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Judge OKs Class Action Suit Against Apple For E-Book Price Fixing

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  • by Rosyna (80334) on Saturday March 29, 2014 @01:49AM (#46608395) Homepage

    Amazon, using its monopoly power in ebooks, kept prices artificially low. When Apple entered the market, Amazon lost some of its monopoly power and publishers used this event to increase eBook prices across the board.

  • Compete on Price (Score:5, Informative)

    by tuppe666 (904118) on Saturday March 29, 2014 @02:01AM (#46608415)

    There was no "pre-cartel" pricing. There was only Amazon selling at a loss to drive every other ebook store out of business. They failed to do that, though they have been successful at getting the courts to go after everyone else in retribution.

    from http://www.justice.gov/atr/cas... [justice.gov] "On January 27, Jobs launched the iPad. As part of a beautifully orchestrated presentation, he also introduced the iPad’s e-reader capability and the iBookstore. He proudly displayed the names and logos of each Publisher Defendant whose books would populate the iBookstore. To show the ease with which an iTunes customer could buy a book, standing in front of a giant screen displaying his own iPad’s screen, Jobs browsed through his iBooks “bookshelf,” clicked on the “store” button in the upper corner of his e-book shelf display, watched the shelf seamlessly flip to the iBookstore, and purchased one of Hachette’s NYT Bestsellers, Edward M. Kennedy’s memoir, True Compass, for $14.99. With one tap, the e-book was downloaded, and its cover appeared on Jobs’s bookshelf, ready to be opened and read.

            When asked by a reporter later that day why people would pay $14.99 in the iBookstore to purchase an e-book that was selling at Amazon for $9.99, Jobs told a reporter, “Well, that won’t be the case.” When the reporter sought to clarify, “You mean you won’t be 14.99 or they won’t be 9.99?” Jobs paused, and with a knowing nod responded, “The price will be the same,” and explained that “Publishers are actually withholding their books from Amazon because they are not happy.” With that statement, Jobs acknowledged his understanding that the Publisher Defendants would now wrest control of pricing from Amazon and raise e-book prices, and that Apple would not have to face any competition from Amazon on price."

  • by tuppe666 (904118) on Saturday March 29, 2014 @02:04AM (#46608427)

    Amazon, using its monopoly power in ebooks, kept prices artificially low. When Apple entered the market, Amazon lost some of its monopoly power and publishers used this event to increase eBook prices across the board.

    From http://www.justice.gov/atr/cas... [justice.gov] Page 160 "Amazon screwed it up. It paid the wholesale price for some books, but started selling them below cost at $9.99. The publishers hated that — they thought it would trash their ability to sell hardcover books at $28. So before Apple even got on the scene, some booksellers were starting to withhold books from Amazon. So we told the publishers, “We’ll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that’s what you want anyway.” But we also asked for a guarantee that if anybody else is selling the books cheaper than we are, then we can sell them at the lower price too. So they went to Amazon and said, “You’re going to sign an agency contract or we’re not going to give you the books.”"

  • by tuppe666 (904118) on Saturday March 29, 2014 @02:14AM (#46608439)

    Minimum price agreements were widely used in the heyday of CDs. The practice was upheld by courts.

    I noticed this gets modded up as fact...the truth is a little more interesting http://www.stereophile.com/new... [stereophile.com] this is an article from 2000 where the Big Five got in trouble with the Federal Trade Commission for "Minimum Advertised Pricing on CDs" where retailers were forbidden to *advertise* CDs below an established minimum. Unlike Apple they had heard of Sherman Antitrust Act

  • by Anonymous Coward on Saturday March 29, 2014 @08:08AM (#46608973)

    As an author with more than 10 self published works for sale on Amazon, you can be sure that I have not sold my soul to the devil (a.k.a. Publishers).
    Having tried to sell my works via my own site I can tell you that even with the amazon cut I make a lot more money using them than I did before.
    As for the costs to the purchaser? Well two of my books are available at £0.99 anf the highest price is £5.99. Hardly breaking the bank for purchasers. If I printed the book and got it into book stores then the £5.99 (inc tax) would be £11.99 simply for me to get the same return per copy sold.

  • by organgtool (966989) on Saturday March 29, 2014 @11:21AM (#46609715)
    There is so much wrong with that statement, I hardly know where to begin. First of all, monopolies take advantage of the lack of competition to keep prices artificially high, not low. Secondly, even if Amazon was keeping prices artificially low, what they were doing was completely legal. On the other side, Apple was found guilty of conspiring with publishers to make it absolutely impossible for other resellers to sell their books cheaper than Apple. If Apple had just demanded that they got the same or lower price on ebooks as other resellers, then they would have likely escaped litigation. Instead, they conspired with publisher to fix the prices that other resellers could actually sell their products and that is classic price fixing. The publishers knew that and promptly pled guilty, but Apple thought they could get one by the legal system and got a sudden dose of reality. This isn't just another typical case of Slashdot hating on Apple - in this case there is legal justification for it and mountains of legal precedence.

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