to remove their books unless Amazon only sold their books at pre-specified minimum prices.
- sigzero 15y ago
  All of this may be true but none of it puts Apple at fault nor do I think Apple will lose this one.
  - capnrefsmmat 15y ago
    Indeed; I think the lawsuit intends to prove that Apple collaborated in the publishers on forcing the new prices, but that's an allegation I've never seen evidence for.
    - fpgeek 15y ago
      One piece of evidence: Steve Jobs's apparent foreknowledge that "The prices [of eBooks] will be the same." Citation (from Jan 2010, well before Amazon agreed to the agency model): http://kindleworld.blogspot.com/2010/01/steve-jobs-pulls-his-puppet-strings-but.html http://kindleworld.blogspot.com/2010/01/steve-jobs-pulls-his...
- 15y ago