5 ms·

Amazon 1 : Consumers 0 and another great ruling. let's wait for that monopoly around ebooks to fully develop until it's too late.

PauliaCred 13y ago
Just like the monopoly Apple developed around digital music...
- stephenr 13y ago
  oh yeah, and they've totally destroyed all competition in that market too.. http://en.wikipedia.org/wiki/Comparison_of_online_music_stores http://en.wikipedia.org/wiki/Comparison_of_online_music_stor... Amazon sells ebooks for the sake of selling ebooks - to make a profit. Apple sells music as a tie-in for its hardware offerings - it has no reason to "squeeze out" competitors in this space.
  - fpgeek 13y ago
    Hold on. Apple has huge incentives to push content competitors off of iOS. It dramatically increases the switching costs to other platforms (see: video in particular). And while pushing competitors off of iOS technically might not be squeezing them out of the space, it is still awfully damaging - especially when backed up by something like agency ebook pricing.
  - jljljl 13y ago
    Sure there are a number of competitors, but iTunes still dominates when it comes to dollar share of music purchases. Regardless of their intention, Apple has certainly "squeezed out" most of the competition, and remains the dominant platform for purchasing music. Similarly, there are still options outside of Amazon when it comes to eBooks. There's Nook, Kobo, iBooks, Google Books, Sony, and others. So Amazon's desire to make profit hasn't completely wiped out the market. So this argument does not really hold in either direction...
  - Tyrannosaurs 13y ago
    Don't disagree with your point on Apple but worth saying if Amazon's goal is to make a profit it's doing remarkably badly. On a turnover of around $60bn it makes a profit of about $90m. Given that it's nearly 20 years old and beyond the point where it should be struggling to break even either it's doing a very bad job of being profitable or being profitable isn't the companies primary goal right now. To me it looks like they're managing profit to zero to continue the land grab. Now that may be legal and fair and in the short term it's good for consumers, but in the longer term I'm not sure it's good for the market (and therefore for consumers) given that most of it's competitors have shareholders who probably do expect profits.
    - stephenr 13y ago
      Amazons goal has to be profit eventually, or there is no point being in business. That they make razor thin margins now, is just evidence they are still undercutting the smaller competition until they're the only player and can set prices to what they want.
  - smackfu 13y ago
    I would think a lot of those online music stores get sales by selling at a lower price than Apple. If Apple had the same kind of MFN clause that they had for books, that wouldn't have been possible. Apple probably thinks it was a bad idea to leave that hole open for the music stores, which is why they closed it for books.
  - bjustin 13y ago
    >Amazon sells ebooks for the sake of selling ebooks - to make a profit. No, Amazon sells ebooks for the sake of selling Kindles first and foremost (or did, before the launch of the iPad). Before the switch to the agency model, Amazon sold many ebooks at a loss. They sold ebooks at $9.99, less than what they paid publishers per copy for popular books.
JimmaDaRustla 13y ago
Amazon found a way to compete before anyone else did, so that makes it excusable for illegally orchestrated price fixing to attack their legal approach? Sorry, but this isn't the "Think Different" approach the customers deserve.
- rimantas 13y ago
  I am not sure "sell at the prices below the cost to drive out competition" is not some new way.
  - JimmaDaRustla 13y ago
    Lose money on one book, earn it on three others because you have customers that are bought into your ecosystem. Also, prices subsidized by Kindle sales. The point is that Publishers weren't losing. But, Amazon is not notorious for making profits, and I can understand how them dominating a market may be a bad thing. Doesn't justify Apple's tactic though.
  - smackfu 13y ago
    Interestingly, the decision PDF says that originally Amazon's $9.99 was not below wholesale cost. The publishers raised the wholesale cost above $9.99 thinking it would force Amazon to raise their prices, but Amazon decided they would rather take a loss: "With a digital book discount, Amazon’s $9.99 price point roughly matched the wholesale price of many of its e-books. " ... "One of the strategies that they [publishers] employed was the elimination of the existing discount on wholesale prices of e-books. This meant that the wholesale price for e-books would equal the wholesale price for physical books, and as a result, the wholesale price that Amazon paid for an e-book would be set at several dollars above Amazon’s $9.99 price point. This tactic, however, failed to convince Amazon to change its pricing policies and it continued to sell many NYT Bestsellers as loss leaders at $9.99.9"
  - fpgeek 13y ago
    Breaking open the ebook market after many other companies had tried and failed certainly was a new thing.
Kylekramer 13y ago
This angle of "why prosecute Apple when Amazon has the monopoly" is just lazy. Monopolies, which Amazon does not even have and is unlikely to gain, aren't illegal. Conspiring to raise prices is illegal. Amazon just has the potential to abuse consumers (maybe, possibly, in the future) due to their entirely legal success. Apple already did abuse consumers.
- DannoHung 13y ago
  Give me a call back when Amazon removes the drm from their file formats and I'll give a flying fuck about what's legal or not.
  - fpgeek 13y ago
    To be fair, any book a publisher wants sold DRM-free, Amazon sells DRM-free. Many publishers insist on DRM as a condition of sale. Your beef is with them, not Amazon. And by the way, DRM is at the heart of this ebook conspiracy. One of the publishers' fears was that too many readers would be trapped in Amazon's ecosystem by DRM, giving Amazon too much leverage. The correct response to that problem is to drop the pointless, self-inflicted DRM (as some have started doing in response to the antitrust cases). Instead, the publishers chose to work with Apple to try and limit Amazon's power...
    - ernesth 13y ago
      > To be fair, any book a publisher wants sold DRM-free, Amazon sells DRM-free. But only after threatening them that their books won't benefit from the latest amazon technologies such as text-to-speech if they opt out of DRM!
      - fpgeek 13y ago
        Oh? I hadn't heard about that. It certainly sounds bad. Do you have a pointer to more on this?
        13y ago
MatthewPhillips 13y ago
This is a cynical view point. Do we really have to choose between monopoly and collusion?
fpgeek 13y ago
Amazon's customer service (especially with respect to books) second-to-none, by a large margin. Consumers are doing far better than zero. And I wouldn't hold my breath waiting for that ebook monopoly. Even if Microsoft/B&N and Apple both decide to bow out (not at all likely they both care too much about content for mobile devices to do that), Amazon still would have Google and Kobo/buy.com/Rakuten (aka "the Amazon of Japan") to contend with both of which are more than capable of fighting a price war.
josefresco 13y ago
Yes let's totally raise prices now to protect us from Amazon whom may or may not raise prices in the future.
- esolyt 13y ago
  Irrelevant. If they do, that would be another trial.
Pxtl 13y ago
Amazon has built its empire on undercutting the competition in price. If there was a real competition in prices, Amazon's e-book offerings would stomp the paper publishers and Apple alike. No matter what, price-fixing or not, Amazon can do just fine. The only way they don't completely win is if they're forced to keep prices on e-books high and at identical level to dead tree ware and the glitzier Apple brand. And that's just what happened, thanks to collusion between Apple and the publishers.

PauliaCred 13y ago

Just like the monopoly Apple developed around digital music...

stephenr 13y ago
oh yeah, and they've totally destroyed all competition in that market too.. http://en.wikipedia.org/wiki/Comparison_of_online_music_stores http://en.wikipedia.org/wiki/Comparison_of_online_music_stor... Amazon sells ebooks for the sake of selling ebooks - to make a profit. Apple sells music as a tie-in for its hardware offerings - it has no reason to "squeeze out" competitors in this space.
- fpgeek 13y ago
  Hold on. Apple has huge incentives to push content competitors off of iOS. It dramatically increases the switching costs to other platforms (see: video in particular). And while pushing competitors off of iOS technically might not be squeezing them out of the space, it is still awfully damaging - especially when backed up by something like agency ebook pricing.
- jljljl 13y ago
  Sure there are a number of competitors, but iTunes still dominates when it comes to dollar share of music purchases. Regardless of their intention, Apple has certainly "squeezed out" most of the competition, and remains the dominant platform for purchasing music. Similarly, there are still options outside of Amazon when it comes to eBooks. There's Nook, Kobo, iBooks, Google Books, Sony, and others. So Amazon's desire to make profit hasn't completely wiped out the market. So this argument does not really hold in either direction...
- Tyrannosaurs 13y ago
  Don't disagree with your point on Apple but worth saying if Amazon's goal is to make a profit it's doing remarkably badly. On a turnover of around $60bn it makes a profit of about $90m. Given that it's nearly 20 years old and beyond the point where it should be struggling to break even either it's doing a very bad job of being profitable or being profitable isn't the companies primary goal right now. To me it looks like they're managing profit to zero to continue the land grab. Now that may be legal and fair and in the short term it's good for consumers, but in the longer term I'm not sure it's good for the market (and therefore for consumers) given that most of it's competitors have shareholders who probably do expect profits.
  - stephenr 13y ago
    Amazons goal has to be profit eventually, or there is no point being in business. That they make razor thin margins now, is just evidence they are still undercutting the smaller competition until they're the only player and can set prices to what they want.
- smackfu 13y ago
  I would think a lot of those online music stores get sales by selling at a lower price than Apple. If Apple had the same kind of MFN clause that they had for books, that wouldn't have been possible. Apple probably thinks it was a bad idea to leave that hole open for the music stores, which is why they closed it for books.
- bjustin 13y ago
  >Amazon sells ebooks for the sake of selling ebooks - to make a profit. No, Amazon sells ebooks for the sake of selling Kindles first and foremost (or did, before the launch of the iPad). Before the switch to the agency model, Amazon sold many ebooks at a loss. They sold ebooks at $9.99, less than what they paid publishers per copy for popular books.

JimmaDaRustla 13y ago

Amazon found a way to compete before anyone else did, so that makes it excusable for illegally orchestrated price fixing to attack their legal approach? Sorry, but this isn't the "Think Different" approach the customers deserve.

rimantas 13y ago
I am not sure "sell at the prices below the cost to drive out competition" is not some new way.
- JimmaDaRustla 13y ago
  Lose money on one book, earn it on three others because you have customers that are bought into your ecosystem. Also, prices subsidized by Kindle sales. The point is that Publishers weren't losing. But, Amazon is not notorious for making profits, and I can understand how them dominating a market may be a bad thing. Doesn't justify Apple's tactic though.
- smackfu 13y ago
  Interestingly, the decision PDF says that originally Amazon's $9.99 was not below wholesale cost. The publishers raised the wholesale cost above $9.99 thinking it would force Amazon to raise their prices, but Amazon decided they would rather take a loss: "With a digital book discount, Amazon’s $9.99 price point roughly matched the wholesale price of many of its e-books. " ... "One of the strategies that they [publishers] employed was the elimination of the existing discount on wholesale prices of e-books. This meant that the wholesale price for e-books would equal the wholesale price for physical books, and as a result, the wholesale price that Amazon paid for an e-book would be set at several dollars above Amazon’s $9.99 price point. This tactic, however, failed to convince Amazon to change its pricing policies and it continued to sell many NYT Bestsellers as loss leaders at $9.99.9"
- fpgeek 13y ago
  Breaking open the ebook market after many other companies had tried and failed certainly was a new thing.

Kylekramer 13y ago

This angle of "why prosecute Apple when Amazon has the monopoly" is just lazy. Monopolies, which Amazon does not even have and is unlikely to gain, aren't illegal. Conspiring to raise prices is illegal. Amazon just has the potential to abuse consumers (maybe, possibly, in the future) due to their entirely legal success. Apple already did abuse consumers.

DannoHung 13y ago
Give me a call back when Amazon removes the drm from their file formats and I'll give a flying fuck about what's legal or not.
- fpgeek 13y ago
  To be fair, any book a publisher wants sold DRM-free, Amazon sells DRM-free. Many publishers insist on DRM as a condition of sale. Your beef is with them, not Amazon. And by the way, DRM is at the heart of this ebook conspiracy. One of the publishers' fears was that too many readers would be trapped in Amazon's ecosystem by DRM, giving Amazon too much leverage. The correct response to that problem is to drop the pointless, self-inflicted DRM (as some have started doing in response to the antitrust cases). Instead, the publishers chose to work with Apple to try and limit Amazon's power...
  - ernesth 13y ago
    > To be fair, any book a publisher wants sold DRM-free, Amazon sells DRM-free. But only after threatening them that their books won't benefit from the latest amazon technologies such as text-to-speech if they opt out of DRM!
    - fpgeek 13y ago
      Oh? I hadn't heard about that. It certainly sounds bad. Do you have a pointer to more on this?
      - 13y ago

MatthewPhillips 13y ago

This is a cynical view point. Do we really have to choose between monopoly and collusion?

fpgeek 13y ago

Amazon's customer service (especially with respect to books) second-to-none, by a large margin. Consumers are doing far better than zero. And I wouldn't hold my breath waiting for that ebook monopoly. Even if Microsoft/B&N and Apple both decide to bow out (not at all likely they both care too much about content for mobile devices to do that), Amazon still would have Google and Kobo/buy.com/Rakuten (aka "the Amazon of Japan") to contend with both of which are more than capable of fighting a price war.

josefresco 13y ago

Yes let's totally raise prices now to protect us from Amazon whom may or may not raise prices in the future.

esolyt 13y ago
Irrelevant. If they do, that would be another trial.

Pxtl 13y ago

Amazon has built its empire on undercutting the competition in price. If there was a real competition in prices, Amazon's e-book offerings would stomp the paper publishers and Apple alike. No matter what, price-fixing or not, Amazon can do just fine. The only way they don't completely win is if they're forced to keep prices on e-books high and at identical level to dead tree ware and the glitzier Apple brand. And that's just what happened, thanks to collusion between Apple and the publishers.