6 ms·

DOJ Calls for Apple to End Book Deals, Link to Rival Bookstores

45 points by daegloe 13y ago

6502hero 13y ago
Wow, this opens up the market a LOT. Fortuitous timing for B&N's ailing Nook division?
daegloe 13y ago
Apple's obligatory response: “Plaintiffs’ proposed injunction is a draconian and punitive intrusion into Apple’s business, wildly out of proportion to any adjudicated wrongdoing or potential harm. Plaintiffs propose a sweeping and unprecedented injunction as a tool to empower the Government to regulate Apple’s businesses and potentially affect Apple’s business relationships with thousands of partners across several markets. Plaintiffs’ overreaching proposal would establish a vague new compliance regime—applicable only to Apple—with intrusive oversight lasting for ten years, going far beyond the legal issues in this case, injuring competition and consumers, and violating basic principles of fairness and due process. The resulting cost of this relief—not only in dollars but also lost opportunities for American businesses and consumers—would be vast.” http://allthingsd.com/20130802/apple-slams-feds-proposed-e-book-remedies-as-a-draconian-and-punitive-intrusion/ http://allthingsd.com/20130802/apple-slams-feds-proposed-e-b...
- lostlogin 13y ago
  Seems a weird solution, given they aren't the gorilla in the ebook market - but what comes to mind when reading this, are the battles Microsoft had with regulation. I wonder if this is the beginning of the same era for Apple.
  - dragonwriter 13y ago
    > Seems a weird solution, given they aren't the gorilla in the ebook market While some of the remedies are related to the market that was affected by the illegal actions they were found to have engaged in, the remedies as a whole aren't limited to the ebook market, and it seems more concerned with Apple using its mobile position and related retail platforms to facilitate similar publisher schemes in other markets to the one it engaged in in the e-book market. Which, IMO, is what you'd expect of a company that wasn't found to be leveraging a monopoly or otherwise abusing power as a dominant player in one market, but instead was found to have used a significant-but-not-necessarily unique position in one market to provide a pivotal role in a price-fixing conspiracy among producers in another market.
    - voodoo123 13y ago
      Perhaps, but it's an insane solution in a competitive environment where the other major players have actual monopolies and are using predatory pricing to enter other markets. Apple has clearly overreached, but this kind of remedy is not about restoring competition.
      - dragonwriter 13y ago
        > Apple has clearly overreached, but this kind of remedy is not about restoring competition. This is about Apple using its retail outlet to advance and profit from a conspiracy among publishers to jointly set the terms on which they sold to retailers, including retail price fixing as the key focus. Insofar as it is about "restoring competition", its about restoring the need for publishers to each seek separately to make the best deals with retailers, rather than unilaterally imposing common terms. (This affects retail prices, but its not about retail competition.) The remedies which benefit other retailers aren't about restoring competition, per se, they are about remedying the harms done by Apple's unlawful activity to other market participants. In Amazon's case, that also happens to reward the incumbent major player, but then, Amazon was the primary target of the illegal conspiracy. So this is not inappropriate. As to your allegations against Amazon, if one assumes they are true, they might be a basis for anti-trust action against Amazon, but they aren't an argument for limiting the remedies imposed on Apple for conspiring with publishers in a price-fixing scheme.
        jolohaga 13y ago
        I think the conspiracy is really correcting a wrong. The publishers felt they made a mistake giving Amazon so much leverage, so early in the development of e-commerce. To assume that all e-commerce should develop in the open web model is ludicrous. This has to be obvious to some in Washington.
        deleted 13y ago
        [deleted]
        deleted 13y ago
  - AsymetricCom 13y ago
    Don't be fooled, Apple sells a lot of eBooks, but I don't think anyone has numbers. Apple has a lot of power in the market right now, and has already shown to be willing to abuse it in ways worse than MS ever did in the 90's. They don't have the market power to be subject to anti-trust laws, if they were, I can imagine it being worse than the Microsoft judgment. Having that said, it's really a different case than eBook price fixing. It's almost like they're giving them a punishment for a different case...
    - MBCook 13y ago
      Do you have any numbers on Apple's eBook sales? I always figured they were even smaller than Nook, or at least outnumbered by Amazon most of 10:1.
      - AsymetricCom 13y ago
        I'd say it's closer to 1:1 or 2:1 considering what Iv'e seen in the wild. Other systems can advertise books right in iTunes like a single app. Kindle has to be discovered via Amazon's site so it really only appeals to existing customers. Apple has way more brand recognition.
        MBCook 13y ago
        Really? They both play this kind of stuff close to the chest. As far as I know Amazon has never released sales numbers for the Kindles, at least Apple tells us that. Anecdotally I use Kindle ecosystem, as do some of my friends and family. I don't know anyone who uses iBooks, so that's probably skewing my viewpoint. I guess they did at least make a name for themselves with textbooks, at a minimum. EDIT: According to All Things Digital, during the trial one of Apple's people estimated their market share at 20% [1]. That's way higher than I would have guessed. [1] - http://allthingsd.com/20130613/apples-e-book-market-share-is-bigger-than-you-think/ http://allthingsd.com/20130613/apples-e-book-market-share-is...
        AsymetricCom 13y ago
ehm_may 13y ago
I've heard quite a bit about this case over the past month or so, but don't understand it. Can someone explain what Apple 'fixing' e-book prices means and how that is illegal?
- hga 13y ago
  In very brief, Apple and a half dozen publishers engaged in a white line price fixing conspiracy, all the publishers pled guilty, and naturally their counterparty was found guilty. A price fixing conspiracy that causes damage to consumers is white line illegal in the US; in this case, the prices of many ebooks went up by quite a bit. Which leads straight to all but one of the remedies, like terminating all those deals with the publishers and for 5 years refraining from striking any vaguely similar deal with publishers. And extending this sort of thing to other media, seeing as how they are now a convicted (and unrepentant) price fixer. As for the remaining remedy ... don't know about the legal basis for it, but Amazon was the main target of all the parties in the price fixing conspiracy. There's a bit more detail here: http://en.wikipedia.org/wiki/Apple_Inc._litigation#eBook_price-fixing_lawsuit http://en.wikipedia.org/wiki/Apple_Inc._litigation#eBook_pri...
  - jolohaga 13y ago
    "in this case, the prices of many ebooks went up by quite a bit" But no one was coerced into buying those books. Where's the crime?
    - twoodfin 13y ago
      Nobody is ever really coerced into buying airline tickets, but if Expedia sat the CEOs of the major U.S. airlines down and convinced them to all agree to raise prices, that would still be price fixing and illegal under the Sherman Act.
    - hga 13y ago
      The crime is that businesses are not allowed to get together and raise prices in concert like this.
- 13y ago
ben1040 13y ago
>allow for two years rival e-book retailers like Amazon and Barnes & Noble to provide links from their e-book apps to their own e-bookstores without paying any fee or commission to Apple on sales made through them. This doesn't exactly seem fair to all the other companies who would still have to give up 30% commission over to Apple but can't raise their price (e.g. Netflix, Dropbox, etc).
- anigbrowl 13y ago
  Those firms weren't injured by Apple's participation in a conspiracy (that we know about).
- dragonwriter 13y ago
  > This doesn't exactly seem fair to all the other companies who would still have to give up 30% commission over to Apple but can't raise their price (e.g. Netflix, Dropbox, etc). The term at issue is a remedy for harms done by Apple's role in the ebook publisher price fixing scheme, which isn't relevant to Netflix, Dropbox, etc. Insofar as the kind of thing Apple did here would be relevant to app makers in markets other than the ebook market, those app makers are beneficiaries of the provisions of the propsed remedy that exist to prevent Apple from engaging in schemes that are similar to the ebook scheme in other markets.
  - AsymetricCom 13y ago
    I could understand why apple would get a 30% of scamware f2p shit recoded flash games that couldn't exist without their ripoff platform. But why should they get 30% of book sales when they don't even care about piracy or make any serious efforts to stop it?
- coldcode 13y ago
  Amazon wasn't harmed one iota yet now they get freebies from the DOJ. In fact the only people "harmed" by this are the very people who get nothing. Mind you this is the same DOJ that sees nothing wrong with the NSA, FBI and their ilk recording our emails, browser history, phone calls and whatever else they feel like collecting. But sure, Amazon isn't making a profit lets give them some.
Steko 13y ago
You gotta love antitrust regulators that work hard to further entrench the dominant competitor. Get your External Antitrust Monitor resumes up on LinkedIn kids, xmas is coming early this year.
- voodoo123 13y ago
  Why is this being downvoted? It's clearly true.
- freehunter 13y ago
  That's because being the dominant competitor is not illegal. Price fixing and colluding to drive competitors out of the market by extending a powerful position in one market into another market is illegal.
  - Steko 13y ago
    I haven't claimed that Amazon did anything illegal or that Apple didn't. The claim I'm making is that the remedy for Apple's transgression needn't be a gift to Amazon. And while the DoJ could decide to look into Amazon's own actions for various reasons, does anyone seriously think a proper penalty might include the DoJ enabling a "Buy at Barnes & Noble" button on Amazon.com?
    - jgon 13y ago
      Yeah, imagine if Amazon included apps that let you buy books from the competitors right on their own tablets!! It would be inconceivable!! http://www.amazon.com/Kobo-Inc-eBooks/dp/B004SIEZ8I/ref=sr_1_1?s=mobile-apps&ie=UTF8&qid=1375499061&sr=1-1&keywords=kobo http://www.amazon.com/Kobo-Inc-eBooks/dp/B004SIEZ8I/ref=sr_1...
      - Steko 13y ago
        Because a decision Amazon makes is totally like when the government forces it to do something!
    - 13y ago
ryanwhitney 13y ago
Anyone have insight into what sort of timeline this is on? How long Apple could drag this out until books disappear from iTunes and consumers are stuck with the Kindle iOS app and it's non-native text selection bullshit?
- Steko 13y ago
  I don't think it prevents them from recontracting immediately with the publishers, just they can't get most favored nation. "entering new e-book distribution deals which would free it from having to compete on price"
addandsubtract 13y ago
Puts this in a whole new light: http://qz.com/87184/the-steve-jobs-emails-that-show-how-to-win-a-hard-nosed-negotiation/ http://qz.com/87184/the-steve-jobs-emails-that-show-how-to-w... HN discussion: https://news.ycombinator.com/item?id=5752212 https://news.ycombinator.com/item?id=5752212
r0s 13y ago
It's sad and terrible to see the last, best vestige of old media being constrained by supposed innovation.
ChuckMcM 13y ago
This was interesting "without paying any fee or commission to Apple on sales made through them." It is interesting because I see it as a request to keep Apple from enriching itself but abolishing the fee entirely makes for a really harsh sanction. We'll see what, if anything, the court decides is reasonable.
jolohaga 13y ago
I can't wait to see links to iTunes on the Amazon web site one day.

45 points by daegloe 13y ago

Wow, this opens up the market a LOT. Fortuitous timing for B&N's ailing Nook division?

Apple's obligatory response: “Plaintiffs’ proposed injunction is a draconian and punitive intrusion into Apple’s business, wildly out of proportion to any adjudicated wrongdoing or potential harm. Plaintiffs propose a sweeping and unprecedented injunction as a tool to empower the Government to regulate Apple’s businesses and potentially affect Apple’s business relationships with thousands of partners across several markets. Plaintiffs’ overreaching proposal would establish a vague new compliance regime—applicable only to Apple—with intrusive oversight lasting for ten years, going far beyond the legal issues in this case, injuring competition and consumers, and violating basic principles of fairness and due process. The resulting cost of this relief—not only in dollars but also lost opportunities for American businesses and consumers—would be vast.” http://allthingsd.com/20130802/apple-slams-feds-proposed-e-book-remedies-as-a-draconian-and-punitive-intrusion/ http://allthingsd.com/20130802/apple-slams-feds-proposed-e-b...

lostlogin 13y ago
Seems a weird solution, given they aren't the gorilla in the ebook market - but what comes to mind when reading this, are the battles Microsoft had with regulation. I wonder if this is the beginning of the same era for Apple.
- dragonwriter 13y ago
  > Seems a weird solution, given they aren't the gorilla in the ebook market While some of the remedies are related to the market that was affected by the illegal actions they were found to have engaged in, the remedies as a whole aren't limited to the ebook market, and it seems more concerned with Apple using its mobile position and related retail platforms to facilitate similar publisher schemes in other markets to the one it engaged in in the e-book market. Which, IMO, is what you'd expect of a company that wasn't found to be leveraging a monopoly or otherwise abusing power as a dominant player in one market, but instead was found to have used a significant-but-not-necessarily unique position in one market to provide a pivotal role in a price-fixing conspiracy among producers in another market.
  - voodoo123 13y ago
    Perhaps, but it's an insane solution in a competitive environment where the other major players have actual monopolies and are using predatory pricing to enter other markets. Apple has clearly overreached, but this kind of remedy is not about restoring competition.
    - dragonwriter 13y ago
      > Apple has clearly overreached, but this kind of remedy is not about restoring competition. This is about Apple using its retail outlet to advance and profit from a conspiracy among publishers to jointly set the terms on which they sold to retailers, including retail price fixing as the key focus. Insofar as it is about "restoring competition", its about restoring the need for publishers to each seek separately to make the best deals with retailers, rather than unilaterally imposing common terms. (This affects retail prices, but its not about retail competition.) The remedies which benefit other retailers aren't about restoring competition, per se, they are about remedying the harms done by Apple's unlawful activity to other market participants. In Amazon's case, that also happens to reward the incumbent major player, but then, Amazon was the primary target of the illegal conspiracy. So this is not inappropriate. As to your allegations against Amazon, if one assumes they are true, they might be a basis for anti-trust action against Amazon, but they aren't an argument for limiting the remedies imposed on Apple for conspiring with publishers in a price-fixing scheme.
      - jolohaga 13y ago
        I think the conspiracy is really correcting a wrong. The publishers felt they made a mistake giving Amazon so much leverage, so early in the development of e-commerce. To assume that all e-commerce should develop in the open web model is ludicrous. This has to be obvious to some in Washington.
        deleted 13y ago
        [deleted]
        deleted 13y ago
- AsymetricCom 13y ago
  Don't be fooled, Apple sells a lot of eBooks, but I don't think anyone has numbers. Apple has a lot of power in the market right now, and has already shown to be willing to abuse it in ways worse than MS ever did in the 90's. They don't have the market power to be subject to anti-trust laws, if they were, I can imagine it being worse than the Microsoft judgment. Having that said, it's really a different case than eBook price fixing. It's almost like they're giving them a punishment for a different case...
  - MBCook 13y ago
    Do you have any numbers on Apple's eBook sales? I always figured they were even smaller than Nook, or at least outnumbered by Amazon most of 10:1.
    - AsymetricCom 13y ago
      I'd say it's closer to 1:1 or 2:1 considering what Iv'e seen in the wild. Other systems can advertise books right in iTunes like a single app. Kindle has to be discovered via Amazon's site so it really only appeals to existing customers. Apple has way more brand recognition.
      - MBCook 13y ago
        Really? They both play this kind of stuff close to the chest. As far as I know Amazon has never released sales numbers for the Kindles, at least Apple tells us that. Anecdotally I use Kindle ecosystem, as do some of my friends and family. I don't know anyone who uses iBooks, so that's probably skewing my viewpoint. I guess they did at least make a name for themselves with textbooks, at a minimum. EDIT: According to All Things Digital, during the trial one of Apple's people estimated their market share at 20% [1]. That's way higher than I would have guessed. [1] - http://allthingsd.com/20130613/apples-e-book-market-share-is-bigger-than-you-think/ http://allthingsd.com/20130613/apples-e-book-market-share-is...
        AsymetricCom 13y ago

ehm_may 13y ago

I've heard quite a bit about this case over the past month or so, but don't understand it. Can someone explain what Apple 'fixing' e-book prices means and how that is illegal?

hga 13y ago
In very brief, Apple and a half dozen publishers engaged in a white line price fixing conspiracy, all the publishers pled guilty, and naturally their counterparty was found guilty. A price fixing conspiracy that causes damage to consumers is white line illegal in the US; in this case, the prices of many ebooks went up by quite a bit. Which leads straight to all but one of the remedies, like terminating all those deals with the publishers and for 5 years refraining from striking any vaguely similar deal with publishers. And extending this sort of thing to other media, seeing as how they are now a convicted (and unrepentant) price fixer. As for the remaining remedy ... don't know about the legal basis for it, but Amazon was the main target of all the parties in the price fixing conspiracy. There's a bit more detail here: http://en.wikipedia.org/wiki/Apple_Inc._litigation#eBook_price-fixing_lawsuit http://en.wikipedia.org/wiki/Apple_Inc._litigation#eBook_pri...
- jolohaga 13y ago
  "in this case, the prices of many ebooks went up by quite a bit" But no one was coerced into buying those books. Where's the crime?
  - twoodfin 13y ago
    Nobody is ever really coerced into buying airline tickets, but if Expedia sat the CEOs of the major U.S. airlines down and convinced them to all agree to raise prices, that would still be price fixing and illegal under the Sherman Act.
  - hga 13y ago
    The crime is that businesses are not allowed to get together and raise prices in concert like this.
13y ago

ben1040 13y ago

>allow for two years rival e-book retailers like Amazon and Barnes & Noble to provide links from their e-book apps to their own e-bookstores without paying any fee or commission to Apple on sales made through them. This doesn't exactly seem fair to all the other companies who would still have to give up 30% commission over to Apple but can't raise their price (e.g. Netflix, Dropbox, etc).

anigbrowl 13y ago
Those firms weren't injured by Apple's participation in a conspiracy (that we know about).
dragonwriter 13y ago
> This doesn't exactly seem fair to all the other companies who would still have to give up 30% commission over to Apple but can't raise their price (e.g. Netflix, Dropbox, etc). The term at issue is a remedy for harms done by Apple's role in the ebook publisher price fixing scheme, which isn't relevant to Netflix, Dropbox, etc. Insofar as the kind of thing Apple did here would be relevant to app makers in markets other than the ebook market, those app makers are beneficiaries of the provisions of the propsed remedy that exist to prevent Apple from engaging in schemes that are similar to the ebook scheme in other markets.
- AsymetricCom 13y ago
  I could understand why apple would get a 30% of scamware f2p shit recoded flash games that couldn't exist without their ripoff platform. But why should they get 30% of book sales when they don't even care about piracy or make any serious efforts to stop it?
coldcode 13y ago
Amazon wasn't harmed one iota yet now they get freebies from the DOJ. In fact the only people "harmed" by this are the very people who get nothing. Mind you this is the same DOJ that sees nothing wrong with the NSA, FBI and their ilk recording our emails, browser history, phone calls and whatever else they feel like collecting. But sure, Amazon isn't making a profit lets give them some.

Steko 13y ago

You gotta love antitrust regulators that work hard to further entrench the dominant competitor. Get your External Antitrust Monitor resumes up on LinkedIn kids, xmas is coming early this year.

voodoo123 13y ago
Why is this being downvoted? It's clearly true.
freehunter 13y ago
That's because being the dominant competitor is not illegal. Price fixing and colluding to drive competitors out of the market by extending a powerful position in one market into another market is illegal.
- Steko 13y ago
  I haven't claimed that Amazon did anything illegal or that Apple didn't. The claim I'm making is that the remedy for Apple's transgression needn't be a gift to Amazon. And while the DoJ could decide to look into Amazon's own actions for various reasons, does anyone seriously think a proper penalty might include the DoJ enabling a "Buy at Barnes & Noble" button on Amazon.com?
  - jgon 13y ago
    Yeah, imagine if Amazon included apps that let you buy books from the competitors right on their own tablets!! It would be inconceivable!! http://www.amazon.com/Kobo-Inc-eBooks/dp/B004SIEZ8I/ref=sr_1_1?s=mobile-apps&ie=UTF8&qid=1375499061&sr=1-1&keywords=kobo http://www.amazon.com/Kobo-Inc-eBooks/dp/B004SIEZ8I/ref=sr_1...
    - Steko 13y ago
      Because a decision Amazon makes is totally like when the government forces it to do something!
  - 13y ago

ryanwhitney 13y ago

Anyone have insight into what sort of timeline this is on? How long Apple could drag this out until books disappear from iTunes and consumers are stuck with the Kindle iOS app and it's non-native text selection bullshit?

Steko 13y ago
I don't think it prevents them from recontracting immediately with the publishers, just they can't get most favored nation. "entering new e-book distribution deals which would free it from having to compete on price"

addandsubtract 13y ago

Puts this in a whole new light: http://qz.com/87184/the-steve-jobs-emails-that-show-how-to-win-a-hard-nosed-negotiation/ http://qz.com/87184/the-steve-jobs-emails-that-show-how-to-w... HN discussion: https://news.ycombinator.com/item?id=5752212 https://news.ycombinator.com/item?id=5752212

r0s 13y ago

It's sad and terrible to see the last, best vestige of old media being constrained by supposed innovation.

ChuckMcM 13y ago

This was interesting "without paying any fee or commission to Apple on sales made through them." It is interesting because I see it as a request to keep Apple from enriching itself but abolishing the fee entirely makes for a really harsh sanction. We'll see what, if anything, the court decides is reasonable.

jolohaga 13y ago

I can't wait to see links to iTunes on the Amazon web site one day.