8 ms·

Could someone explain how they came to this judgement? It doesn't make any sense to me. For example: >>"The U.S. Department of Justice said this conspiracy was

• JimmaDaRustla 13y ago
  Apple (Jobs) were bullying publishers into contracts and abandon Amazon. The best part is how Apple decided that the Publisher sets the price, and Apple gets 30% regardless of profit margin. Apple also stated that they were able to price match anyone who undersold them, and they STILL get 30%, pushing losses onto the Publisher. At least with Amazon, they ate the loss due to their price fixing. Edit: Fixed last paragraph
  • darkchasma 13y ago
    Exactly how would Apple bully a Publisher? Jobs went and pulled down the CEO's pants?
    • ceejayoz 13y ago
      "Lower the price or we won't sell your books"?
      • JimmaDaRustla 13y ago
        It was more like "Let us sell your books at higher prices, or lose money to Amazon and piracy."
        • mjhagen 13y ago
          So, no arms were actually twisted. There was no iBooks marked when the emails were sent and the publishers could've said no.
        • threeseed 13y ago
          The publishers had the choice to go with Amazon but decided against it because they made more money with Apple. So in what way is this bullying again ?
          • JimmaDaRustla 13y ago
            I don't think you understand the concept of price fixing - The intent is that Apple is making the decision for the Publisher's by proposing an offer that isn't in the sense of "pros vs cons", but rather "right vs wrong". Of course most Publishers agreed because it was for the greater good of their company, and the only one hung up with the bad rep is their ring master. "You can either join us, or we'll collectively squash you."
    • JimmaDaRustla 13y ago
      Like this: http://allthingsd.com/20130515/heres-that-steve-jobs-e-book-email-to-james-murdoch/ http://allthingsd.com/20130515/heres-that-steve-jobs-e-book-... TL;DR: Lose money when Amazon starts taking a bigger cut, or lose money due to piracy.
  • smackfu 13y ago
    The bullying by Apple of publishers was generally about fixing the price caps lower than the publishers wanted ($12.99 for NY Times bestsellers rather than $14.99.) Apple didn't have to bully the publishers in general, because this deal was a big win for them.
    • JimmaDaRustla 13y ago
      Jobs' scare tactic was that Amazon would eventually take a larger commission. Jobs even admitted that Amazon would profit Publishers more in the short term, essentially admitting that Apple was going to make Publishers eat losses by price matching Amazon. Then, once Amazon was forced to increase prices in order to make a profit because they've been squeezed out of their Monopoly position, then the profit starts rolling in. Very illegal, and also leaves Apple unscathed because they don't take any losses. You can understand how bullying would be required in order to get some reluctant Publishers to conform.
      • coldtea 13y ago
        >Jobs' scare tactic was that Amazon would eventually take a larger commission. And how's that a "scare tactic"? Sounds like something entirely reasonable for the publishers to consider.
        • JimmaDaRustla 13y ago
          Predicting a Publishers' "inevitable fates" and conveying that you are their only hope, is a scare tactic. Also, Jobs also stated rampant piracy would be a major issue if attempting to sell E-Books through alternative means.
          • threeseed 13y ago
            Wow you have a warped view of how business works today. These aren't cute, innocent little children. If Apple comes to them and tells them they are the saving grace of the publishing industry it isn't a scare tactic. It's just meaningless bluster. Microsoft, Google, Amazon et al would be saying exactly the same thing. It doesn't mean anyone has to listen.
  • dragonwriter 13y ago
    > Apple (Jobs) were bullying publishers into contracts and abandon Amazon. Not really. He was certainly encouraging them, but both the charges and the findings here are that the publishers themselves were actively colluding and looking for pretty much exactly what Apple offered before Apple offered it. The conspiracy didn't start with Apple, it was just that Apple's active, enthusiastic involvement was necessary for it to move forward.
• MatthewPhillips 13y ago
  Consumers couldn't get a lower price from Amazon (or others) because the colluding parties had an agreement to set the prices for all retailers. That's the crux of the case.
  • uptown 13y ago
    How does this differ from something like RayBan sunglasses which cost the same everywhere ... the MSRP?
    • jusben1369 13y ago
      Buy non RayBan sunglasses if you don't like RayBan prices.
      • coldtea 13y ago
        Or, you know, what a novel idea, try to get them to LOWER their prices, if you think they charge unfairly.
        • jusben1369 13y ago
          How can Ray Ban charge unfairly for their prices when you have literally 100's of other non Ray Ban options in any sunglasses store? If brand is that important to you that you feel like you have to buy them and you then overpaid for them I would say that's some pretty sweet branding at your expense.
          • rdouble 13y ago
            Because Ray Bans parent company owns all the other brands in the store and also likely owns the store itself.
            • jusben1369 13y ago
              I have no idea if that's true or not but assuming it is then it's not really a Ray Ban discussion. It's a "state of health of the sunglasses market" discussion.
• kryptiskt 13y ago
  > From my perspective Apple looked at the market (Amazon), realised their pricing wasn't sustainable, and agreed to a more sustainable model with publishers. Working something out with all the big publishers is pretty much the definition of an illegal cartel.
  • hga 13y ago
    On of my favorite Adam Smith quotes is apropos (http://en.wikiquote.org/wiki/Adam_Smith#Book_I http://en.wikiquote.org/wiki/Adam_Smith#Book_I): "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices." This is classic, slam dunk antitrust, no need to spin elaborate economic theories, just prove to the court's satisfaction that consumers were harmed by an overt conspiracy to raise prices.
    • skygazer 13y ago
      If Amazon was selling $12 wholesale ebooks at a loss of $2 a piece for a retail price of $9.99, it seems Apple would also have to sell them at a loss, to prevent book prices from increasing. Even if Apple had sold them at cost, with 0% margin, prices would have inescapably gone up, anyway. It seems that this standard for antitrust is reliant upon predominant pricing already being sustainable.
      • gamblor956 13y ago
        Well, no. The point was that Amazon was willing to make the investment (the loss per sale) to increase the market for eBooks (and its share of said market), but Apple was not. Apple never even tried to compete at the retail model, and instead attempted from the beginning to impose the agency model. Important here is that the agency model would only have gone into effect if the publishers jointly succeeded in changing their Amazon contracts. They were able to do so because their joint Apple negotiations geave them the leverage to jointly renegotiate their Amazon contracts. Joint negotiations aren't always an antitrust issue. But when the result is to increase prices or otherwise burden the market, it's usually (as here) indicative of antitrust activity.
• smackfu 13y ago
  Relevant part of the decision: A chief stumbling block to raising e-book prices was the Publishers’ fear that Amazon would retaliate against any Publisher who pressured it to raise prices. Each of them could also expect to lose substantial sales if they unilaterally raised the prices of their own e-books and none of their competitors followed suit. This is where Apple’s participation in the conspiracy proved essential. It assured each Publisher Defendant that it would only move forward if a critical mass of the major publishing houses agreed to its agency terms. It promised each Publisher Defendant that it was getting identical terms in its Agreement in every material way. ... Without the collective action that Apple nurtured, it is unlikely any individual Publisher would have succeeded in unilaterally imposing an agency relationship on Amazon.
  • dak1 13y ago
    It sounds like the stumbling block was a horizontal monopoly in retail held (or nearly held)[1] by Amazon. You can argue whether or not Amazon is participating in predatory pricing now, but should Amazon end up raising prices (not entirely obvious that will happen)[2][3], then this case could end up being pointed to in the future as a lost opportunity to let the market correct itself. [1] http://paidcontent.org/2013/07/09/barnes-noble-throws-out-its-ceo-but-that-wont-save-the-company/ http://paidcontent.org/2013/07/09/barnes-noble-throws-out-it... [2] http://www.csmonitor.com/Business/Saving-Money/2013/0518/Will-Amazon-raise-its-prices http://www.csmonitor.com/Business/Saving-Money/2013/0518/Wil... [3] http://www.nytimes.com/2013/07/05/business/as-competition-wanes-amazon-cuts-back-its-discounts.html?_r=0 http://www.nytimes.com/2013/07/05/business/as-competition-wa...
    • smackfu 13y ago
      You can't break the law just because you think someone else is breaking the law. The judge doesn't have the option of deciding that Apple was not guilty because Amazon deserved it.
      • dak1 13y ago
        The fact that this could very well prove to be a Pyrrhic victory I think is actually extremely relevant to this case, since the fundamental guiding principle here is "is this in consumer's best interest."
• andrewhillman 13y ago
  Under the law, you cannot discuss prices with ANYONE you are competing against. Once you do this, regardless of your reasoning, you are in violation of anti trust laws.
• dragonwriter 13y ago
  > How can they undercut Amazon's dominance by charging more?? It might make them look better to publishers but not consumers. Right. Which is why it took an illegal horizontal price-fixing scheme with notional competitors (the publishers) conspiring to raise prices to do that. Apple was a member of the conspiracy who sought to profit from it, but really the principal wrongdoing here was the conspiracy among the publishers. Apple looks like they were singled out because they were the only one that went to trial, but that's just because they were the only participant in the conspiracy that didn't settle with the Justice Department prior to trial; the involved publishers were all charged along with Apple. > I could understand the problem if Apple tried to raise prices and had a monopoly on ebooks How about if many of the biggest publishers, together controlling significant market power in the ebook market, got together and conspired to raise prices, with Apple as willing and necessary co-conspirator (since they needed a retailer with a platform with instant mass reach so that they could have a credible threat of jointly abandoning Amazon if Amazon didn't match the terms they got from the new retailer.) Because that's what was charged, and that was what the judge found the evidence supported. Its not about what Apple did on their own.